Further progress appears on the card


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  • AUD/USD reverses some of its recent weakness.
  • A fresh round of selling pressure hurt the dollar.
  • The 200-day moving average maintains a downward trend for the time being.

Fresh selling pressure in the U.S. dollar (USD) has bolstered a recovery in risk-related areas, encouraging AUD/USD to reclaim Thursday's zone above 0.6600.

Meanwhile, the U.S. dollar stalled its upward momentum amid dismal weekly labor market results, while a decline in U.S. yields also combined with a corrective decline, all amid economic conditions and expectations that the Federal Reserve will launch an easing program before the end of the year. conducted in a consistent context.

Additionally, the Australian dollar has managed to bypass modest gains in copper prices and a significant pullback in iron ore prices, which have continued to retreat from recent highs near $120.00 a ton.

Turning the focus to domestic developments, it is worth noting that the Reserve Bank of Australia (RBA) chose to keep interest rates unchanged at 4.35% during an event earlier on Tuesday. Additionally, the bank reiterated its neutral policy stance, saying “the board will not make any decisions.” The Reserve Bank of Australia has updated its macroeconomic forecasts and expects headline inflation to rise and average inflation to fall by the second quarter of 2025, driven primarily by continued services price inflation. However, the bank expects inflation to return to the 2% to 3% target range in the second half of 2025 and reach the midpoint in 2026.

In a subsequent press conference, Gov. Michelle Bullock maintained a balanced stance. Regarding interest rates, she noted that “we may have to raise rates and we may not,” suggesting the board is considering a rate increase this meeting.

Currently, the swaps market has largely discounted the likelihood of further rate hikes over the next six months and has already priced in rate cuts over the next six months.

In addition, the Reserve Bank of Australia and the Federal Reserve are expected to initiate easing measures later than many G10 peers.

AUD/USD's continued gains are expected to be limited given the Fed's commitment to tightening monetary policy and the potential for easing from the Reserve Bank of Australia later this year.

AUD/USD daily chart

AUD/USD Short-Term Technical Outlook

Additional gains could see AUD/USD return to the May high of 0.6647 (May 3), just below the March high of 0.6667 (March 8) and ahead of the December 2023 high of 0.6871.

Meanwhile, if bears regain the initiative, the pair could test the key 200-day moving average at 0.6519 before falling to the May low at 0.6465 and the 2024 bottom at 0.6362 (April 19).

Looking at the bigger picture, as long as spot trades above the 200-day moving average, more upside is on the horizon.

On the four-hour chart, buying momentum appears to have regained traction. That said, initial resistance lies at 0.6647 ahead of 0.6667. On the downside, immediate support is at 0.6557, followed by the 200 moving average at 0.6524 and the 100 moving average at 0.6519. Additionally, the RSI rebounded to around 58.

  • AUD/USD reverses some of its recent weakness.
  • A fresh round of selling pressure hurt the dollar.
  • The 200-day moving average maintains a downward trend for the time being.

Fresh selling pressure in the U.S. dollar (USD) has bolstered a recovery in risk-related areas, encouraging AUD/USD to reclaim Thursday's zone above 0.6600.

Meanwhile, the U.S. dollar stalled its upward momentum amid dismal weekly labor market results, while a decline in U.S. yields also combined with a corrective decline, all amid economic conditions and expectations that the Federal Reserve will launch an easing program before the end of the year. conducted in a consistent context.

Additionally, the Australian dollar has managed to bypass modest gains in copper prices and a significant pullback in iron ore prices, which have continued to retreat from recent highs near $120.00 a tonne.

Turning the focus to domestic developments, it is worth noting that the Reserve Bank of Australia (RBA) chose to keep interest rates unchanged at 4.35% during an event earlier on Tuesday. Additionally, the bank reiterated its neutral policy stance, saying “no decision will be taken by the board of directors.” The Reserve Bank of Australia has updated its macroeconomic forecasts and expects headline inflation to rise and average inflation to fall by the second quarter of 2025, driven primarily by continued services price inflation. However, the bank expects inflation to return to the 2% to 3% target range in the second half of 2025 and reach the midpoint in 2026.

In a subsequent press conference, Gov. Michelle Bullock maintained a balanced stance. Regarding interest rates, she noted that “we may have to raise rates and we may not,” suggesting the board is considering a rate increase this meeting.

Currently, the swaps market has largely discounted the likelihood of further rate hikes over the next six months and has already priced in rate cuts over the next six months.

In addition, the Reserve Bank of Australia and the Federal Reserve are expected to initiate easing measures later than many G10 peers.

AUD/USD's continued gains are expected to be limited given the Fed's commitment to tightening monetary policy and the potential for easing from the Reserve Bank of Australia later this year.

AUD/USD daily chart

AUD/USD Short-Term Technical Outlook

Additional gains could see AUD/USD return to the May high of 0.6647 (May 3), just below the March high of 0.6667 (March 8) and ahead of the December 2023 high of 0.6871.

Meanwhile, if bears regain the initiative, the pair could test the key 200-day moving average at 0.6519 before falling to the May low at 0.6465 and the 2024 bottom at 0.6362 (April 19).

Looking at the bigger picture, as long as spot trades above the 200-day moving average, more upside is on the horizon.

On the four-hour chart, buying momentum appears to have regained traction. That said, initial resistance lies at 0.6647 ahead of 0.6667. On the downside, immediate support is at 0.6557, followed by the 200 moving average at 0.6524 and the 100 moving average at 0.6519. Additionally, the RSI rebounded to around 58.



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