AUD/USD analysis: upside potential limited despite solid advance in equities, commodities

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7327

Political relief helped the Aussie bounce back on Friday.
Strong rally in equities and commodities underpinned the currency, upside potential seen limited.

The AUD/USD pair traded within a wide range this past week but closed it barely up at around 0.7330. The Aussie plunged to 0.7237 as PM Turnbull suffered a leadership contest, which ended with him stepping down and Scott Morrison, the former treasurer, becoming the new PM by an adjusted 45 to 40 votes, beating Peter Dutton, the man who launched the strike against Turnbull. The pair recovered on relief after the situation settled and the ruling Liberal-led coalition managed to get a new leader, with the Aussie further supported by a sharp recovery in base metals and rallying US equities. The Australian macroeconomic calendar has nothing relevant to offer these upcoming days, but China will release August official PMI, which usually affect the commodity-linked currency. From a technical point of view, the upward potential for the pair remains limited, as in the daily chart, it stalled its latest recovery around a bearish 20 DMA, also below the 50.0% retracement of its August decline, while technical indicators recovered from near oversold readings, but remain well into negative territory. In the 4 hours chart, the pair finished around its 20 and 100 SMA, both maintaining downward slopes, while technical indicators turned horizontal within neutral levels, suggesting that buying interest remains limited.

Support levels: 0.7300 0.7270 0.7230

Resistance levels: 0.7355 0.7390 0.7420

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

AUD/USD struggles to recover as hawkish Fed bets escalate

The Australian Dollar is under pressure against the US Dollar as traders have raised bets supporting interest rate hikes by the Federal Reserve this year, with the AUD/USD pair posting a fresh almost eight-week low at around 0.7025. Hawkish Fed bets have accelerated following the release of the surprisingly strong United States Nonfarm Payroll (NFP) data for May.

USD/JPY holds higher ground toward 160.50 despite 'Yentervention' fears

USD/JPY holds higher ground toward 160.50 in Monday's Asian trading, despite intervention fears. Japan’s revised GDP print, which confirmed that the economy lost momentum in the first quarter, weighs on the Japanese Yen. Meanwhile, Friday's upbeat US NFP report and fresh Israel-Iran attacks favor the US Dollar bulls, underpinning the currency pair.

Gold faces initial resistance near $4,350

Gold manages to reclaim the $4,300 mark per troy ounce and above on Monday. The yellow metal’s small uptick comes on the back of modest losses in the US Dollar, while traders continue to follow geopolitical events in the Middle East and the likelihood of a tighter-for-longer Fed.

Solana: ETF outflows and bearish sentiment reinforce downside risks

Solana (SOL) remains under pressure, trading below $66 on Monday after losing nearly 20% in the previous week. Institutional demand weakened with spot Exchange Traded Funds recording a net outflow of over $6.5 million last week, snapping a four-week streak of inflows.

$1.75 trillion: Is SpaceX the most popular IPO in history, or the most engineered?

On June 12, the largest initial public offering (IPO) in history is set to hit the tape, and almost nobody is asking whether the price is right, because almost everybody already wants in.

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.