The AUD/USD pair has shown resilience, rebounding from recent lows as it continues its upward trajectory. The pair is currently hovering near critical resistance levels, with market participants closely watching economic developments, including guidance from the Reserve Bank of Australia (RBA) and the upcoming speech from Federal Reserve Chair Jerome Powell. This analysis provides a comprehensive overview of the current technical setup, economic influences, and trading recommendations.
Key Takeaways:
- Resilient Uptrend: AUD/USD has rebounded from 0.6820, maintaining a strong uptrend.
- Critical Resistance: The pair faces significant resistance near 0.6900, with potential to advance to 0.6955 if breached.
- Economic Outlook: The RBA’s steady interest rate policy and upcoming Fed guidance are key drivers for the pair.
Technical Analysis:
H1 Chart Analysis
- Trend Structure: The AUD/USD is showing a strong bullish structure with multiple Break of Structure (BOS) and Change of Character (CHoCH) signals. The price has rebounded from a key demand zone around 0.6820, aligning with the lower boundary of a premium zone.
- Support and Resistance: Immediate support is established at 0.6820, with resistance looming at 0.6900. A successful breach of 0.6900 could lead to an upward extension toward 0.6955.
- Indicators: The Relative Strength Index (RSI) is hovering near overbought levels, indicating potential for a minor pullback before any sustained rally.
H4 Chart Analysis
- Trend Structure: The H4 chart confirms a bullish trend, with the AUD/USD establishing higher highs and higher lows. The pair has recently bounced off the equilibrium zone, indicating strong buying interest.
- Support and Resistance: Key support is located at 0.6770, with resistance at 0.6900. If the pair breaks above this level, the next target is the 0.6955 resistance.
- Indicators: The 14-day RSI on the H4 chart supports continued bullish momentum, but traders should be cautious of potential resistance near 0.6900.
Economic Data:
The Australian Dollar has been supported by the RBA’s decision to maintain interest rates at 4.35% for the foreseeable future, reflecting a stable monetary policy environment. Meanwhile, the US Dollar remains under pressure ahead of Fed Chair Powell’s speech, where market participants expect further clarity on interest rate cuts. Additionally, the upcoming release of the US Personal Consumption Expenditure (PCE) data could provide further direction, with expectations of an acceleration in core inflation to 2.7%.
Trading Recommendation:
- Bullish Scenario: A sustained break above 0.6900 could signal a continuation of the uptrend, with a target of 0.6955. Traders may consider entering long positions above 0.6905, with a stop loss below 0.6850.
- Bearish Scenario: Failure to break 0.6900 could result in a corrective pullback towards 0.6770. Short positions may be considered below 0.6820, targeting the 0.6770 support level.
Conclusion:
The AUD/USD pair continues to exhibit bullish momentum, driven by supportive economic conditions and technical factors. However, the resistance at 0.6900 remains a key level to watch, with a breakout potentially leading to further gains. Traders should stay informed of upcoming economic data and Fed announcements, which could significantly impact the pair’s direction.
