AUD/USD Recovery Gains Momentum After Hawkish RBA and Dovish BOJ

AUD/USD has picked up momentum on Wednesday following Monday’s spike low at 0.6348, the lowest level since early November 2023.

The Australian dollar has benefited from the hawkish stance of the Reserve Bank of Australia (RBA) on Tuesday, diverging from other major central banks, along with reduced fears of a US recession and the latest dovish shift from the Bank of Japan (BOJ).

The pair rose by 0.85% during Asian and early European trading on Wednesday, breaking through key barriers at the 0.6560/70 zone (daily Kijun-sen, 50% retracement of the 0.6798 to 0.6348 decline, and the base of the rising thick daily cloud).

A firm break above this level adds to bullish signals and exposes the next strong resistance at 0.6590/0.6600 (converging 200/100 DMAs). A close above this range would further strengthen the near-term outlook and open the path for a more robust recovery.

Nevertheless, caution is warranted as the thick daily cloud continues to exert downward pressure. The 14-day momentum remains deeply negative, and the stochastic indicator has entered overbought territory.

A daily close above the 0.6520/10 zone will be crucial for maintaining the positive bias.

Res: 0.6573; 0.6590; 0.6601; 0.6626
Sup: 0.6530; 0.6510; 0.6472; 0.6455