AUD/USD is currently trading roughly 2.5% above its June low, though it remains capped by resistance in the 0.7070 to 0.7090 zone. Despite this technical hurdle, bullish traders remain confident that the broader trend favors further upside. For now, however, they appear to be waiting for a fresh catalyst to reignite the rally.

Part of this bullish confidence stems from supportive external market dynamics. Copper has surged to a two-month high, equity markets have pushed to fresh all-time highs, and gold and silver appear to be stabilizing after steep declines earlier in the year. If these cross-asset tailwinds persist, they could help drive AUD/USD higher.

However, notable risks remain, particularly around upcoming U.S. labor market data. Reports including the ADP employment figures, nonfarm payrolls, weekly jobless claims, and the ISM non-manufacturing index will offer insight into labor market health. Should these releases point to cooling job growth rather than overheating, markets may scale back expectations for Federal Reserve rate hikes , likely triggering broad U.S. dollar weakness and giving AUD/USD room to resume its climb.

If the pair breaks above the 0.7070 to 0.7090 zone—which contains both the 50% Fibonacci retracement of the 0.7277-0.6867 decline and the June 15 daily high—the next test would likely be structural resistance near 0.7190-0.7220. Technical indicators support this scenario, as daily and monthly RSIs point to upward momentum, and AUD/USD continues to trade above its rising 10-, 21-, and 200-day moving averages.
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)