Ella 
AUD/USD attracted some sellers after Thursday’s intraday rise into the 0.6510 area and dropped to fresh intraday lows during the first half of the European session, although follow-through was lacking. Spot prices are currently trading below the psychological 0.6500 mark, almost flat on the day, and appear to have halted their recovery from the lowest levels since August 5 hit earlier this week.
The US dollar (USD) has recovered and reversed some of the previous day’s losses to two-week lows, becoming a key factor weighing on AUD/USD. U.S. macro data released on Wednesday pointed to the resilience of the U.S. economy and stagnant inflation progress, suggesting that the Federal Reserve (Fed) may be cautious about further cutting interest rates. This, in turn, triggered a small rebound in U.S. Treasury yields, helping to revive demand for the dollar.
In addition, ongoing geopolitical risks arising from the protracted Russia-Ukraine war and concerns about U.S. President-elect Donald Trump’s tariff plans also provided additional support for the safe-haven dollar. This, coupled with the renewed trade war between the United States and China, has helped drive capital flows away from China’s proxy currency, the Australian dollar. Nonetheless, a positive risk tone and a hawkish stance from the Reserve Bank of Australia (RBA) may limit the downside for AUD/USD.
Traders may also avoid aggressive bets amid relatively thin liquidity amid the U.S. Thanksgiving holiday. Nonetheless, the aforementioned fundamental backdrop and lack of meaningful buying interest suggests AUD/USD has minimal downside resistance. Therefore, any attempted recovery may still be viewed as a selling opportunity, and the rally momentum may quickly dissipate.
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