The AUD/USD currency pair experienced a decline of 0.63% last week, marking the third consecutive week of losses. This downward trend is due to a combination of economic data pressures and shifting political dynamics that have strengthened the US dollar and put pressure on the Australian dollar.
Recent economic data from the United States, including retail sales and initial jobless claims, has exceeded expectations and challenged predictions of a hard economic landing. This has led to a stronger US dollar as traders reassess their outlook on the Federal Reserve. The revival of "Trump trades" has also contributed to this trend.
The rally in the AUD/USD was partly driven by expectations of fiscal stimulus from China, but uncertainty remains regarding the specifics of this stimulus package. Australia's economic calendar appears light, with the focus shifting to the upcoming third-quarter consumer price index (CPI) data.
The recent strong employment figures in Australia and the revision of Federal Reserve rate expectations have delayed the anticipated timing of the Reserve Bank of Australia's (RBA) first full rate cut. From a technical perspective, the AUD/USD has faced downward pressure after rejecting multi-month downtrend resistance. The pair has found support just above the critical support region, but a sustained break below this support could trigger a sell-off.
Traders and analysts will closely monitor these levels as they assess the pair's future movements.