AUD/USD pauses after reaching a six-month high

• AUD/USD pair reaches 0.6537 at the start of the week's session, a level last seen on November 25, 2024.
• AUD/USD braces for volatility with US Durable Goods and Consumer Confidence Data.
• AUD/USD retreats from six-month high but remains steady with resistance firming at 0.6500.

The Australian Dollar (AUD) is consolidating within a narrow range against the US Dollar (USD) after reaching a six-month high early Monday. However, the pair retreated from the highs ahead of Tuesday's key economic data.

Recent broad-based weakness in the US Dollar has supported demand for risk-sensitive currencies, allowing AUD/USD to build on its monthly gains. The pair remains resilient, hovering just below the key psychological resistance level at 0.6500.

At the time of writing, AUD/USD is trading near 0.6488, after briefly reaching a six-month high of 0.6537 during the early hours of Monday's session.

AUD/USD rally stalls as markets await US data and trade updates

Over the past two months, the Australian Dollar (AUD) has staged an impressive recovery against the US Dollar (USD), rebounding from a low of 0.5914 on April 9 to test a six-month high of 0.6537 earlier on Monday. 

The rally has been driven in part by sustained USD weakness and improving sentiment toward risk-sensitive currencies.

Despite the bullish momentum, AUD/USD struggled to gain a firm foothold above the psychological 0.6500 level, with thin trading conditions prevailing as US markets remained closed for Memorial Day. 

The announcement of a temporary delay in US tariffs on European imports also offered modest support for the Greenback, easing some immediate concerns around escalating trade tensions.

As AUD/USD braces for the return of US market liquidity, attention now shifts to high-impact economic data and fresh trade developments. 

AUD/USD awaits Durable Goods and Consumer Confidence data

On Tuesday, the spotlight turns to the US Census Bureau's Durable Goods Orders report for April. This indicator tracks new orders placed with US manufacturers for long-lasting goods and offers a gauge of industrial activity. 

Following a robust 9.2% increase in March, markets are bracing for a sharp reversal, with forecasts pointing to an 8% contraction, reflecting potential fallout from trade-related disruptions.

Later in the day, at 14:00 GMT, the Conference Board will publish its Consumer Confidence Index for May. After plunging to a post-pandemic low of 86.0 in April, the upcoming print will provide further insight into US households' economic outlook amid mounting fiscal and geopolitical uncertainties.

These data releases will set the tone for the AUD/USD in the short term, particularly ahead of Wednesday's release of Australia's Monthly Consumer Price Index (CPI) for April.

Markets expect the annual inflation rate to ease slightly to 2.3% from 2.4%, reinforcing expectations that the Reserve Bank of Australia (RBA) may remain on hold in the near term.

With monetary policy divergence continuing to influence market positioning, traders will be closely watching for signs of shifting sentiment as economic data, inflation readings, and trade headlines dictate direction.