The Australian Dollar against the USD (AUD/USD) experienced an increase after declining in the previous trading session. At the time of writing, during the Asian session on Thursday, this currency pair is trading at around 0.6480. This strengthening occurred due to the underperformance of US Treasury yields, as well as US economic data that fell short of expectations.

In addition to these factors, support also came from the release of Australia’s Private Capital Expenditure data for the second quarter (Q2), which showed positive results on Thursday. The data indicated that intentions to invest in private capital expenditures increased by 2.8%, a better figure than the previous estimate of 1.2% and surpassing the prior number of 2.4%.

The 23.6% Fibonacci retracement level at 0.6488 emerged as the first resistance level, followed by the psychological level at 0.6500. If strongly breached, this could support the Australian Dollar (AUD/USD) to explore the area around the highest levels in the past three weeks, which is at 0.6522. Furthermore, there is a 38.2% Fibonacci retracement level at 0.6565 that could be the next target.

On the less positive side, this currency pair may find key support around the 21-day Simple Moving Average (SMA) at 0.6474, followed by the nine-day SMA at 0.6445. A breach below these levels could put pressure on the AUD/USD pair to move towards the psychological level around 0.6400.

The 14-day Relative Strength Index (RSI) remains below the 50 mark, indicating a bearish tendency among traders trading the AUD/USD pair. Meanwhile, the Moving Average Convergence Divergence (MACD) line is still below the midpoint, but there is visible divergence above the signal line. This divergence reflects an improvement in current momentum.

In the short term, the underlying market trend depicts a bearish outlook as long as the AUD/USD pair remains below the 50-day Exponential Moving Average (EMA), which is located at 0.6610.

Disclaimer!

This analysis is based on fundamental and technical perspectives from reliable sources and is not intended as advice or solicitation. Always remember that this content aims to enrich readers' information. Always conduct your own independent research regarding other forex information to serve as a reference for your trading.

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