AUD/USD Holds Above 0.6500 as Market Sentiment Counters USD Weakness
The AUD/USD pair remains steady around the key psychological level of 0.6500 after retreating from a six-month high of 0.6537. The weakness in the US Dollar Index (DXY), driven by concerns over the US fiscal deficit and policy uncertainty, supports the Australian Dollar despite a dovish sentiment surrounding the Reserve Bank of Australia (RBA)'s interest rate outlook.
DXY Decline Supports AUD/USD Upside: Technical and Fundamental Analysis
The DXY is currently trading around 98.80, marking its third consecutive session of losses as markets assess the risk posed by former President Trump’s tax proposal, which could significantly widen the US budget deficit. This has provided upward pressure for AUD/USD, keeping the pair supported above the 9-day Exponential Moving Average (EMA) at 0.6456.
Although the RBA is expected to continue cutting rates due to a weakening economic outlook, dovish signals from Governor Michele Bullock and easing trade tensions between the US, China, and the EU are helping AUD/USD maintain its resilience.
Technical indicators support a bullish bias with the RSI holding above 50 and the pair staying above key moving averages. A breakout above 0.6537 could open the path toward the seven-month high at 0.6687. On the downside, key supports lie at 0.6456 and 0.6380; a break below these levels may shift the momentum bearish.
What to Watch Next for AUD/USD Amid Rising Market Volatility
As the US Dollar remains under pressure due to fiscal policy uncertainty and upcoming economic data, traders should closely monitor the AUD/USD pair at key technical levels. With risk-on sentiment gaining momentum, this currency pair may continue to experience notable short-term volatility.
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As the US Dollar remains under pressure due to fiscal policy uncertainty and upcoming economic data, traders should closely monitor the AUD/USD pair at key technical levels. With risk-on sentiment gaining momentum, this currency pair may continue to experience notable short-term volatility.
This is a Market Report by H2TFinance.com — an independent platform sharing trading knowledge, tools, strategies, and broker comparisons.
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