AUD/USD Analysis: Slight Dip Amid Commodity Pressure, But Bullish Outlook Remains -

AUD/USD Analysis: Slight Dip Amid Commodity Pressure, But Bullish Outlook Remains

Jul 09, 2024Jeremy ParkinsonFinance0

On Monday, July 8th, the Australian dollar (AUD) closed at $0.6737 against the US dollar (USD), down 0.18% for the day. This slight adjustment comes after the AUD/USD pair reached a six-month high of 0.6761 in Asian trading on Friday.

Key Factors Affecting the AUD/USD Pair

Profit-Taking: The minor pullback on Monday can be attributed to profit-taking following Friday’s high.

Commodity Pressure: A dip in commodity prices on Monday weighed on the Australian dollar.

Diverging Central Bank Expectations: Despite the slight decline, the AUD’s downside appears limited due to differing rate expectations between the Reserve Bank of Australia (RBA) and the Federal Reserve.

Market expectations for an RBA rate hike in August: 27% probability
Probability of a Fed rate cut in September: 80%

Upcoming Events to Watch

Fed Chair Powell’s Congressional Testimony: Tuesday/Wednesday

US CPI Data: Thursday

These events could potentially stimulate further AUD gains if they indicate a likely Fed rate cut in September.
Technical AnalysisFrom a daily chart perspective:

Bullish outlook if AUD/USD closes above 0.6750 (76.4% Fibonacci retracement of the April-December downtrend from 0.6870 to 0.6361)

Next target: 0.6870

Key levels to watch:

Resistance: 0.6770, 0.6800, 0.6840

Support: 0.6700-10, 0.6675-80

In conclusion, while the AUD/USD pair experienced a slight dip on Monday, the overall outlook remains bullish. Traders should keep a close eye on upcoming US economic data and Fed commentary for potential catalysts that could drive the pair higher.More By This Author:USD/JPY Holds Steady As Markets Digest Japanese Wage Data And BOJ Speculation
AUD/USD Continues to Rise On Fed Rate Cut Expectations
EUR/USD Technical Analysis: Bullish Momentum Continues