Over the past 24 to 48 hours, AUD/USD exhibited notable volatility, closing yesterday at 0.7046, marking a substantial rise from the previous day’s close of 0.70018 and reflecting improved market risk appetite. Last week, the pair posted its highest weekly close in seven weeks at 0.7030, primarily driven by a weakening US dollar amid Federal Reserve policy signals and yen intervention. This movement positioned the Australian dollar favorably in the forex market, particularly influenced by monetary policies from the Fed and the Reserve Bank of Australia (RBA).

Recently, the Australian dollar faced pressure after a sharp selloff in Asian technology stocks dented risk appetite, leading to increased short-term volatility. However, following the RBA’s recent interest rate hike, market sentiment shifted bullish, allowing the pair to hold above the key psychological level of 0.70. Additionally, geopolitical and economic uncertainties worldwide have spotlighted commodity-linked currencies like the AUD.

For the average investor, these price swings underline the market’s sensitivity to changes in Fed policy and regional geopolitical tensions. The capital flows accelerated as a weaker US dollar dovetailed with a relatively stronger Australian dollar, indicating the search for higher yield assets amid global economic uncertainty. While short-term risks remain from tech sector selloffs and fluctuating risk appetite, the RBA’s hawkish stance provides a firm underpinning, suggesting robust support for the AUD in the coming weeks.

Daily Chart

The daily chart shows AUDUSD has broken above the major descending trendline and is maintaining price action above the 200-day EMA (~0.69017), indicating a strong bullish trend. The price recently reclaimed the critical psychological 0.70 level and currently trades near 0.7046. Bollinger Bands suggest increasing volatility, and the MACD histogram and signal lines are both trending upwards, reinforcing the bullish outlook. This phase shows expanded price movements signaling a transition from consolidation to buyer dominance.

1H Chart

On the hourly chart covering the past 3-5 days, AUDUSD experienced a brief pullback before executing a robust recovery. The moving averages (20 & 50 periods) form a bullish alignment providing support, while prices rebound near the middle Bollinger Band. The latest MACD indicates a golden cross and the RSI sits above 60 but below overbought levels, showing sustained bullish momentum. The short term favors continuation with upside potential intact.

Technical Trend:  Clearly biased bullish with intermittent consolidation

Technically, AUDUSD is at a pivotal breakout point: the daily chart’s break of the descending trendline confirms a bullish stance, supported by a 4-hour chart MACD golden cross and healthy RSI readings. The recent formation of a bullish flag and multiple engulfing bullish candlesticks signals continuation potential. Watch for a break above the 0.71-0.7140 resistance zone to ignite further upside momentum. On pullbacks, key support levels at 0.70 and 0.695 provide good areas for tactical entry.

Today’s GMT+1 economic calendar features limited direct impact on AUDUSD, with New Zealand’s Q2 Labour Cost Index and Employment Change scheduled (forecasts at 0.6% q/q and 0.1% q/q respectively), alongside the U.S. ADP National Employment Report expected at 70k. Positive U.S. employment data may bolster the USD and temporarily pressure AUDUSD, whereas weaker figures could sustain the Australian dollar’s rally. Overall, no extreme volatility events are anticipated currently, indicating that market drivers are principally fundamental and technical.

Resistance & Support

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