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AUD/USD Holds Steady Above 0.6520: What's Driving the Pair? | Key Factors Behind the Aussie's Resilience
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Dogecoin news redditAustralian dollar continues to demonstrate resilience against its US counterpart, with the AUD/USD pair trading comfortably above the 0.6520 threshold during Monday's subdued session. As markets observe the Easter holiday in Australia, traders are evaluating several fundamental factors that could influence the currency pair's trajectory in the coming sessions.Recent economic indicators from the United States have painted a mixed picture for forex participants. The latest Personal Consumption Expenditures (PCE) data revealed a 2.5% year-over-year increase in February, matching market expectations. While the monthly figure came in slightly below consensus at 0.4%, the core PCE reading (excluding volatile food and energy components) showed a 2.8% annual gain with a 0.3% monthly increase. These inflation metrics suggest that price pressures remain persistent, potentially delaying any immediate policy easing from the Federal Reserve.Fed Chair Jerome Powell's recent comments have reinforced market expectations for three potential rate cuts in 2024, with the first reduction anticipated in June. This cautious approach to monetary policy has contributed to the 'higher for longer' narrative surrounding US interest rates, which typically provides underlying support for the greenback. However, the Australian dollar has managed to hold its ground despite this dollar-supportive environment.Turning to the Australian dollar's fundamental drivers, positive developments in China's manufacturing sector have helped offset some downward pressure on the currency. The National Bureau of Statistics (NBS) Manufacturing PMI surprised to the upside, climbing to 50.8 in March from 49.1 in February - crossing above the crucial 50-point threshold that separates expansion from contraction. The non-manufacturing sector also showed improvement, with the PMI rising to 53.0 from 51.4 previously.Technical analysis reveals several interesting levels for AUD/USD traders to monitor:- Immediate support rests near 0.6503 (Daily Pivot Point S1)- Resistance emerges around 0.6531 (Daily Pivot Point R1)- The pair currently trades between its 20-day (0.6560) and 50-day (0.6548) SMAsMarket participants will be closely watching the upcoming US ISM Manufacturing PMI release for March, with expectations pointing to a modest improvement to 48.4 from February's 47.8 reading. Any significant deviation from this forecast could spark fresh volatility in the currency pair.As the trading week progresses, the AUD/USD's trajectory will likely depend on the interplay between US economic data releases and developments in China's economic recovery. The currency pair's ability to maintain its position above key technical levels suggests underlying strength, though traders should remain alert to potential shifts in market sentiment.