After a brief dip below 0.6700, AUD/USD saw a strong rebound as the US Dollar faced downward pressure following key job data. Australia’s GDP figures remained steady in Q2, contributing to the positive outlook for the Australian Dollar.
The recent rebound in AUD/USD was supported by a weaker US Dollar and global yields, pushing the pair back above 0.6750. Despite concerns about China’s economic outlook, the Australian Dollar remains strong, backed by the critical 200-day SMA at 0.6615.
Monetary policy shifts, including the Reserve Bank of Australia’s decision to hold rates steady, have further supported the Australian Dollar’s upward trend. The RBA’s hawkish stance on inflation and possible rate hikes have added to the optimism surrounding the AUD.
Looking ahead, with potential rate cuts from the Fed and a prolonged period of restrictive policy from the RBA, AUD/USD is expected to continue its upward trajectory. However, challenges from China’s slow recovery and speculators’ net short positions on the AUD may limit gains.
On the technical front, further increases in AUD/USD could see the pair reaching levels around 0.6823 and 0.6871 in the short term. Bears, on the other hand, may target support levels at 0.6685 and 0.6615.
Overall, the positive outlook for AUD/USD suggests potential gains in the coming months, but investors should remain cautious of external factors that could impact the currency pair’s performance.