The AUD/USD pair has attracted fresh buying near the 0.6660 area on Thursday, gaining momentum during the early part of the European session. Buyers remained active, leading to a steady intraday ascent to a one-week high of around the 0.6820 region in the last hour. However, meaningful upside still seems elusive despite the positive momentum.
This forex pair’s movement reflects the dynamic market conditions and signals to traders and investors that the currency pair is moving in a favorable direction. The forex market is vast and unpredictable, with various factors influencing currency pair fluctuations. In the case of the AUD/USD pair, market participants need to remain informed and up-to-date with economic indicators, central bank policies, and geopolitical developments that can affect the pair’s value.
Market Sentiment Supports AUD/USD Pair
The AUD/USD pair’s recent bullishness is attributed to several factors, including rising market sentiment, declining US Treasury yields, and a weakening US dollar. The positive market sentiment is fueled by expectations of global economic recovery from the COVID-19 pandemic, which has led to a shift in investors’ risk appetite towards higher-yielding assets like the Australian dollar.
In addition, the US Federal Reserve’s recent commitment to maintaining an accommodative monetary policy has dampened the US dollar’s demand, leading to its depreciation against other major currencies. This has also contributed to the AUD/USD pair’s bullish momentum.
Technical Analysis of AUD/USD Pair
From a technical perspective, the AUD/USD pair’s bullish momentum is supported by a rising trend line, as seen in the daily chart. The pair has also managed to break above the 50-day and 200-day moving averages, indicating a shift towards bullish sentiment.
However, there are still some barriers to significant upside movement. The pair’s resistance level is at 0.6850, and it needs to break above this level to continue its upward momentum. Additionally, the pair’s relative strength index (RSI) has reached overbought levels, which may indicate that the pair is due for a corrective pullback before continuing its upward trend.
In conclusion, the AUD/USD pair has gained momentum in the European session, with buyers remaining active near the 0.6660 area, leading to a one-week high around the 0.6820 region. However, the pair still faces resistance at the 0.6850 level and may experience a corrective pullback soon.