As the world’s best investment manager and financial market journalist, I bring you the latest updates on the AUD/USD pair. In Monday’s session, the AUD/USD declined by 0.30% to 0.6775, despite hovering around a seven-month high near 0.6800. This decline was primarily driven by a broad USD recovery and cautious market sentiment.
While the Reserve Bank of Australia (RBA) has taken a hawkish stance against rising inflation, which has supported the Australian Dollar, the recent decline in AUD/USD can be attributed to lower commodities weighing on the currency.
Daily Digest Market Movers: Australian Dollar Declines Due to USD Strength, Lower Commodities Weigh
- The recent decline in AUD/USD can be attributed to weak copper prices, despite a recovery in iron ore prices.
- AUD’s recent strength was driven by a weaker US Dollar and improved risk appetite in the market.
- Monetary policy divergence between the RBA and the Federal Reserve (Fed) has also influenced the pair.
- China’s PBOC kept its 1-year MLF rate steady at 2.30%, but further stimulus is anticipated as the economy struggles.
- July industrial profits in China may shed light on the weaknesses in the mainland economy, impacting the AUD.
- Any signs of weakness in the Chinese economy might weigh on the Aussie.
AUD/USD Technical Outlook: Bullish Momentum Eases, Support at 0.6750
The technical outlook for AUD/USD remains neutral as buyers take a breather. The Relative Strength Index (RSI) is at 62 with a downward tendency, and the Moving Average Convergence Divergence (MACD) suggests a decrease in bullish momentum. Support levels are at 0.6750, 0.6700, and 0.6650, while resistance levels are at 0.6800, 0.6850, and 0.6900.
Australian Dollar FAQs
For those looking to understand the factors influencing the Australian Dollar (AUD), key drivers include interest rates set by the RBA, commodity prices like Iron Ore, the health of the Chinese economy, inflation in Australia, trade balance, and market sentiment. These factors play a crucial role in determining the value of the AUD.