AUD/USD Buyers Seek Control Ahead of U.S. Retail Sales Data
Market Overview
The U.S. Dollar extended its decline on Monday, reaching a five-month low against major counterparts amid uncertainty surrounding trade policies under President Donald Trump and softer macroeconomic data. This weakness created a favorable environment for the Australian Dollar, allowing it to gain ground against the Greenback. With the market anticipating key U.S. retail sales data, traders are positioning themselves cautiously as they assess the sustainability of the recent AUD/USD gains.
Technical Analysis
On the four-hour chart, AUD/USD has gained bullish momentum following a period of range-bound trading. Buyers have pushed the pair to test the key resistance at 0.63333, attempting to establish support above this level. A confirmed breakout would reinforce the bullish outlook, paving the way for further gains toward 0.63508, followed by 0.63731 and 0.63977.
Momentum indicators support the bullish scenario. The RSI is trending higher, while MACD histogram bars are expanding in positive territory, reflecting increasing buying interest. However, failure to hold above 0.63333 could invite selling pressure. A break below 0.63087 would shift sentiment, exposing the next downside target at 0.62689 and invalidating the bullish setup.
Key Technical Levels
- Resistance 1: 0.63508
- Resistance 2: 0.63731
- Resistance 3: 0.63977
- Support 1: 0.63333
- Support 2: 0.63087
- Support 3: 0.62689
Fundamental Drivers
The key risk event for AUD/USD today is the release of U.S. retail sales and core retail sales data. If consumer spending surpasses expectations, it could strengthen the U.S. Dollar and cap further gains in AUD/USD. Conversely, weaker-than-expected retail sales figures may reinforce the Greenback’s bearish trend, allowing the Australian Dollar to extend its rally.
Market sentiment remains driven by broader macroeconomic developments, particularly concerns over U.S. trade policies and economic performance. Any fresh developments on fiscal policy or geopolitical risks could influence risk appetite and impact AUD/USD price action.
Conclusion
AUD/USD is testing critical resistance levels as buyers attempt to sustain momentum. A break above 0.63508 could accelerate gains, while failure to hold 0.63333 may shift the focus back to key supports. U.S. retail sales data will be a decisive factor in determining short-term direction.
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