AUD/USD Price Analysis – March 13, 2025

Daily Price Outlook

During the European trading session, the AUD/USD currency pair failed to stop its downward trend and extended its losses for the third consecutive session around $0.6285 on Thursday.

However, the pair found some support as the US Dollar (USD) remained under pressure due to uncertainty surrounding US tariffs and growing concerns over a potential recession.

Despite this, the Australian Dollar (AUD) struggled to gain traction following a sharp drop in Australia’s Consumer Inflation Expectations and rising global trade tensions, which weighed on market sentiment.

AUD/USD Pressured by Trade Disputes and Weak Inflation Expectations

The Australian Dollar came under fresh selling pressure after US President Donald Trump confirmed that Australia would not be exempt from the 25% tariffs on aluminum and steel. This decision heightened trade concerns and weighed on market sentiment.

At the same time, Australia’s Consumer Inflation Expectations dropped sharply to 3.6% in March from 4.6% in February, the lowest level since April 2024. This unexpected decline raised concerns about inflation in Australia, making it harder for the AUD to recover.

Adding to the pressure, Australian Prime Minister Anthony Albanese confirmed that Australia would not respond with its own tariffs against the US.He explained that retaliatory measures would only raise costs for Australian consumers and push inflation even higher.

This decision left the Australian Dollar more exposed to trade uncertainties, adding to its weakness in the market.

US Dollar Remains Subdued Amid Fed Rate Cut Speculation

On the US front, the broad-based US Dollar struggled as the US Dollar Index (DXY) hovered around 103.50. Traders analyzed the latest Consumer Price Index (CPI) data, which showed that inflation slowed in February.

The report increased expectations that the Federal Reserve (Fed) could cut interest rates sooner than expected. Monthly headline inflation dropped to 0.2% in February from 0.5% in January, while core inflation also eased to 0.2%, missing the expected 0.3%. The weaker inflation numbers reduced demand for the US Dollar, providing some support to the AUD/USD pair.

However, market sentiment turned negative after the European Union (EU) responded to US tariffs with its own measures. The US had imposed a 25% levy on European steel and aluminum, and in retaliation, the EU announced tariffs on $26 billion worth of US goods.

This move added to global trade uncertainty. At the same time, trade tensions between the US and China remained unresolved, with reports indicating that negotiations between the two countries had stalled, further weighing on market confidence.

RBA Policy Outlook and Market Focus on Key US Data

Investors are keeping a close eye on the Reserve Bank of Australia (RBA) and its policy outlook, especially after recent economic data reduced expectations for more rate cuts.

Australia’s economy showed unexpected strength, with growth surpassing forecasts and picking up for the first time in over a year.

However, the RBA remains cautious, as global trade uncertainties and weakening consumer confidence could still influence future policy decisions.

Looking ahead, traders are focused on Thursday’s US Producer Price Index (PPI) data and weekly jobless claims. These reports could offer new clues about the US economy and impact the direction of the US Dollar.

If the data comes in stronger or weaker than expected, it may create market volatility and influence the AUD/USD pair in the short term.

AUD/USD – Technical Analysis

The Australian dollar is struggling to gain momentum, with AUD/USD trading at $0.6296, down marginally as traders assess shifting market sentiment.

The pair remains under pressure below its pivot point at $0.6327, signaling potential downside risks in the near term. Despite attempts at recovery, the 50-day EMA at $0.6298 is acting as a dynamic resistance level, keeping a lid on bullish attempts.

If AUD/USD remains below $0.6327, sellers could push the pair toward immediate support at $0.6268, with a break lower exposing $0.6233 and $0.6198 as next downside targets.

However, should buyers regain control, resistance stands at $0.6355, followed by $0.6383 and $0.6407, which will need to be cleared for a shift in momentum.

Macroeconomic factors, including expectations of Federal Reserve rate cuts and risk sentiment in global markets, will play a crucial role in the Aussie dollar’s direction.

The Reserve Bank of Australia’s stance on monetary policy also remains in focus, with any hawkish signals potentially providing support to the currency.

For now, AUD/USD remains bearish below $0.6309, with sellers targeting key support levels. A sustained move below $0.6268 could accelerate losses, while a break above resistance at $0.6355 would indicate a potential reversal.

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