- AUD/USD added to Wednesday’s uptick north of 0.6500.
- The late loss of momentum in the Dollar helped the pair’s upside.
- Markets’ attention now shifts to the US NFP.
Thursday saw another negative session of the US Dollar (USD), prompting AUD/USD to build on Wednesday’s gains and extend the trespass of the 0.6500 barrier along with the key 200-day SMA (0.6520).
Concurrently, the Greenback faced modest downward pressure as traders continued to assess the latest FOMC meeting, where the central bank maintained its interest rates unchanged, as broadly estimated.
In addition, the Australian dollar managed to set aside another bearish session around copper prices as well as marginal losses in iron ore prices.
In terms of monetary policy, investors are eyeing a potential rate cut by the Reserve Bank of Australia (RBA) later in the year, particularly after recent inflation figures exceeded forecasts. Market sentiment now indicates a 90% probability of a 25 bps rate cut in 2024, compared to the roughly 50 bps of easing earlier this month.
Moreover, both the RBA and the Federal Reserve are anticipated to initiate their easing cycles later than many of their other G10 counterparts.
Given the Fed's commitment to tightening monetary policies and the likelihood of the RBA starting an easing cycle later this year, sustained gains in AUD/USD are currently perceived as limited.
Additionally, recent economic data from China has not provided clear indications of a robust recovery, which is essential for bolstering a significant rebound in the Australian dollar.
AUD/USD daily chart
AUD/USD short-term technical outlook
Extra gains may cause the AUD/USD to revisit the weekly top of 0.6586 (April 29), which appears reinforced by the 100-day SMA (0.6581). North from here aligns the April peak of 0.6644, ahead of the March high of 0.6667 (March 8) and the December 2023 top of 0.6871.
Meanwhile, if sellers regain control, spot may retest its 2024 low of 0.6362 (April 19), which precedes the 2023 bottom of 0.6270 (October 26) and the round milestone of 0.6200.
Looking at the larger picture, a sustained break above the crucial 200-day SMA would almost surely result in further gains.
On the 4-hour chart, spot appears to have recovered some bullish momentum. Initial up-barrier emerges at 0.6548, ahead of 0.6586 and 0.6644. On the downside, 0.6465 occurs before 0.6362. In addition, the RSI rose over 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 retreats below 1.0850 ahead of Fedspeak
EUR/USD stays under modest bearish pressure and trades in negative territory slightly below 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD stays under modest bearish pressure near 1.2650
GBP/USD edges lower toward 1.2650 after posting marginal losses on Thursday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to gain traction. Fed policymakers are scheduled to speak later in the day.
Gold holds steady above $2,380, Fed speakers in focus
Gold trades with a positive bias on Friday and holds above $2,380. The benchmark 10-year US Treasury bond yield stays flat near 4.4% following Thursday's rebound, allowing XAU/USD to keep its footing ahead of speeches from Fed officials.
XRP steadies at $0.51 as Ripple plans to expand XRP Ledger, custody services in Africa
Ripple hovers close to $0.51 on Friday, above the psychologically important $0.50 level, as traders await the court ruling of the lawsuit against the US SEC and amid new commitments from the firm to expand its services in Africa.
Disputes and De-risking: US-China trade dispute changes trade flows
The bilateral trade dispute between the US and China is entering a new round and is leading to renewed discussions about the deglobalisation of global trade in goods.