At the beginning of the new trading week, the AUD/USD pair is showing steady upward momentum, recovering from a slight pullback and once again approaching the highs seen in November 2024.The Australian dollar is primarily supported by improved sentiment amid the resumption of trade negotiations between the U.S. and China — Australia's key trading partners. This strengthens demand for the Australian dollar, given its sensitivity to the Chinese economy.

Optimism is further bolstered by the upcoming meeting between high-ranking U.S. officials and China's Vice Premier He Lifeng in London. Positive signals that emerged after the phone conversation between U.S. President Donald Trump and Chinese President Xi Jinping are also fueling expectations of progress in the trade dialogue. This provides additional support for the Australian currency, despite weak macroeconomic data from China, including a decline in consumer inflation and a drop in imports.

On the other hand, the U.S. dollar remains under pressure despite strong U.S. employment data released on Friday. Although the number of new jobs in May exceeded expectations, the stable unemployment rate and wage growth failed to significantly alter market expectations regarding a Fed rate cut. Moreover, political pressure from President Trump on the Fed for aggressive rate cuts, along with concerns over U.S. fiscal sustainability, continue to cap the dollar's growth potential.

Thus, the overall fundamental backdrop favors further strengthening of the AUD/USD pair. The absence of significant U.S. economic releases on Monday means traders will focus primarily on news related to the trade negotiations. Any positive headlines could contribute to further gains for the pair.

From a technical standpoint, the move above the psychological level of 0.6500 and positive oscillators on the daily chart favor the bulls. A subsequent breakout above the annual high around the 0.6540 level would confirm the positive outlook, paving the way for a move toward the 0.6600 level and beyond.

Conversely, any corrective decline below the psychological level of 0.6500 and the support zone around 0.6470 can be seen as a buying opportunity, likely remaining limited by the 0.6400 level. The next significant support is located around 0.6360, and a decisive break below this area would shift the short-term bias in favor of the bears.

Nevertheless, as long as oscillators remain positive across all timeframes, the path of least resistance for the pair remains upward.