- Aud/USD stops below 0.6600 as bulls near the shortfold resistance.
- The Australian Dollar uses the RBA tilt and the markets are waiting Claims when the Fed can start lowering the rates.
- Aud/USD remains in a sturdy miniature -term bull trend, because prices fluctuate trade risk against yield differences.
The battle between the Australian dollars (Aud) and the American dollar (USD) persists on Friday, and the bulls in Aud/USD pairs are still pushing breaks through the next main resistance level at 0.6600.
This psychologically significant level has become a key battlefield, maintaining both bulls and bears when the price stops just below it. As the momentum stops, market participants are increasingly paying attention to basic catalysts that could strengthen the stubborn case.
From a fundamental point of view, the Federal Reserve (FED) varies before lowering interest rates in the near future. However, it was focused on whether the Fed would lower the rates when such a move could occur.
Meanwhile, the Australian Reserve Bank (RBA) remains involved in supporting the country’s economic resistance. On Tuesday, RBA surprised markets, maintaining a cash rate of 3.85%, which was seen as more hawk than expected. While the central bank did not rule out the possibility of future foot reductions, the markets reacted positively to the decision.
The confined exhibition of Australia to the tariff threats of US President Donald Trump, due to its compact commercial deficit with the United States, also provided audience with some relative insulation. In valuing political risk, technical factors now offer further insight into current market behavior and why the price remains sturdy near this key resistance zone.
Aud/USD STally below psychological resistance at 0.6600
Aud/USD is currently trading just below the level of psychological resistance 0.6600. Prices consolidate in the growing wedge pattern, which has been created since the end of April. This level still limits the stubborn shoot, and the price effect is respected by the upper limit of the wedge while maintaining higher lowers, which is a sign of constant purchase.
Support is strengthened by 61.8% of the recovery of Fibonacci inheritance of September-April, located near 0.6550. Below the 50-day straight movable (SMA) average, 0.6486 and 200-day SMA at 0.6402 offer additional support for short-term traffic.
Daily Aud/USD chart
On the other hand, the confirmed breakthrough above 0.6600 opened the door to the 78.6% Recovery of Fibonacci at 0.6722, and subsequent profits potentially focused on the October swing near 0.6942. However, the lack of a break above the current levels may result in withdrawal in the direction of 0.6500.
The relative strength rate (RSI) is currently reading nearly 59, which indicates a stubborn shoot without signaling overcrowded conditions. This leaves space for further increases, although the couple may require a basic catalyst or clear breaking over the wedge resistance to obtain adhesion in a miniature period.
Australian dollar questions
One of the most critical factors of the Australian dollar (AUD) is the level of interest rates determined by the Reserve Bank of Australia (RBA). Because Australia is a country opulent in resources, another key driver is the price of its greatest export, iron ore. The health of the Chinese economy, its largest trade partner, is a factor, as well as inflation in Australia, growth rate and commercial balance. Market sentiments-no matter how investors take more risky assets (risk) or are looking for sheltered people (risk)-there is also a factor and a positive risk for AUD.
Bank Reserve Australia (RBA) affects the Australian dollar (AUD), setting the level of interest rates that Australian banks can borrow each other. This affects the level of interest rates in the economy as a whole. The main goal of RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other main central banks support Aud and contrary to relatively low. RBA can also operate quantitative alleviation and tightening to affect credit conditions, with a former negative Aud and the second positive Aud.
China is the largest trading partner in Australia, so the health of the Chinese economy has a enormous impact on the value of the Australian dollar (AUD). When the Chinese economy is doing well, it buys more raw materials, goods and services from Australia, raising the demand for Aud and increasing its value. On the contrary, when the Chinese economy does not grow as speedy as expected. Therefore, positive or negative surprises in Chinese growth data often have a direct impact on the Australian dollar and its steam.
The ore of iron is the largest export in Australia, which is $ 118 billion a year according to the details of 2021, and China as the main destination. Therefore, the price of iron ore can be the driving force of the Australian dollar. Basically, if the price of iron ore increases, the audience also increases, as the aggregate demand for currency increases. Otherwise, the price of iron ore will fall. Higher prices of iron ore also cause a greater probability of a positive trade balance for Australia, which is also positive for AUD.
The commercial balance, which is the difference between what the country earns on exports compared to what it pays for imports is another factor that can affect the value of the Australian dollar. If Australia produces a highly sought after export, its currency will gain value only from the surplus of demand created by foreign buyers who want to buy exports compared to what it spends on buying imports. Therefore, a positive net trade balance strengthens Aud, with reverse effect if the trade balance is negative.
