Aussie Recovers, Mideast Risks May Limit Upside

Fundamental Analysis

* Geopolitical Perils: AUD/USD sees a slight rebound from a two-month low reached on Friday, driven by profit taking among sellers while market focus on attention on escalating geopolitical tensions in the Middle East. Iran retaliated against Israel late Saturday with explosive drones and missiles following a suspected Israeli attack on its consulate in Syria earlier this month. This raises concerns about escalating conflicts in the Middle East. Despite this, markets remain relatively stable, as indicated by positive sentiment in US equity futures. This stability serves as a significant support factor for the risk-sensitive Australian Dollar (AUD), with expectations for a continued recovery in the near term.

Technical Analysis

* Technical Breakout: AUD/USD was traded higher following prior rebound from the support level 0.64500. MACD which illustrate bullish momentum signal with the formation of golden cross suggest the pair to extend its rebound towards the resistance level.

* Resistance and Targets: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 0.65100. Conversely, a breach below the level 0.64500 would indicate the potential trend continuation and further extend its losses.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Moving forward, market focus turns to the US economic calendar, along with speeches from Federal Reserve officials and geopolitical updates, that will influence USD demand and could impact the AUD/USD pair. Additionally, investors will await Chinese macroeconomic data during Tuesday’s Asian session.

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Monitoring

Stay updated on US and Australian data, Middle East tension and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.