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AUD/USD Currencies

Australian Dollar Fails to Maintain Gains as Subdued Trading and US-China Trade Tensions Mount

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  • April 18, 2025
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The Australian Dollar (AUD) was subdued on Friday despite positive signals from US President Donald Trump about the possibility of reaching a trade agreement with China that would be sealed within the next three to four weeks. While the AUD/USD currency pair had been on a seven-day winning streak, trading volumes were subdued on account of the Good Friday holiday, and worries regarding the economic effects of tariffs on the US kept the US Dollar under pressure. Even these events notwithstanding, the Reserve Bank of Australia’s conservative approach to future interest rate moves and mixed economic data, such as a marginal increase in Australia’s unemployment rate, dented the AUD’s performance. The duo is trading close to the psychological 0.6400 mark, as market players anxiously await developments in further trade talks and signs of global economics. KEY LOOKOUTS • Market players will keenly watch any advancement in the US-China trade talks, especially if a trade pact in the coming three to four weeks is imminent, as it would have a bearing on the AUD, given Australia’s healthy trade relationship with China. •  US Consumer Price Index (CPI) data and labor market indicators, such as jobless claims, will be instrumental in determining the direction of the US Dollar. Better-than-anticipated data might favor the USD, which may cap AUD gains. • Reserve Bank of Australia’s conservative stance towards interest rate actions and its evaluation of economic uncertainties will be instrumental for AUD movements. The rate of future rate cuts, if any, and their size might affect investor attitudes towards the currency. • Being Australia’s biggest trading partner, China’s economic performance—e.g., GDP growth, industrial production, and retail sales—will keep influencing the AUD, especially with the recent optimistic growth in China’s economy surpassing expectations. The Australian Dollar (AUD) was downbeat on Friday despite encouraging news from US President Donald Trump regarding the possibility of a trade agreement with China within the next few weeks. Trading was generally subdued on account of the Good Friday holiday, with market players monitoring the on-going US-China trade talks and their possible influence on the global economy. Though the AUD had been on a seven-day rising streak, the Reserve Bank of Australia’s cautious approach to interest rate hikes and mixed economic indicators, such as a marginal increase in unemployment, kept its performance subdued. The AUD/USD currency pair is trading around the psychological level of 0.6400, and the direction is still unclear as market participants wait for further news in both international trade negotiations and local economic indicators. The Australian Dollar (AUD) was subdued despite hope from US-China trade negotiations, with market activity slowed down by the Good Friday holiday. The AUD/USD currency pair fluctuates around the 0.6400 level, confronted by conflicting economic indicators and ambiguity both from world trade negotiations and local statistics. •  The Australian Dollar (AUD) remained sedate despite encouraging news from US President Donald Trump on US-China trade negotiations. • The trading activity was muted by the Good Friday holiday, diminishing volatility in the markets. • Trump remained hopeful that the United States and China could reach a trade agreement within three to four weeks, something that could impact the AUD. • The US Dollar (USD) was weakening with fears over the economic effects of tariffs and inflation risks. • The latest minutes of the Reserve Bank of Australia reflected continued uncertainty regarding interest rate changes in the future. • The unemployment rate of Australia increased marginally to 4.1%, while employment change was below expectations, which further created uncertainty regarding the AUD. • The AUD/USD currency pair is around 0.6400, with important resistance at 0.6408 and support at 0.6311, reflecting likely price action. The Australian Dollar (AUD) registered minimal movement despite a positive comment by US President Donald Trump regarding the possibility of a trade agreement with China. Trump was optimistic that a trade deal would be reached within the next three to four weeks, which increased expectations of a positive effect on global trade. Nevertheless, market activity was quiet because of the Good Friday holiday, which decreased trading volumes and volatility. AUD/USD DAILY PRICE CHART CHART SOURCE: TradingView Against these events, the Reserve Bank of Australia (RBA) adopted a prudent view regarding the nation’s economic scenario. Although recent economic statistics reported varied results, including a modest rise in the jobless rate and less-than-anticipated change in employment, the RBA reiterated uncertainty over upcoming interest rate decisions. Consequently, the performance of the AUD continued to come under stress, as traders keenly observed global trade talks along with domestic economic readings. TECHNICAL ANALYSIS Australian Dollar (AUD) against the United States Dollar (USD) is exhibiting a bullish inclination, with the AUD/USD pair trading above its nine-day Exponential Moving Average (EMA) and the 14-day Relative Strength Index (RSI) remaining above the neutral 50 level. These signals indicate positive short-term upward momentum. Yet, the pair is confronted with crucial resistance around the psychological 0.6400 level, with additional hurdles at the four-month high of 0.6408. On the negative side, the nine-day EMA at 0.6311 and the 50-day EMA at about 0.6283 serve as immediate support levels, which may assist the pair in holding its present range unless there is a major break below these levels, which may indicate a change in market sentiment. FORECAST The Australian Dollar (AUD) may experience upward momentum if US-China trade negotiations move in a positive direction. Any major breakthrough in the trade deal, as suggested by US President Trump, would be a positive boost for global sentiment and Australia’s economy, given its robust trade relationship with China. Also, if the Reserve Bank of Australia (RBA) delays rate cuts, it would bring some stability to the AUD. Better-than-expected economic reports in Australia, like firm employment numbers or a decrease in the rate of unemployment, may also continue to boost the currency’s potential for gains. Downside threats to AUD come from overall global uncertainties, especially if US-China trade talks breakdown or do not yield an agreement. Deteriorating US Dollar, as a result of persistent inflation and economic issues, could

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AUD/USD Currencies

Australian Dollar Declines Amid Market Caution Ahead of US Nonfarm Payrolls

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  • March 7, 2025
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The Australian Dollar (AUD) weakens as traders exercise caution ahead of the US Nonfarm Payrolls (NFP) report, with market sentiment remaining subdued. Despite a stronger-than-expected Q4 GDP growth and a rising trade surplus, AUD/USD struggles due to ongoing trade uncertainties, geopolitical tensions, and concerns over slowing global economic momentum. While the US Dollar (USD) is stable, backed by a decline in jobless claims, but mixed employment statistics and Federal Reserve policy ambiguity keep the market nervous. Technicals show AUD/USD testing critical support levels, with a risk of downside if the pair goes below the 50-day EMA. Investors now wait for the NFP data to decide the direction of the market. KEY LOOKOUTS • February’s NFP figure, due at 160K, is something traders look forward to, as it may impact USD strength and continue to weigh on AUD/USD. • An improving trade surplus and shrinking imports influence sentiment in the markets, with Chinese economic policy and geopolitical uncertainty acting as a burden on the Australian Dollar. • The Reserve Bank of Australia’s position on growth and inflation is still of great importance, with possible policy change affecting AUD direction. • AUD/USD tests the 50-day EMA at 0.6309; a break below it may trigger more falls, with major support at 0.6187. The Australian Dollar continues to weaken as investors go cautious before the US Nonfarm Payrolls (NFP) release, which is anticipated to report a rebound in job creation to 160K. While Australia’s better-than-anticipated GDP growth and growing trade surplus are not enough to overcome global trade risks and tensions with China, AUD/USD lags, with geopolitical tensions in focus. The Reserve Bank of Australia’s policy outlook remains under the spotlight, with possible changes affecting investor sentiment. Technical indicators indicate AUD/USD testing crucial support on the 50-day EMA at 0.6309, while breaking below that level could initiate further losses towards 0.6187. The Australian Dollar loses strength with investors cautious in anticipation of the US Nonfarm Payrolls (NFP) release, influencing market sentiment. Ongoing trade uncertainties and geopolitical tensions push AUD/USD despite robust Australian GDP growth. Technical support at 0.6309 continues to be important, and a breakdown beneath hints at further potential for losses. • The Australian Dollar loses ground as investors hold back in anticipation of the US Nonfarm Payrolls (NFP) release, which is forecasted to record job growth at 160K. • US Dollar remains strong underpinned by diminished jobless claims, though mixed employment information contributes to market uncertainty. • An increase in China’s trade surplus and weakening imports affects global trade flows, which has an impact on AUD/USD movement. • US/China tensions, as well as trade policy uncertainty, put pressure on the Australian Dollar. • Investors monitor the Reserve Bank of Australia’s attitude toward inflation and economic growth for signs of policy changes. • AUD/USD probes important support at 0.6309 (50-day EMA), with additional downside potential if this level is broken. • The NFP release will be a strong driver for USD strength or weakness, determining the next direction for AUD/USD. The Australian Dollar continues to be under selling pressure as the market players remain cautious before the US Nonfarm Payrolls (NFP) release, an important gauge of the strength of the US labor market. The market players are keeping a close eye on international trade trends, especially China’s increasing trade surplus and falling imports, which have implications for Australia’s export-oriented economy. In the meantime, geopolitical tensions are still influencing market sentiment, with doubt about US trade policy and potential Chinese reaction piling onto economic worries. The Reserve Bank of Australia (RBA) has stuck with its forecast for economic growth to slow down, and although Australian GDP revealed stronger-than-anticipated growth in Q4 2024, general economic uncertainties are leaving investors cautious. AUD/USD Daily Price Chart Chart Source: TradingView In the US, sentiment remains mixed as economic data paint a contradictory picture of growth and stability. While claims for unemployment decreased, other measures of employment, including the ADP Employment Change, fell considerably short of projections, casting doubts on the labor market’s strength. Moreover, expectations regarding Federal Reserve policy change are increasing as analysts argue about whether the Fed will focus more on curbing economic momentum rather than inflation issues. The next NFP report should give more clarity, and the market sentiment as well as investor strategy in the near term would be influenced by that. TECHNICAL ANALYSIS The Australian Dollar (AUD/USD) is trading in a newly established rising channel, reflecting a possible bullish inclination in spite of recent downward pressure. The pair is presently trading around the 50-day Exponential Moving Average (EMA) level of 0.6309, which is an important support level and could be the next point of direction. If this level is sustained, AUD/USD might try and challenge the initial resistance at 0.6408, the three-month high on February 21. A breakdown below this support, however, may allow lower levels, with the next significant support at 0.6187, the four-week low of March 5. The Relative Strength Index (RSI) is still above 50, which indicates that demand continues, but market reservation in anticipation of the US Nonfarm Payrolls (NFP) report may keep aggressive moves in either direction under check. FORECAST AUD/USD may witness a rise, especially if the US Nonfarm Payrolls (NFP) release is disappointing and weakens the US Dollar. A disappointing NFP print, which would be weaker than anticipated, might raise speculation of Federal Reserve rate cuts, thus supporting risk assets such as the Australian Dollar. Moreover, any encouraging news in China’s economic policies, like additional stimulus packages or improved trade performance, might favor AUD’s rebound. If the bullish pressure intensifies, the pair could try to push above the major resistance level of 0.6408, with a subsequent move towards 0.6440 if global risk appetite continues to improve. On the other hand, AUD/USD could be prone to further losses if the US NFP report comes in better than expected, pushing the US Dollar higher. A more robust labor market report may solidify the Federal Reserve’s hawkish position on rate cuts, driving up USD demand. Moreover, persistent trade

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AUD/USD Currencies

Australian Dollar Rises as US Dollar Weaks on Economic Data and Trade Tensions

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  • March 3, 2025
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The Australian Dollar (AUD) recovered on Monday, halting a six-day losing streak after the US Dollar (USD) softened following supportive US PCE inflation data that alleviated worries of surprise inflation surges. Positive Chinese economic data, including an increase in the Caixin Manufacturing PMI, further helped the AUD. Though, rising US-China trade tensions with President Trump escalating tariffs on Chinese imports threaten to spoil the outlook for the currency. Meanwhile, the AUD/USD pair struggles at key support levels of 0.6200, where technical indicators signal a dominant bearish bias except when the pair surges through resistance levels. KEY LOOKOUTS • Surprise in forthcoming US inflation statistics or Federal Reserve policy changes might substantially influence the AUD/USD exchange rate. • The Australian Dollar remains sensitive to China’s economic health, with strong PMI data supporting gains while trade tensions pose downside risks. • Heightened tariff disputes between the US and China could weigh on the AUD, given Australia’s deep trade ties with China. • The AUD/USD pair is testing the 0.6200 support level, with potential resistance at 0.6280 and 0.6290, determining short-term market direction. Traders must keep a close eye on important economic and geopolitical variables that are affecting the Australian Dollar (AUD). US inflation reports and Federal Reserve policy moves will be very important for determining the AUD/USD exchange rate, as any surprise change can cause volatility. China’s economic growth is still an important driver, with good PMI numbers supporting while rising US-China trade tensions offer negative risks. Market players must also observe technical levels since the AUD/USD pair tests the 0.6200 support level, with possible resistance at 0.6280 and 0.6290, which might define the short-term trend. The Australian Dollar’s direction is dependent on US inflation data, Federal Reserve policy, and Chinese economic performance. Rising US-China trade tensions and significant technical levels also influence AUD/USD trends. • Surprises in US inflation reports or Federal Reserve announcements have the potential to affect the AUD/USD currency exchange. • Solid Chinese PMI reading benefits the AUD, while disappointing numbers would affect its performance. • Escalating tariff battles between China and the US risk jeopardizing Australia’s trade-focused currency. • Decreases in the TD-MI Inflation Gauge indicate deflating inflation, affecting the policy of the Reserve Bank of Australia. • AUD/USD is probing the 0.6200 support, with significant resistance at 0.6280 and 0.6290. • The USD is under pressure as inflation numbers are in line with forecasts, dampening fears of aggressive Fed tightening. • US-Ukraine tensions and trade policies could cause general market uncertainty, indirectly influencing AUD/USD trends. The Australian Dollar (AUD) strengthened as the US Dollar (USD) was kept under wraps after the release of US PCE inflation data, which was in line with expectations and helped alleviate concerns regarding surprise inflation surges. Moreover, positive Chinese economic news, such as an increase in the Caixin Manufacturing PMI, also supported the AUD. As China is Australia’s largest trading partner, stronger manufacturing activity boosts demand for Australian exports, reinforcing the currency’s position. Meanwhile, Australia’s TD-MI Inflation Gauge showed a slight decline, indicating a continued slowdown in inflation, which aligns with the Reserve Bank of Australia’s monetary policy stance. AUD/JPY Daily Price Chart Chart Source: TradingView However, global trade tensions remain a critical factor influencing the AUD’s outlook. The US threatened further tariffs on Chinese imports, ramping up the current trade war, which might have spillover effects on Australia’s trade relations. Uncertainty over US-China relations and general geopolitical trends might impact investor attitudes towards the Australian economy. Policy moves by both the US Federal Reserve and the Reserve Bank of Australia will also influence market expectations for future economic conditions and currency movements. TECHNICAL ANALYSIS The AUD/USD currency pair is now probing the important support level of 0.6200, a psychological level that is important for traders. The pair is still under pressure, trading below the nine-day and 14-day Exponential Moving Averages (EMAs), indicating declining short-term momentum. The 14-day Relative Strength Index (RSI) is also below 50, which supports a bearish bias. If the currency falls below 0.6200, it will go even lower to 0.6087, the low of April 2020. To the upside, a strong resistance area will be encountered around 0.6280 (nine-day exponential moving average, EMA) and 0.6290 (14-day EMA). A sustained breakthrough of these will have it touching the latest three-month peak at 0.6408 on its retest. FORECAST Future moves in the Australian Dollar will tend to hinge significantly on releases of economic statistics as well as broader global sentiment. If US inflation stays under control and the Federal Reserve hints at a more conservative strategy to raise interest rates, the USD might depreciate, giving a boost to the AUD. Also, persistent strength in China’s economy, especially in manufacturing, could continue to support the Australian Dollar as Australia has close trade relations with China. A breakout above significant resistance levels could propel the AUD/USD pair further up, with the next key target around 0.6400. On the flip side, persisting US-China trade tensions represent a major threat to the AUD’s strength. Any rise in tariffs or geopolitical uncertainty can spark risk-off flows, making the Australian Dollar lose strength. Also, if Australian inflation weakens further and induces the Reserve Bank of Australia to turn dovish, the AUD may experience further pressure. A clear breakdown below the 0.6200 support may trigger further losses, which may push the pair towards the 0.6087 level, a level which was last hit in April 2020.

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AUD/USD Currencies

Australian Dollar Under Pressure: Soft Economic Data and Trade Tensions Weigh on AUD/USD

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  • February 27, 2025
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The Australian Dollar is under pressure today due to weak economic data, increasing US-China trade tensions, and a robust US Dollar. Australia’s Private Capital Expenditure fell unexpectedly, which caused concerns regarding economic growth, and the Reserve Bank of Australia continues to be guarded on rate cuts in the future. Global trade tensions, such as new US tariffs and China restrictions, provide additional downside risks to the AUD. Technicals are bearish and point to 0.6300 as the key support. But a change in market mood or weaker US economic data might prompt a short-term recovery. Traders will watch closely for economic releases and policy announcements for further guidance. KEY LOOKOUTS • The surprise 0.2% decline in Private Capital Expenditure and soft CPI readings add to doubts over the economic resilience and growth forecasts of Australia. • The USD remains on the rise amidst risk-off sentiment, fueled by robust economic performance, trade policy changes, and increasingly hawkish Fed tone. • Rising US-China tensions surrounding trade, tariff escalations, and heightened chip export restraints may additionally put more pressure on the Australian Dollar given the dependence of Australian trade on China. • AUD/USD retests key support at 0.6300. A failure can see it test 0.6087, whereas for recovery, it needs to breach resistance at 0.6329. The Australian Dollar remains pressured by dovish domestic economic indicators and a worsening US-China trade tensions risk souring sentiment in the markets. Australia’s Private Capital Expenditure decreased unexpectedly by 0.2% in Q4 2024, disappointing expectations of an 0.8% gain, while also failing to contain consumer inflation expectations. At the same time, the US Dollar keeps rising under risk-off sentiment, supported by economic strength and hardening trade measures in the Trump administration. As the AUD/USD currency pair is about 0.6300 support level, additional downside risks arise should trade war tensions escalate or risk mood turn negative. Traders look ahead to future economic releases and policy news for added guidance. The Australian Dollar depreciates as weak economic news and growing US-China trade tensions bear down on mood. The AUD/USD currency pair remains close to 0.6300 support, subject to downside pressures with a firm US Dollar. Market players watch for future policy changes and global economic trends for further guidance. • Australia’s Private Capital Expenditure fell by 0.2% in Q4 2024, marking below-forecast 0.8% growth, reflecting economic slowdown fears. • The USD is still strong as risk-off conditions prevail, fueled by a robust economy, hawkish Fed stance, and trade policy changes. • Heightened US-China trade tensions, such as more stringent tariff policy and the export restriction of chips, elevate uncertainty over the Australian Dollar. • The RBA recently slashed interest rates to 4.10% but is wary of further easing, with an eye on inflation and labor markets. • Being Australia’s top trading partner, any China slowdown or policy change, including monetary measures by PBOC, would impact the AUD. • AUD/USD is probing support at pivotal 0.6300, with a possibility of falling to 0.6087 if bearish pressure continues, while resistance is at 0.6329. • Risk aversion, geopolitical factors, and global economic trends will be key factors influencing AUD/USD’s short-term direction. The Australian Dollar is still under pressure as weak economic reports and rising trade tensions in the market generate uncertainty. Australia’s Private Capital Expenditure fell unexpectedly by 0.2% in Q4 2024, below forecasts, sending warning signs of weakening business spending. Furthermore, inflation reports were not up to expectations, displaying lingering economic woes. The Reserve Bank of Australia (RBA) has just lowered interest rates to 4.10% but is still wary of future monetary policy actions. RBA officials have noted that although inflationary pressures will ease, a robust labor market might sustain price growth, leaving future rate cuts in doubt. AUD/USD Daily Price Chart Chart Source: TradingView Global trade dynamics also contribute to the Australian Dollar’s woes, especially escalating tensions between the US and China. The Trump administration’s strategy to impose tariffs and limit chip exports to China may affect the economy of Australia because it has a robust trading relationship with China. In addition, the People’s Bank of China (PBOC) is actively pumping liquidity into the financial system, which can have an effect on market stability. With the changing global economic landscape, investors are keeping a close eye on how trade policies and central bank actions influence the prospects of the Australian economy and its currency. TECHNICAL ANALYSIS The AUD/USD pair is presently under immense bear pressure, with the price fluctuating around the psychological support of 0.6300. The pair is still below the nine- and 14-day Exponential Moving Averages (EMAs), which is a sign of diminishing short-term momentum. In addition, the 14-day Relative Strength Index (RSI) remains below 50, confirming the bearish perspective. Further breakdown below 0.6300 would take the pair to lower support levels, while recovery would need a strong break above the 14-day EMA at 0.6323 and the nine-day EMA at 0.6329 to resume bullish momentum. The traders will keenly watch these levels for trend reversals in the next few sessions. FORECAST The Australian Dollar remains under downside pressure with weak domestic economic statistics and external trade uncertainty bearing down on sentiment. If bearish pressures continue, AUD/USD may drop below the important 0.6300 support level with potential testing of lower levels around 0.6200 or even 0.6087 in the short term. Increased global trade deterioration, especially escalating US-China tensions, will put additional pressure on the currency. Furthermore, market unease regarding the Reserve Bank of Australia’s conservative approach to monetary easing could restrain investor sentiment, further contributing to the bearish pressure on the Australian Dollar. Conversely, if market sentiment turns optimistic, AUD/USD might experience a short-term bounce, especially if risk appetite picks up or US economic news disappoints, causing a weaker US Dollar. A breakout above near-term resistance levels of 0.6323 (14-day EMA) and 0.6329 (nine-day EMA) would indicate a possible recovery. If the bullish momentum picks up, the pair would try to recapture the recent high of 0.6408. But continued upside action will heavily rely on the improvement in Australian economic data

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AUD/USD Currencies

Australian Dollar Rises on China Stimulus and Fed Rate Cut Expectations as US Dollar Weakens

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  • February 24, 2025
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The Australian Dollar is gaining strength against a weakening US Dollar as a combination of global and domestic factors alters market sentiment. A strong Chinese government policy announcement for 2025, with plans for ambitious rural reforms and detailed rural revitalization plans, has lifted confidence in Australia, as China is its major trading partner. This is compounded by news of government-sponsored developers bidding up land prices in China, a sign of renewed economic activity in the region. Locally, the Reserve Bank of Australia’s recent reduction of the Official Cash Rate by 25 basis points—the first in four years—has aided the AUD’s rebound, while Governor Michele Bullock kept inflation pressures and the direction of future rate cuts firmly in check. KEY LOOKOUTS • Watch for China’s future policy cues and rural reform implementation, as successful implementation might continue to fuel land acquisitions and raise the AUD vs. the USD. • US economic data such as PMI readings and unemployment claims remain major drivers of the USD; substantial changes might redefine the AUD/USD path. • Watch the Reserve Bank of Australia’s policy cues and possible interest rate movements, as additional loosening can fuel domestic growth and support the AUD’s bullish trend. The Australian Dollar has registered a strong bounce on hopes about China’s 2025 policy statement, which features intentions on rural reforms and a revival of the beleaguered real estate market. On the other hand, the US Dollar has come under pressure in the wake of a string of disappointing economic data points, ranging from soft PMI readings and increasing jobless claims, further fueled by policy actions from President Trump to curb Chinese investments in strategic areas. Overall, the technical picture for the AUD/USD currency pair is still positive, with the currency trading inside an uptrending channel and receiving support close to major moving averages, suggesting potentially a prolonged bout of strength for the Australian Dollar. The Australian Dollar is strengthening against a weakening US Dollar, supported by China’s strong policy announcement for 2025 of rural reforms and a rejuvenated property market, while the US is hit by weak economic data and conflicting PMI readings. • China’s 2025 policy announcement outlining rural reforms and property market stimulus boosts Australian optimism, potentially strengthening the AUD due to profound bilateral trade links. • President Trump’s order to cap Chinese investments in major U.S. industries has introduced uncertainty, impacting investor sentiment and further weakening USD performance. • Reserve Bank of Australia’s 25 basis point rate reduction—the first in four years—indicates loosening policy, but officials warn that additional cuts are uncertain amidst inflation pressures. • Downbeat U.S. economic reports, such as mixed PMI readings and increasing jobless claims, continue to weigh on the USD, affecting the overall AUD/USD exchange rate dynamics. • Federal Reserve officials say that even with strong job growth, ongoing inflation worries could require additional policy action, which could see further rate cuts this year. • Escalating U.S. trade tensions, represented by tariffs against pharmaceuticals, semiconductors, and auto parts, may interfere with global supply chains and continue affecting currency fluctuations. • AUD/USD pair in an uptrending channel, enjoys robust support levels close to the key exponential moving averages and resistance at psychological zones. The Australian Dollar is being supported by upbeat economic indications flowing from China’s forward-looking policy statement in 2025. The announcement, which outlines expansive rural reforms and steps to revive the property sector, has increased confidence in Australia markets due to its deep trade relationship with China. Additionally, the Reserve Bank of Australia’s recent move to loosen monetary policy via a rate cut indicates attempts to stimulate domestic growth, further supporting the currency. AUD/USD Daily Price Chart Chart Source: TradingView In contrast, the US Dollar is under pressure in the context of muted economic data and conservative policy expectations. Weak economic data coupled with fresh curbs on Chinese investments have added to uncertainty, casting a shadow over the US economic upturn. These events highlight the persistent issues in the US economy, leading market participants to reassess future growth opportunities and the wider implications for global trade patterns. TECHNICAL ANALYSIS          AUD/USD pair is trading near 0.6370 within an ascending channel, indicating strong bullish momentum. The 14-day Relative Strength Index (RSI) remains above 50, suggesting sustained strength, while immediate support levels are evident at the nine-day and 14-day EMAs around 0.6347 and 0.6330, respectively. This is complemented by the lower channel boundary close to 0.6320, while resistance appears around the psychological 0.6400 level and the channel’s top at close to 0.6430, highlighting levels of importance to observe in case of possible trend resumption. FORECAST In the future, the Australian Dollar may continue to gain if favorable developments continue. Favorable policy actions from China to revive its rural and property markets may further fuel trade optimism between the two countries. Moreover, accommodative domestic monetary policies in Australia may further support investor confidence and attract capital inflows, setting the stage for a continued upward trend in the AUD. On the other hand, the AUD could be challenged if negative global or domestic conditions arise. Increased uncertainty from worsening US economic numbers or growing trade tensions would modify market sentiment and lead to a conservative reassessment of risk. Additionally, any change from expected policy developments in China or changes in Australia’s fiscal position could lead to a reversal of the currency’s recent advances, underlining the need to closely watch broader economic signs.

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Australian Dollar Gains Ground as US Dollar Weakens Ahead of Key Inflation Data
AUD/USD Currencies

Australian Dollar Gains Ground as US Dollar Weakens Ahead of Key Inflation Data

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  • January 15, 2025
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The strength gained recently by the Australian Dollar was partly driven by improved market sentiment, broad China trade data, and rising commodity prices. An additional factor for the AUD is the stabilizing momentum as created by Beijing regarding stabilizing the Yuan. On the contrary side, the US Dollar has declined following the December Producer Price Index that came way worse than expected. Thus, as a result of this, traders are now focusing on upcoming US inflation data regarding future market trends. Key Lookouts Consumer confidence in Australia’s Westpac Consumer Confidence Index slid by 0.7% in January. This continued the trend of pessimism, in part a response to the loss of AUD in value relative to the USD. Market pricing suggests a 67% probability of the RBA cutting the cash rate by 25 basis points in February, with cuts through to April. US NFP data reported an increase of 256K jobs in December; it was better than expected but did not produce the desired result as the mixed reaction in markets indicated. Here are the key developments influencing the Australian Dollar and US Dollar dynamics in the current market environment: Consumer confidence remains one concern in Australia. The Westpac Consumer Confidence Index fell by 0.7% in January, indicating that Australian households remain pessimistic. The decline in confidence is partly due to the depreciation of the AUD against the USD, which has caused concerns about the cost of living and economic conditions. Consequently, markets are factoring in a 67% chance of the Reserve Bank of Australia (RBA) to cut interest rates by 25 basis points in February and expect more cuts in April to sustain the economic activity. AUD/USD Daily Price Chart Source: TradingView, prepared by Jacob Although there have been difficulties for the consumer sentiment in Australia, risk sentiment from other parts of the world has given some boost to the AUD. Strong trade data from China and rising commodity prices have helped boost the outlook for Australia’s economy, which is heavily reliant on exports. Moreover, Beijing’s efforts to stabilize the Yuan have contributed to a more favorable environment for risk-sensitive currencies like the AUD. With positive global factors at play, the Australian Dollar is likely to remain supported but its movement would be largely related to the future economic data released from Australia as well as from the US. Technical Analysis The AUD/USD pair is still trading within a descending channel on the daily chart, at around 0.6190. The immediate resistance is found at the 9-day EMA at 0.6193, then at the 14-day EMA at 0.6207. The next resistance is seen near the upper boundary of the descending channel, at around 0.6220. Support may be tested near the lower boundary of the channel, at around 0.5940, if the bearish momentum continues. Support and Resistance Forecast Support for the AUD/USD remains at 0.5940, which aligns with the lower boundary of the descending channel. If this level is unable to hold as support, it may open a way for even more downside action, potentially moving towards 0.5900. A violation below 0.5940 would be very bearish in nature and allow for a breakdown to even weaker levels in the short term.The key resistance for the AUD/USD pair will be at 0.6193, with the 9-day Exponential Moving Average placed there, and at 0.6207, marked by the 14-day EMA. If the pair breaks above this level, it could test the upper boundary of the descending channel around 0.6220. A strong move beyond 0.6220 could signify a change in momentum, sending the pair further up to resistance zones around 0.6250 or 0.6300.

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