AUD/USD Price Analysis – Sep 24, 2024
Daily Price Outlook
During the European trading session on Tuesday, the AUD/USD currency pair maintained its upward momentum, remaining well bid around the 0.6850 level and reaching an intra-day high of 0.6870.
The pair's upward movement was supported by upbeat market sentiment, which generally benefits risk-sensitive currencies like the Australian dollar.
Furthermore, a bearish US dollar, pressured by expectations of more aggressive policy easing by the Federal Reserve, provided further support for the AUD/USD pair.
Furthermore, China's announcement of a broad range of stimulus measures to boost its faltering economy also bolstered the Australian dollar.
RBA’s Steady Policy and China’s Stimulus Measures Boost AUD/USD Outlook
On the AUD front, the Australian central bank kept interest rates unchanged for the seventh consecutive meeting, as expected. The Reserve Bank of Australia (RBA) emphasized that monetary policy will remain restrictive until inflation shows clear signs of moving toward the target range.
RBA Governor Michele Bullock noted that recent data has not significantly changed the bank's policy outlook, reinforcing the central bank’s cautious stance.
Meanwhile, China's efforts to boost its slowing economy added support to the AUD/USD pair. On Tuesday, China announced a broad range of stimulus measures, including the People's Bank of China (PBOC) cutting the Reserve Requirement Ratio (RRR) by 50 basis points, which will release about 1 trillion yuan for new lending.
This move, combined with renewed US dollar weakness, has been a positive factor for the Australian dollar, as stronger economic ties with China benefit Australia's economy.
These factors are expected to act as a tailwind for the AUD/USD pair, supporting its upward momentum.
Weak US Dollar and Global Equity Strength Boost AUD/USD Prospects
On the US front, the US dollar has been losing momentum due to expectations that the Federal Reserve may adopt more aggressive policy easing. This outlook has weighed on the dollar's recovery from its year-to-date low.
Additionally, the strong performance of global equity markets has further reduced demand for the US dollar as a safe-haven asset.
These factors are helping to limit any potential losses for the AUD/USD pair and are likely to support further short-term gains.
As the US dollar remains weak, it provides a favorable environment for the Australian dollar to strengthen against it.
AUD/USD - Technical Analysis
The Australian dollar (AUD/USD) is currently trading at $0.68304, up 0.25%, as the pair shows a modest recovery during the Asian session. The price remains above its 50-day Exponential Moving Average (EMA) of $0.6811, indicating short-term bullish momentum.
Immediate resistance is seen at $0.6870, just above the pivot point of $0.6869. A break above this level could lead the pair toward the next resistance at $0.6902, and potentially extend to $0.6928 if momentum holds.
On the downside, immediate support is located at $0.6784, with further key levels at $0.6757 and $0.6725.
Technically, the RSI (Relative Strength Index) is positioned at 51, suggesting a neutral stance, with neither overbought nor oversold conditions.
This gives the market room to maneuver in either direction, depending on upcoming catalysts, such as U.S. and Australian economic data releases.
The pair’s trajectory remains cautiously bullish as long as it stays above the 50 EMA. However, the pivot point at $0.6869 will be crucial for further upside. If prices can break above immediate resistance, AUD/USD could see an extension toward the $0.6902 and $0.6928 resistance levels.
Conversely, a dip below $0.68084 could shift sentiment toward the downside, with targets near the $0.67798 stop-loss level.
Overall, AUD/USD looks poised for a potential rally above $0.68084, targeting $0.68693, while maintaining a stop-loss at $0.67798 to manage downside risk.
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