On Monday, the Australian Dollar (AUD) broke a two-day losing skid on risk-on attitude, bolstered by signs of de-escalating global tensions. An Iranian official's remark that there are no urgent preparations for retaliation against Israeli attacks contributes to the better atmosphere.
The Australian Dollar may face hurdles in the coming months, particularly as domestic inflation continues to decline, in line with the Reserve Bank of Australia's (RBA) recent estimates. Furthermore, the continuously tight labor market may lead to calls for an RBA rate cut before the end of the year.
The US Dollar Index (DXY), which measures the US Dollar (USD) against six major currencies, is under pressure despite an uptick in US Treasury yields. The potential downside for the USD pair may be limited by statements from Federal Reserve (Fed) officials indicating a shift toward a more hawkish posture.
Technical analysis: The Australian dollar continues below the significant barrier of 0.6450.
On Monday, the Australian dollar traded at approximately 0.6440. The AUD/USD pair stays below the important support range of 0.6456, while the 14-day Relative Strength Index (RSI) remains below 50, indicating a negative attitude. Significant support is seen at the psychological level of 0.6400.
On the upside, the AUD/USD pair faces immediate resistance at the significant milestone of 0.6450, followed by the 14-day Exponential Moving Average (EMA) at 0.6476. A break over this level may drive the pair to the psychological milestone of 0.6500.
Paraphrasing text from "FX Street" all rights reserved by the original author.
