Daily Price Outlook
During European trading session, the AUD/USD currency pair faced downward pressure and remain under pressure around 0.6384 level as traders remained cautious ahead of the US Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) data. However, the Australian Dollar found some support following the release of Australia’s strong trade balance data.
AUD/USD Under Pressure Amid US Economic Weakness and Trade Optimism
On the US front, the US dollar is benefitting from a combination of factors, including growing optimism over US trade talks. President Donald Trump signaled a high likelihood of reaching a trade deal with China, with the possibility of future agreements with India, South Korea, and Japan. His remarks came after Beijing exempted certain US goods from its hefty tariffs, fueling expectations of an easing in trade tensions.
Moreover, the US economic outlook remains a key driver of USD strength. Recent data indicated a contraction in US GDP, with a 0.3% annualized decline in Q1 2025, missing expectations of growth.
Despite this, the US Dollar Index (DXY), which tracks the greenback against six major currencies, strengthened to around 99.70, extending its rally for the third consecutive day. This upward momentum was fueled by softening market expectations of aggressive rate cuts by the US Federal Reserve.
AUD/USD Supported by Australia’s Robust Trade Surplus
On the other hand, the Australian Dollar received support from the country’s trade data. The Australian Bureau of Statistics reported a substantial trade surplus of AUD 6.9 billion for March, well above the forecasted AUD 3.13 billion and the revised February figure of AUD 2.85 billion.
This strong surplus was driven by a 7.6% rise in exports, with imports declining by 2.2%. The data bolstered the Australian Dollar, offering relief amid a cautious global economic outlook.
Furthermore, Australia’s inflation data also helped support the AUD. The Consumer Price Index (CPI) for Q1 2025 rose by 0.9% quarter-over-quarter, exceeding market expectations of 0.8%.
The annual CPI increase of 2.4% also surpassed forecasts, which could indicate that inflationary pressures are not as subdued as previously anticipated. As a result, market expectations for further interest rate cuts from the Reserve Bank of Australia (RBA) have softened.
RBA’s Policy Outlook and US Tariffs Impact on AUD/USD
Despite the encouraging trade and inflation data, the Australian dollar faces challenges as markets remain wary of potential economic fallout from US tariffs. Moreover, the RBA’s cautious stance on further rate cuts amid persistent inflation pressures suggests that Australia’s economy is still under strain, limiting the upside for the AUD.
AUD/USD – Technical Analysis
The Australian Dollar (AUD/USD) is trading under pressure near $0.63900 after rejecting key resistance at $0.64192. Price action remains capped by a descending trendline that has contained rallies since April 15, reinforcing the short-term bearish structure.
The recent rejection forms a lower high near $0.64205, just beneath a confluence of resistance levels and the 50-hour SMA, currently at $0.63974, acting as dynamic resistance.
The current candlestick structure reveals bearish continuation potential, with a strong bearish engulfing candle forming after multiple indecisive attempts to break the $0.64192 zone.
The RSI has turned lower from 53.38 and now prints at 44.84, suggesting waning bullish momentum and no divergence—aligning with broader bearish sentiment.
On the downside, immediate support lies at $0.63662, followed by $0.63487 and then $0.63335. If the pair breaches $0.63659 with follow-through, the move could extend to test April’s lows.
The confluence of the descending trendline and failure to establish higher highs reaffirms bearish bias. A confirmed break below $0.63985 would validate short entries, targeting $0.63659 while capping risk with a stop-loss above $0.64205.
With both price and RSI failing to push higher and no bullish reversal patterns present (e.g., Doji, Hammer, or Piercing Line), the path of least resistance remains to the downside. Unless price recovers and sustains above the 50 SMA, intraday rallies may continue to be sold into.
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