AUD/USD extends gains, approaching 0.6540 highs on risk appetite

The Aussie Dollar remains outperforming its peers on Friday, fuelled by a moderate risk appetite. The pair has reversed a previous decline and is trading higher for the fourth consecutive day, approaching weekly highs at 0.6530 and on track to a nearly 1% rally this week.

AUD/USD Technical Overview

The AUD/USD pair is trading around 0.6510 on Friday. Technical analysis on the daily chart suggests a bullish market sentiment, with the 14-day Relative Strength Index (RSI) positioning above the 50 level. Additionally, the pair remains above the nine-day Exponential Moving Average (EMA), signaling that short-term momentum is strengthening.

On the upside, the AUD/USD pair could explore the area around the psychological level of 0.6600, followed by the nine-month high at 0.6625, which was recorded on July 24.

The AUD/USD pair may test the nine-day EMA at 0.6501, aligned with the 50-day EMA at 0.6498. Further declines below could weaken the short- and medium-term price momentum and prompt the pair to test the two-month low of 0.6419, which was recorded on August 1, followed by a three-month low at 0.6372, recorded on June 23.

Fundamental Overview

Investors are still celebrating the strong export figures from China released on Thursday. China’s exporting activity increased 8% in July after a 7.2% rise in June, and the trade surplus widened to CNY 705.1 billion from CNY 585,96 billion in the previous month.These figures suggest that the Asian leading economy is weathering Trump’s tariffs, and has improved confidence in the country’s economic outlook, contributing to buoy the market mood.

Rumours about changes in the Fed keep weighing on the USD

The US Dollar, on the other side, remains steady near lows, with traders wary of placing large US Dollar bets amid rumours of replacements in the Federal Reserve. Speculation about Governor Waller replacing Trump and economic adviser Miran filling Kugler’s vacancy at the Board feeds investors’ hopes of further rate cuts in the next months.U.S. jobless Claims figures released on Thursday added to the evidence of a weakening labour market. Claims for unemployment benefits increased by 8,000 to 226,000, instead of the 221,000 forecasted by market analysts.Later on Thursday, St Louis Fed Governor Raphael Bostic curbed hopes of rate cur¡ts in September, warning about the potential impact of Tariffs, but markets are still pricing neary 90% chances that the central bank will ease uts monetary policy after the summer.