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The AUD/USD pair has rebounded from a key bearish gap near the 0.7030 level, which marks the lower end of a three-week-old trading range, and has regained the 0.7100 psychological level during the Asian session. This move follows a week of consolidation after the pair tested critical support levels, with traders closely watching whether it can sustain momentum above 0.7100 to signal a potential reversal in the USD's dominance. For forex traders, this development is significant as it challenges the USD's recent strength amid mixed economic data from major economies. A sustained break above 0.7150 could trigger broader risk-on sentiment, while a failure to hold above 0.7100 might see renewed bearish pressure. The pair's performance will also influence cross-currency flows in the Asia-Pacific region, where AUD is a key component. Looking ahead, investors should monitor the 0.7150-0.7200 zone as the next critical resistance level. Broader market factors, including Fed policy signals and commodity price movements (particularly iron ore), will play a pivotal role in shaping AUD's trajectory. Traders may also watch for confirmation of a bullish breakout pattern on the weekly chart.
