AUD/USD Rebounds Near 0.6700 Amid US Dollar Rally
- AUD/USD managed to rebound modestly and flirt with 0.6700.
- The US Dollar maintained its rally well in place for yet another day.
- The key 200-day SMA awaits in case the downward bias resumes.
After a shaky start to the trading week, AUD/USD saw a resurgence on Tuesday, pushing towards the 0.6700 mark after a dip to the mid-0.6600s. The Australian Dollar’s strength defied the ongoing US Dollar rally, fueled by concerns over China’s economic stimulus measures.
Factors Driving AUD/USD Movement:
- The US Dollar’s continued strength
- Australian Dollar’s resilience
- Recovery in copper and iron ore prices
- Impact of China’s economic stimulus efforts
The Reserve Bank of Australia (RBA) maintained its cash rate at 4.35% in September, with Governor Michele Bullock hinting at a stable rate outlook. However, market sentiment leans towards a possible rate cut by the year-end, although Deputy Governor Hauser suggested that Australian rates may not decline as sharply as other central banks due to inflation concerns.
Future Outlook and Key Factors to Watch:
- Potential rate cuts by the Federal Reserve
- Impact of China’s economic outlook
- Speculators’ positioning on the Aussie Dollar
- Release of advanced Judo Bank Manufacturing and Services PMIs in Australia
Technically, AUD/USD faces support around 0.6650 and 0.6622, with resistance at 0.6706, 0.6723, and 0.6765. The 200-day SMA remains a key level to watch for a potential trend reversal.
Analysis of AUD/USD Movement:
The AUD/USD pair’s recent rebound despite the US Dollar’s strength indicates resilience in the Australian Dollar. The RBA’s cautious approach towards rate cuts and the impact of China’s economic stimulus measures are key factors shaping the currency pair’s movement. Speculators’ positioning and upcoming economic data releases will provide further insights into AUD/USD’s future trajectory.