The Australian Dollar (AUD) has continued its upward trend against the US Dollar (USD), reaching a recent high of 0.6615. This surge is attributed to robust technical indicators and favorable external factors, as noted by analysts Frances Cheung and Christopher Wong from OCBC. The currency is now approaching key resistance levels, reflecting ongoing bullish momentum.
Strength in the AUD follows the release of Australia’s GDP data, which reinforces the positive outlook for the country’s economic recovery. Despite an initial dip immediately after the GDP report, the AUD quickly regained strength, supported by resilient domestic demand and a rebound in household consumption, services, and housing activity. The report suggests that the economic recovery is likely to remain sustained into the first half of 2026.
Technical Outlook and Market Sentiment
The daily trading chart for AUD/USD indicates that the bullish momentum remains intact, with the Relative Strength Index (RSI) showing positive signs. Analysts recommend maintaining a long position on the AUD, highlighting resistance levels at 0.6610 to 0.6640 before potentially reaching 0.6700. Conversely, support is found at 0.6550 and 0.6510.
The ongoing strength of the AUD is consistent with expectations of an extended pause by the Reserve Bank of Australia (RBA) on interest rates. External drivers, such as a steady Chinese Renminbi (RMB) and a weakening USD, further contribute to the favorable conditions for the Australian currency. The Federal Reserve’s perceived shift towards easing monetary policy has also added to the downward pressure on the USD.
Upcoming Economic Indicators
Market participants are keenly awaiting additional economic indicators, including trade data from the Australian Bureau of Statistics, set to be released on Thursday, October 30, 2023. Analysts anticipate a widening trade surplus of 4,200 million Australian dollars for October, up from 3,938 million in the previous reading. This data will be closely monitored for its potential impact on the AUD’s trajectory.
As the Australian Dollar continues to climb, it reflects the resilience of the Australian economy amidst global uncertainties. Investors and traders alike will be watching closely as the currency approaches critical resistance levels, with implications for international trade and investment strategies.
