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The AUD/USD pair is showing signs of a technical rebound as risk-on sentiment returns to global markets. A broad rally in U.S. equities, with the S&P 500 and NASDAQ rising over 0.29% and 0.54% respectively, has lifted the Australian Dollar. The currency has found support at a critical cluster of moving averages (100-bar, 200-hour, and 100-hour MAs) near 0.7079, preventing a breakdown toward key support levels. Traders are now focusing on the 100-hour MA at 0.7098 as the immediate resistance, followed by last week’s high of 0.7145 and the yearly peak of 0.7146. A successful breakout above 0.7146 would mark a structural shift, pushing the pair to its highest levels since 2023. For forex traders, this technical reversal is significant as it signals a shift from bearish momentum to potential bullish momentum. The failure of sellers to push below key support levels has created a short-covering rally, which could attract new buyers. The broader equity market rebound also suggests improved risk appetite, which typically favors commodity-linked currencies like the AUD. This dynamic is crucial for traders monitoring cross-asset correlations. MENA investors should watch for confirmation of the bullish breakout above 0.7098 and subsequent targets. A sustained move toward 0.7146 could trigger a wave of long positions, especially if global equity markets continue their upward trend. Key indicators to monitor include the S&P 500’s momentum and the AUD/USD’s volume during the breakout attempt.
