AUD/USD technical analysis: New risk appetite contributes to further gains

On Wednesday (July 23), the Australian dollar continued to rise against the US dollar (AUD/USD), extending its upward momentum into the fourth consecutive trading day. The strengthening of the currency pair was driven by improved market sentiment, driven by the announcement of a major tariff agreement with Japan, including a 15% tariff on Japanese exports. In addition, negotiations between China and the United States are gradually advancing as the August 12 deadline approaches.

Westpac reported that its leading index continued to reflect weaker economic momentum. The six-month annualised growth rate of the Westpac-Melbourne Institute's leading index fell to 0.03 per cent in June, down from 0.11 per cent in May. The slowdown was driven by weaker commodity prices, cooling sentiment and a reduction in working hours.

The latest meeting notes from the Reserve Bank of Australia (RBA) show that the board agreed that further rate cuts are necessary over time, with the focus on the timing and magnitude of rate cuts. Most members felt that it was better to wait for confirmation of a slowdown in inflation before easing policy. Most members believed that cutting rates three times out of four meetings was not a "prudent and gradual" approach.

technical analysis

(AUD/USD daily chart source: Internet)

According to GMI FX technical analysis, the AUD/USD maintained a strong tone and further accelerated its gains on Wednesday, extending the latest bull market phase into a fourth session. The pair hit its highest level in more than a week on the back of the announcement of a US-Japan trade deal to boost new risk appetite.

The bulls are pressuring the 2025 high of 0.6595 (July 11), a breakout of which would mark the end of the four-week consolidation phase and the continuation of the rally, with the next target expected to point to 0.6700 (the larger 6942/0.5914 downtrend Fibonacci 76.4% retracement).

The daily level indicator turned bullish (the 14-day momentum indicator entered the positive area/the moving average was fully bullish/the price was supported by the thick daily Ichimu equilibrium cloud), but the stochastic indicator entered the overbought area, so the possibility of hesitation at the key level of 0.6595 cannot be ruled out.

The potential pullback should stabilize above the daily turning line (0.6525) to maintain the integrity of the new bulls.

Resistance: 0.6595; 0.6628; 0.6648; 0.6682

Support: 0.6558; 0.6543; 0.6525; 0.6487

According to GMI foreign exchange quotation data, at 19:50 Beijing time, the Australian dollar/US dollar was quoted at 0.6599/6600, an increase of 0.72%.