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Can AUD/USD Regain Momentum? 

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AUD/USD Pair Struggles Below 0.6700 Amid US Dollar Strength – Key Technical Levels to Watch

The AUD/USD currency pair faces downward pressure after a strong rally that briefly lifted prices near the 0.6700 mark, a two-week high. The pair’s retreat on Friday aligns with resistance from the 100-day Simple Moving Average (SMA) and is intensified by a strengthening US Dollar (USD). By mid-European session, AUD/USD has dropped to the 0.6625-0.6620 range, marking a fresh daily low.

US Dollar Gains as Market Optimism Surrounds Trump’s Economic Policies

The USD’s recent strength is supported by market expectations that Trump’s policies could drive economic growth, fuel inflation, and reduce the Federal Reserve’s scope for aggressive interest rate cuts. This optimism has helped stabilize the USD, curbing its decline from a recent four-month peak and pressuring the AUD/USD pair.

China’s Debt Ceiling Adjustment and RBA’s Hawkish Stance Provide Little Boost for AUD

Despite China’s Standing Committee of the National People’s Congress (NPC) approving an increased local debt ceiling, AUD/USD bulls remain unaffected. Additionally, the Reserve Bank of Australia’s (RBA) recent hawkish stance has offered limited support, leaving the Australian Dollar vulnerable.

Technical Analysis: Key Support and Resistance Levels for AUD/USD

From a technical perspective, failure to maintain above the crucial 200-day SMA may indicate that the recent rally is losing momentum. The daily chart oscillators are still in negative territory, suggesting further declines. Should the AUD/USD pair continue lower, it could test the 0.6600 level, with further support found at 0.6555-0.6550 and 0.6515-0.6510, potentially reaching a multi-month low near the 0.6465-0.6460 area.

Conversely, for the AUD/USD to gain a bullish outlook, a sustained breakout above the 100-day SMA – currently just below 0.6700 – is needed. This level is closely followed by the 50-day SMA around the 0.6715-0.6820 region. A successful climb above these hurdles could see the pair reaching the 0.6750-0.6755 range, with further upside potential to the 0.6800 level, signaling a reversal in near-term sentiment.

In Summary: The AUD/USD pair currently faces downward momentum driven by USD strength and key technical resistance levels. Traders are advised to monitor these critical price zones closely as they may determine the next directional move for the pair.

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