The Australian Dollar (AUD) recovers intraday losses and enters positive territory on Monday, possibly spurred by increases in the domestic share market. The ASX 200 Index rises during the week's first session, aided by a spike in technology firms. However, the solid US Dollar (USD) may attempt to limit the AUD/USD pair's gain.
The Australian Dollar (AUD) encountered problems following the announcement of unchanged Final Retail Sales and disappointing Trade Balance data from Australia the previous week. Notably, Australia posted its smallest trade surplus in five months in February, which was largely due to a drop in iron ore shipments.
The US Dollar Index (DXY) rose on higher US Treasury yields following the announcement of strong nonfarm payrolls data from the United States (US) on Friday.
The improving job market performance has lessened the chances of the Federal Reserve cutting interest rates in June. According to the CME FedWatch Tool, the chances of a rate cut have dropped to 46.1%. Traders are waiting for the March US Consumer Price Index data, which is planned for release on Wednesday.
Technical Analysis: The Australian dollar could test the psychological barrier of 0.6600.
On Monday, the Australian dollar traded at approximately 0.6580. The immediate resistance region is located near the 61.8% Fibonacci retracement level of 0.6596, which coincides with the psychological level of 0.6600. A break above this level might accelerate the AUD/USD pair towards the significant level of 0.6650, followed by March's high of 0.6667. On the downside, critical support is seen at the nine-day Exponential Moving Average (EMA) of 0.6557 and the major support level of 0.6550.
Paraphrasing text from "FX Street" all rights reserved by the original author.
