The AUD/USD currency pair has been the most impressive. It have moved its expanding winning streak Tuesday with straight fifth saying to manufacture as much. The market has managed this month retake a high 0.6380. Market analysts are witnessing a significant bullish momentum, despite the prevailing economic uncertainties. A new and even more sweeping announcement on tariffs in the escalating trade war between China and the United States threatens to roil the Australian economy. Nevertheless, speculators remain bullish on the currency pair’s ability to surpass its March 18 peak of 0.6390.
The most recent trading sessions have provided substantial volatility opportunities for the AUD/USD pair. Positive technical indicators and better-than-expected underlying market sentiment have propped up its performance. As the pair approaches this important resistance level, analysts are focused on monitoring key economic indicators. Each of these considerations has the potential to shape its overall trajectory in the coming days.
Technical Indicators Signal Strength
This pair has outperformed, continuing to trade above the 20- and 50-day Exponential Moving Averages (EMAs). Currently at 0.6244 and 0.6270, respectively, these EMAs are offering both pairs very strong support. That technical setup definitely bodes well for a bullish outlook. The pair is trading much higher than the 50, 100 and 200-day moving averages, confirming the strong uptrend.
The 14-day Relative Strength Index (RSI) has shot up over 58.00. This increase follows a strong rebound from below 40.00, confirming the bullish outlook. This V-shape recovery suggests an extremely powerful bullish reversal. Momentum should continue to build as traders anticipate and speculate on additional gains. According to market analyst, a breakout above March 18 high of 0.6390 for the AUD/USD pair will bring further bullish momentum. Such a movement could send the currency pair back towards the December 5 high of 0.6456 and the psychological resistance level at 0.6500.
Caution remains paramount. If the pair retests the March 4 bottom at 0.6187 and breaks below it, the pair might be in for tougher times ahead. A move down here would bring the currency pair right into key support at the February low of 0.6087 and the key psychological level of 0.6000.
Economic Influences on the AUD/USD Pair
There are a few key economic factors that drive the AUD/USD pair. Against this backdrop, China’s role as Australia’s largest trading partner is increasingly important. The role of the Chinese economy in determining Australian exports cannot be overstated. Metals and energy commodities such as iron ore, crude oil, and copper heavily impact the AUD/USD currency pair. This is because a positive net Trade Balance generally strengthens the Australian dollar, and conversely a negative Trade Balance puts downward pressure on it.
Present-day trade relations between the United States and China are at an all-time low, adding to the uncertainty surrounding global markets. As tensions rise, Australia dollar investors continue to watch closely, trying to assess how these geopolitical developments will impact demand for AUD.
Additionally, interest rates determined by the Reserve Bank of Australia (RBA) represent another important driver of the AUD/USD currency pair. The RBA’s monetary policy decisions determine the effective lending rates for Australian banks. This move has a direct impact on investor confidence in the currency. Market participants will be with bated breath looking for guidance from the RBA. Inverting the sign of these updates would shift expectations for interest rates higher, as economic conditions continue to change.
Market Sentiment and Future Outlook
Recently, a multifaceted combination of technicals and fundamentals have come into play to weigh heavily on the AUD/USD pair. Traders are understandably excited and emboldened by the recent bullish momentum. They remain highly attuned to risks posed by outside developments such as the trade war and upcoming releases of key economic data.
As market participants look ahead, analysts emphasize the importance of monitoring key economic indicators that could impact both Australia and its trading relationships. The continued US-China trade war poses the greatest risk to the outlook. It would be disastrous for Australian exports and subsequent Australian economic performance.