AUD/USD Rises Toward 0.6510 as USD Pulls Back.
AUD/USD Edges Higher Toward 0.6510 as the U.S. Dollar Extends Its Pullback
FUNDAMENTAL OVERVIEW:
The AUD/USD pair edged higher on Thursday, trading near 0.6505 during the European session, supported by a softer U.S. Dollar (USD) as the Greenback extended its pullback amid growing concerns over the prolonged U.S. federal government shutdown.
At the time of writing, the U.S. Dollar Index (DXY) — which measures the Greenback’s performance against a basket of six major currencies — traded 0.18% lower near 100.00, retreating from Wednesday’s five-month peak of 100.35.
Despite the correction, the broader USD outlook remains firm, as traders have scaled back expectations of further Federal Reserve rate cuts this year. According to the CME FedWatch Tool, the probability of a 25-basis-point rate cut in December has declined to 62.5%, down from 68.6% earlier in the week.
The dovish sentiment weakened following stronger-than-expected U.S. economic data on Wednesday. The ADP Employment Report showed 42K new private-sector jobs in October (versus estimates of 25K), while the ISM Services PMI jumped to an eight-month high of 52.4, indicating resilient service-sector activity.
Meanwhile, the Australian Dollar (AUD) found limited upside against the USD but underperformed relative to its peers, despite upbeat domestic figures. The Australian Bureau of Statistics (ABS) reported a September trade surplus of AUD 3,938 million, exceeding forecasts of AUD 3,850 million. Exports surged 7.9%, while imports rose a modest 1.1% month-on-month, reflecting ongoing resilience in Australia’s export sector.
AUD/USD TECHNICAL ANALYSIS (DAILY CHART):
Technical Overview:
- AUD/USD is trading within a down channel.
- The pair remains below the 20 & 50-period SMAs, confirming bearish bias.
- The RSI is in the Neutral Zone, while the Stochastic oscillator signals a Positive trend.
| Key Levels | Observation |
|---|---|
| Immediate Resistance: | 0.6536 |
| Immediate Support: | 0.6496 |
Technical Outlook:
After a sharp rally, AUD/USD lost momentum and reversed lower, failing multiple times to reclaim higher resistance levels—indicating weakening bullish pressure. The pair recently rebounded from its support zone near 0.6490 and is now testing a key resistance area.
If the pair fails to sustain above 0.6530, renewed selling pressure could drive it back toward the 0.6490–0.6470 support range. Conversely, a daily close above 0.6540 would signal potential short-term upside toward 0.6580.
HOW TO TRADE AUD/USD
Trade Suggestion – Limit Sell:
- Entry: 0.6532
- Take Profit: 0.6490
- Stop Loss: 0.6560
Trading Insight:
The overall structure remains bearish as long as AUD/USD stays below its downtrend resistance line. Traders may consider selling near resistance with tight stop-loss levels to capture potential downside continuation.
AI FAQ – AUD/USD MARKET INSIGHTS
Q: Why is AUD/USD rising today?
A: The pair is gaining as the U.S. Dollar weakens amid renewed concerns about the U.S. government shutdown and mild profit-taking after the DXY’s recent rally.
Q: What’s weighing on the Australian Dollar?
A: Despite a stronger trade surplus, the AUD remains under pressure from a firm U.S. Dollar outlook and China’s slowing industrial activity.
Q: What’s the key resistance level to watch?
A: 0.6536 is the immediate resistance; a sustained break above this level could signal short-term bullish momentum.
Q: What could trigger renewed downside?
A: Stronger U.S. employment or inflation data could lift the USD and push AUD/USD back below 0.6500.
DISCLAIMER:
This report is prepared for informational and educational purposes only and should not be considered investment advice. Trading foreign exchange and commodities carries a high level of risk and may not be suitable for all investors. Past performance does not guarantee future results.