- AUD/USD revisited the 0.6600 region on Monday.
- Further upward bias looks likely for the time being.
- Australia’s Consumer Confidence is due on Tuesday.
The slight downward pressure on the US Dollar (USD) seems to have been enough to spark a marked rebound in the Aussie dollar, lifting AUD/USD back to the 0.6600 barrier at the beginning of a new trading week.
At the same time, the ongoing surge in copper prices, reaching levels not seen since April 2022 around $815.00, and a minor uptick in iron ore prices, which breached the critical $100.00 mark per tonne, bolstered the upward momentum of the Australian dollar.
Moreover, analysts anticipate that recent encouraging results from Chinese PMIs and the anticipation of potential stimulus measures from the government and the PBoC will keep the positive bias unchanged around the AUD. Consistent improvements in economic indicators are crucial for strengthening the Australian currency and potentially starting a sustained uptrend in AUD/USD.
Regarding the Reserve Bank of Australia (RBA), the release of its March meeting Minutes last week confirmed the central bank's stance on refraining from tightening monetary policy. Unlike the February session, there was no discussion about increasing the cash rate target in March. So far, RBA cash rate futures still suggest an expectation of nearly 50 basis points of policy rate cuts in 2024.
It is worth noting that the RBA is among the last G10 central banks expected to consider interest rate adjustments this year.
Due to the divergence in monetary policy timelines between the RBA and the Fed, the Australian dollar could gain momentum later in the year, potentially leading to further appreciation in AUD/USD. If the pair surpasses the December 2023 peak of 0.6871, it may target the significant level of 0.7000 in the near future.
AUD/USD daily chart
AUD/USD short-term technical outlook
AUD/USD is expected to challenge its March high of 0.6667 (March 8) before reaching its December 2023 top of 0.6871 (December 28). Further north, monthly peaks of 0.6894 (July 14) and 0.6899 (June 16) occur prior to the key 0.7000 mark.
If sellers regain control, the pair may fall to its April bottom of 0.6480 (April 1), then the March low of 0.6477 (March 5), and finally the 2024 low of 0.6442 (February 13). Breaking below this level may force a test of 2023's lowest level, 0.6270 (October 26), before the round level of 0.6200.
Looking at the big picture, the pair is expected to continue its bullish trend if it convincingly surpasses the key 200-day SMA at 0.6543.
On the 4-hour chart, the pair's constructive bias appears to be intact for the time being. The initial resistance is at 0.6619 ahead of 0.6634. On the other hand, new losses may cause the pair to retest 0.6480, then 06477, and eventually 0.6442. Furthermore, the MACD remained in the positive zone, and the RSI rose above 60.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.