AUD/USD Makes Recovery above Mid-0.6500s ahead of Key Data Releases

The AUD/USD pair shows signs of a rebound from a one-week low hit earlier on Tuesday, climbing back above the mid-0.6500s during the European trading session. Several factors contribute to this upward movement.

Firstly, reports suggest that China may lift tariffs on Australian wine by the end of March, boosting confidence in the Australian Dollar (AUD). Additionally, a slight decline in the US Dollar (USD) aids the pair’s recovery, supported by a decrease in US Treasury bond yields and stable equity markets.

However, the USD’s decline remains limited due to expectations that the Federal Reserve (Fed) will delay interest rate cuts until its June policy meeting. This outlook is reinforced by recent FOMC meeting minutes and comments from Fed officials, indicating a commitment to a hawkish stance amidst persistent inflation and a resilient economy.

Technically, the AUD/USD pair still faces resistance from the 100- and 200-day Simple Moving Averages (SMA). Traders are advised to await a clear breakout above these levels before considering further bullish positions. Meanwhile, attention turns to upcoming US macroeconomic data, including Durable Goods Orders and the Consumer Confidence Index, followed by Australian consumer inflation figures and US GDP data later in the week. These releases are likely to shape the near-term direction of the AUD/USD pair.

AUD/USD