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AUD/USD Currencies

Australian Dollar Strengths on US-China Trade Tensions and Critical Economic Data on the Horizon

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  • May 13, 2025
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Australian Dollar (AUD) has gained strength against the US Dollar (USD) after a bounce back in Australia’s Westpac Consumer Confidence Index, which climbed 2.2% in May after plummeting the month before. This follows as the US Dollar comes under pressure prior to the announcement of the US Consumer Price Index (CPI) for April. Market sentiment for a less hawkish approach by the Federal Reserve, along with the easing of trade tensions between the US and China, has resulted in the AUD/USD pair’s recovery. But even as the pair experienced such positive momentum, technical indicators lean towards a bearish forecast for the pair, with important support levels looming ahead, reflecting the continued uncertainty in global trade flows and domestic policy. KEY LOOKOUTS •  The advance US Consumer Price Index (CPI) for April will play a significant role in determining market sentiment regarding upcoming Federal Reserve policy. Economists expect an inflation rebound, and it may have an impact on the US Dollar, thereby influencing the AUD/USD exchange rate. • The continuing trade negotiations between China and the US continue to be a key driver. While there has been a tentative deal to lower tariffs, any developments in these negotiations or comments by US officials could affect global market mood and the AUD. •  With prospects for the RBA to lower rates in the near future, market players need to carefully observe any shift in RBA communication or announcements, especially at its next policy meeting, which could make a difference to the strength of the AUD. • Continuous indicators from large economies, such as China’s deteriorating CPI and PPI levels, and Australia’s Ai Group Industry Index, will give the world economic landscape and influence trade-sensitive currency sentiment such as that of the AUD. With the Australian Dollar strengthening against the US Dollar, market sentiment is influenced by a number of key determinants. The upcoming US Consumer Price Index (CPI) report for April will be pivotal, with inflation expectations potentially influencing Federal Reserve policy decisions and the USD’s direction. Trade talks between the US and China, particularly the reduction of tariffs, are another major focus, as any changes in this relationship could significantly impact global market dynamics and the AUD. Also adding to the volatility in the AUD/USD exchange rate is the expectation of a cut in interest rates by the Reserve Bank of Australia (RBA) in the coming short term. With worldwide economic data, such as the slowing down of China’s CPI and PPI figures, also fuelling the uncertainty, market observers need to remain on their toes for any news that will trigger further Aussie dollar volatility. Australian Dollar has strengthened versus the US Dollar, backed by encouraging news out of Australia and a de-escalation of US-China tensions. Key observations to keep in mind include the forthcoming US CPI report, whether Federal Reserve policy will shift, and Reserve Bank of Australia interest rate moves, all of which may have a bearing on the direction of AUD. • The AUD has appreciated against the US Dollar on the back of strong Australian economic data and increasing consumer confidence. • The US Consumer Price Index (CPI) for April is due out soon and has the potential to influence significantly market expectations around the Federal Reserve’s next steps regarding interest rates. • An initial US-China trade agreement that lowers tariffs would lower global trade tensions and could impact market sentiment. • As inflation and unemployment worries persist, the Federal Reserve policy direction will continue to be a dominant force in determining the strength of the US Dollar. • Expectations are building for the RBA to lower interest rates in its next meeting, which would drag on the AUD. • Chinese data, a third month of CPI fall in a row, indicates continued economic weakness that can affect the wider market. • The AUD/USD currency pair is probing significant technical levels, with support at the 50-day EMA and resistance at the nine-day EMA, indicating possible price volatility. Australian Dollar (AUD) has remained strong against the US Dollar (USD) on the back of a positive change in consumer sentiment in Australia, as indicated by the rebound in the Westpac Consumer Confidence Index. This is at a time when relaxing trade tensions between the US and China have also given a boost to confidence in global markets. The initial trade agreement, which features tariff reduction, portends stability in trade between the two global economic powerhouses, a development important to Australia as much as it would be to the United States, given its robust bilateral economic relations with China. AUD/USD DAILY PRICE CHART CHART SOURCE: TradingView In the near term, market participants are looking to the next US Consumer Price Index (CPI) report for April, which may bring more clarity to inflation trends and have implications for future Federal Reserve policy. Furthermore, hopes for the Reserve Bank of Australia to cut interest rates in the near term are creating a degree of uncertainty around the Australian Dollar’s outlook. As more economic data from across the globe pours in, led by China, these events will be instrumental in determining market mood and guiding the movements of the AUD. TECHNICAL ANALYSIS AUD/USD currency pair has been experiencing some resistance at around the 0.6400 level, with it trading just above the nine-day Exponential Moving Average (EMA). Despite the recent rally, the pair is still trading below this near-term moving average, which means that the trend is bearish. The 14-day Relative Strength Index (RSI) has also fallen below the neutral 50 level, adding to the bearish sentiment. The key support is at the 50-day EMA level of 0.6344, and a fall below this level may indicate further downside potential. But if the pair can break above the 0.6400 resistance level, it may test the six-month high of 0.6515, indicating a possible change in momentum. FORECAST Australian Dollar (AUD) continues to be supported by upbeat economic data and the de-escalation of global trade tensions, the AUD/USD currency pair may extend its gains. A breakout

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Currencies EUR/USD

EUR/USD Falls as ECB Reduces Rates in Face of Global Trade News and Market Volatility

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  • April 17, 2025
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The EUR/USD currency pair experienced fresh selling pressure, declining back to 1.1340 following the European Central Bank (ECB) decision to make a widely expected 25 basis point cut in rates — its sixth successive reduction — as part of its ongoing campaign to nudge inflation back towards the 2% goal in the face of a weakening Eurozone economy. The ECB’s move, along with its deletion of previous language indicating interest rates are still restrictive, hints at a possible end to the easing cycle. In the meantime, optimism about U.S.-Japan trade talks gave the U.S. Dollar a boost, while doubts over U.S.-China trade ties and Federal Reserve Chairman Jerome Powell’s dovish economic outlook kept global markets on edge. In spite of the near-term retreat, EUR/USD still has a bullish technical setup, with the next significant resistance seen at 1.1500. KEY LOOKOUTS • The European Central Bank cut its key lending rates by 25 basis points but importantly avoided saying that rates will continue to be “restrictive” — suggesting that it might be ready to end its easing cycle as inflation trends improve. • Encouraging developments in trade talks between Japan and the U.S., which were highlighted by President Trump, relieved the U.S. Dollar and dampened EUR/USD recovery efforts. • Investors are looking forward to ECB President Christine Lagarde’s comments for greater insights into the central bank’s future policy direction, particularly how the continued global trade tensions affect it. •  As EUR/USD dipped below 1.1340, technical metrics such as the 14-day RSI holding above 70 and more sloping EMAs indicate the pair’s wider bullish trend is intact. The EUR/USD pair fell under renewed selling pressure, moving towards 1.1340 after the European Central Bank (ECB) declared a widely anticipated 25 basis point rate cut, its sixth in a row since the beginning of its easing cycle. The ECB’s decision reflects its ongoing efforts to tame inflation and support a slowing Eurozone economy, though the omission of any reference to rates remaining “restrictive” suggests policymakers may be eyeing a temporary pause. Meanwhile, the U.S. Dollar regained strength on the back of positive progress in U.S.-Japan trade negotiations, offering some relief to global markets amid persistent uncertainty over U.S.-China trade relations. Even with the ongoing correction, the EUR/USD pair still has a generally bullish outlook, with investors waiting anxiously for further guidance from ECB President Christine Lagarde’s next comments. EUR/USD continued to decline towards 1.1340 after the ECB trimmed interest rates by 25 basis points, as anticipated, indicating a possible end to its easing cycle. The U.S. Dollar strengthened amid positive U.S.-Japan trade news, further putting pressure on the pair. Investors now look to ECB President Lagarde’s remarks for new policy guidance. •  The European Central Bank cut its main borrowing costs as expected, its sixth consecutive reduction in response to softening Eurozone growth and cooling inflation. •  The EUR/USD currency pair fell towards 1.1340 following the rate decision, with strong selling pressure during early North American trading hours. •  For the first time in months, the ECB left out the word indicating interest rates are “restrictive,” which may indicate a possible halt to its rate-cutting cycle. •  Encouraging news from U.S.-Japan trade negotiations, led by President Trump’s announcement of “big progress,” brought relief to the U.S. Dollar. •   Markets are looking to ECB President Christine Lagarde’s comments for insight into future policy direction, particularly in the context of global trade uncertainty. •  In spite of the recent decline, the EUR/USD currency pair maintains a bullish setup with the support of higher sloping EMAs and the RSI remaining above the 70 level. •  Continued uncertainty regarding U.S.-China trade tensions continues to overshadow market sentiment, keeping traders defensive in the short term. The European Central Bank (ECB) announced yet another 25 basis point cut in interest rates, its sixth consecutive rate reduction since initiating its monetary easing cycle in June. The move is an extension of the ECB’s continued bid to stabilize the Eurozone economy as inflation makes slow progress towards its 2% target. Notably, the central bank did not reproduce its standard line that interest rates would continue to be “restrictive,” implying policymakers may be weighing a pause in additional reductions. The ECB reiterated that future policy will be “data-dependent” and influenced by the current global economic situation, specifically the uncertainty of international trade patterns. EUR/USD DAILY PRICE CHART CHART SOURCE: TradingView Meanwhile, international market focus has turned to developments in negotiations of trade talks between the United States and Japan. Favorable comments from both parties indicate better ties, providing a breath of relief for international markets that have been under pressure from tariff tensions. As the U.S.-Japan talks are progressing, however, general anxiety over the U.S.-China trade war remains, causing businesses and investors to remain guarded. As policymakers around the world adjust to these rapidly changing circumstances, market players are monitoring closely for any indication of how governments and central banks will act to protect economic stability. TECHNICAL ANALYSIS EUR/USD currency pair is undergoing a good correction after unable to maintain its momentum above the 1.1400 mark. Even after the correction, the overall trend is bullish since the price continues to trade above the major short-to-long-term Exponential Moving Averages (EMAs), indicating underlying strength. Furthermore, the 14-day Relative Strength Index (RSI) continues to remain above the 70 level, indicating that bullish momentum remains in place, though marginally overheated in the near term. Traders are currently monitoring the psychological resistance level of 1.1500, which is still a critical upside target, while the April 11 low around 1.1190 acts as a robust support level, likely to be bought if the correction worsens. FORECAST EUR/USD continues to be bullish provided the pair remains above critical technical support levels. The steepening slope of the Exponential Moving Averages (EMAs) and the Relative Strength Index (RSI) remaining above the 70 level indicate solid underlying buying demand. If the pair picks up momentum, the first target would be the psychological resistance at 1.1400, and a clear break above this level could

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AUD/USD Currencies

Australian Dollar Falls in Face of Trade Tensions and China Deflation Fears Amid Consumer Confidence Bounce

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  • March 11, 2025
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The Australian Dollar continues to fall against the US Dollar, burdened by rising global trade tensions and worsening deflationary fears in China—Australia’s biggest trading partner. Even with a big bounce in Westpac Consumer Confidence to a three-year high, fueled by recent interest rate reductions and softening living expenses, the AUD can’t find its footing. Stagnated US-China trade talks, counter-tariffs, and waning Chinese demand have weighed on sentiment, as weaker US employment data and fears of recession further clouded the wider picture. With investors expecting crucial inflation reads and other direction from central banks, the AUD/USD continues to be battered, trading around multi-week lows. KEY LOOKOUTS • Markets watch intently for the Reserve Bank of Australia’s next step, particularly after robust numbers trimmed expectations of further rate easing. • Continuing deadlock in US-China trade negotiations and fresh retaliatory tariffs continue to influence Australian market sentiment and global risk appetite. • Accelerating deflationary pressure in China is a significant threat to Australia’s export-oriented economy, particularly in the context of slowing consumer demand after Spring Festival. • Market participants are waiting for US inflation figures, which would potentially affect Federal Reserve policy expectations and propel short-term AUD/USD movements. The Australian Dollar continues to come under pressure as rising global trade tensions and China’s worsening deflation feed fears about Australia’s economic prospects. Amid a significant rise in consumer sentiment—reflected in Westpac’s Consumer Confidence Index hitting a three-year high—the external headwinds continue to dominate local optimism. The US-China trade impasse extended over time, joined by retaliatory tariffs and waning demand in China, has quashed investor sentiment and risk appetite. At the same time, technical indicators point to bearish momentum for AUD/USD, with investors looking for significant US inflation data and further information about the Reserve Bank of Australia’s monetary policy direction. The Australian Dollar remains under pressure even after consumer confidence rose, as global trade tensions and deflation concerns in China act as a dampener for sentiment. US-China negotiations’ stalemate and declining risk appetite keep the AUD/USD pair around multi-week lows. • Australian Dollar continues to be under pressure as a result of escalating global trade tensions and China’s increasing deflation worries. • Westpac Consumer Confidence jumped 4% in March, a three-year high, driven by interest rate reductions and softening living expenses. • US-China trade talks continue to be at an impasse, with retaliatory tariffs further weighing on market sentiment and affecting Australia’s export-oriented economy. • Deflation in China indicates poor domestic demand, which threatens Australian exports and general economic prospects. • Uncertainty around the US economy continues, with poor jobs numbers and recession worries driving global currency flows. • RBA remains cautious in its policy, and recent economic news has lowered the expectation of further rate cuts. • Market players wait for the next US inflation figures, which may influence future Federal Reserve policies and affect the AUD/USD exchange rate. The Australian Dollar is strained as global trade tensions escalate and economic uncertainty rises, driven particularly by increasing deflation fears in China—Australia’s biggest trading partner. While consumer sentiment improved significantly, with Westpac Consumer Confidence reaching a three-year high, overall market sentiment remains cautious. The Reserve Bank of Australia’s recent rate cut and alleviation of cost-of-living pressures have improved domestic optimism, but external threats continue to loom over local economic gains. AUD/USD Daily Price Chart Chart Source: TradingView Impeded US-China trade talks and retaliatory tariffs are driving fears of a weakening global demand, which directly affects Australia’s trade-dependent economy. In the background, political events and soft US job data are influencing expectations for future economic policy. As investors continue to keep an eye on future inflation data and central bank cues, the Australian Dollar’s performance will tend to be guided by these changing global dynamics. TECHNICAL ANALYSIS Australian Dollar is exhibiting signs of ongoing weakness versus the US Dollar, with the AUD/USD pair trading around significant support levels. The pair has fallen below the nine-day Exponential Moving Average (EMA), which signals bearish short-term momentum. Moreover, the 14-day Relative Strength Index (RSI) has dipped below the neutral 50 level, indicating mounting selling pressure. If the downtrend continues, the pair would test lower support levels, while recovery would demand a persistent break above the near-term resistance zones to turn sentiment again in the bullish direction. FORECAST In the event that global sentiment is improving and US-China trade tensions abate, the Australian Dollar would recover, particularly if China’s economic data begin to stabilize. A flip in commodity demand to the positive or an unexpected pick-up in China’s inflation rates can drive Australia’s export economy, potentially pushing the AUD higher. Furthermore, if the Reserve Bank of Australia continues its dovish but accommodative policy without additional rate cuts, this should reinforce investor confidence and support a modest recovery in the currency. But the risks on the downside are also considerable. Ongoing trade uncertainty, ongoing deflationary pressures in China, or additional escalation in global tariff tensions would bear down on the Australian Dollar. If future US inflation numbers bolster the argument for the Federal Reserve to keep or postpone rate cuts, the US Dollar could gain further traction, putting further pressure on the AUD. In addition, any fresh weakness in Australian economic data or a turn towards more dovish RBA commentary may speed the currency’s decline in the near term.

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Currencies EUR/USD

EUR/USD Rises on Hopes of Ukraine Peace, but ECB Policy and Tariff War Risks Lurk

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  • March 4, 2025
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EUR/USD keeps rising towards the 1.0500 level on hopes of a possible Ukraine peace agreement. Yet, the pair’s rally is capped by increased global risk aversion amid heightened trade tensions. US President Donald Trump has increased tariffs on Chinese imports to 20%, and Canada and China have responded with retaliatory actions. Moreover, the US has suspended all military assistance to Ukraine, further adding to geopolitical volatility. In the meantime, the Euro can expect additional pressure before the European Central Bank (ECB) meeting, when a widely anticipated rate cut can weigh on the currency. Sidelined US economic data have also added to market uncertainty, leaving traders hesitant to bet on the near-term outlook of the Euro. KEY LOOKOUTS • Optimism regarding a formal Ukraine peace plan is supportive of EUR/USD, but uncertainty prevails as the US suspends military aid to Ukraine. • Trump’s China tariff increases and possible retaliatory actions by Canada and China may spark risk aversion, capping the Euro’s upside potential. • The European Central Bank will likely reduce rates again, which may put pressure on the Euro and affect EUR/USD’s short-term direction. • Disagreement on US manufacturing data contributes to market uncertainty, making investors wary of the Federal Reserve’s next step and dollar strength. EUR/USD is still in the spotlight as hopes for a Ukraine peace agreement offer support, but rising global trade tensions and policy risks cap further advances. The US has suspended all military aid to Ukraine at the direction of President Trump, contributing to geopolitical uncertainty. While Trump’s move to increase tariffs on Chinese imports to 20% has prompted threat of retaliation from Canada and China, it is adding to risk aversion. The European Central Bank meeting also looms as a major trigger, with an expected rate cut that can depreciate the Euro. Also, conflicting US economic data have put investors in confusion regarding the direction of Federal Reserve policy, which is keeping the currency market nervous. EUR/USD rises on optimism for Ukraine peace agreement but tests resistance as global risk aversion increases. A further escalation in US-China trade tensions and the anticipated ECB rate cut may act as a dampener for the Euro. Heterogeneous US economic data brings more uncertainty to the table, maintaining market mood cautious. • The pair extends its rally at 1.0500 with support from hope for a Ukraine peace agreement. • The US suspended all military aid to Ukraine, further fuelling world tensions and market conservatism. • Trump increases tariffs on Chinese imports to 20%, inviting retaliatory threats from Canada and China, elevating risk aversion. • The European Central Bank will likely lower the Deposit Facility Rate by 25 bps, possibly putting pressure on the Euro. • Conflicting US economic indicators, such as a softer ISM Manufacturing PMI and a firmer S&P Global PMI, contribute to investor uncertainty. • Risk sentiment and policy issues may limit further gains in the Euro despite recent rallies. • Ongoing uncertainty regarding the Federal Reserve’s policy path keeps traders on their toes, influencing EUR/USD price action. Global markets are in suspense as geopolitical tensions and trade conflicts define the economic environment. Hopes for a formal Ukraine peace agreement have arisen, with European leaders and Ukrainian President Volodymyr Zelenskyy negotiating a plan to be presented to the US. However, doubts intensified as the US government suspended all military assistance to Ukraine, fuelling fears over long-term stability in the region. Meanwhile, trade tensions between economies increased, with President Trump increasing tariffs on Chinese goods, and China strongly opposing, with possible retaliatory measures from Canada. These events underscore the increasing polarization in global relations, impacting investor sentiment and economic policies across the globe. EUR/USD Daily Price Chart Chart Source: TradingView On the economic side, policymakers and market players are keeping a close eye on the European Central Bank’s next meeting, where a possible rate cut is anticipated. Such monetary policy has a significant impact on financial planning and world economic growth. In the US, meanwhile, conflicting economic data have contributed to the uncertainty, with varying indicators of manufacturing performance capturing the difficulty of sustaining stability in a volatile environment. While global economies ride this ride, companies and governments have to be flexible to changing economic circumstances and global policy measures. TECHNICAL ANALYSIS EUR/USD is stuck around 1.0500, with risk aversion cappping its upside. The pair has been on the verge of consolidation, with market players keenly observing key resistances and supports for signs of a breakout. Moving averages are bearish, while momentum indicators such as the RSI and MACD are indicative of indecisiveness in market sentiment. A break above near-term resistance could set the stage for additional gains, while inability to maintain key support levels could prompt a pullback. Technical signals overall point to EUR/USD being in a precarious area, waiting for a more robust catalyst for directional momentum. FORECAST EUR/USD may rise further if sentiment towards the Ukraine peace agreement gets a boost, which would enhance market risk appetite. A diplomatic settlement would alleviate geopolitical risk, potentially strengthening the Euro. Also, if economic statistics from the Eurozone are stronger than anticipated or the European Central Bank (ECB) is less dovish than anticipated, the pair could get further backing. Any US dollar weakness caused by changing Federal Reserve policy or weaker economic data would also provide space for a move upwards. A move above major resistance levels might drive the pair to higher price ranges in the near future. EUR/USD is subject to several downside threats that would limit its momentum. Increased risk aversion as a result of rising trade tensions—like Trump’s raised tariffs on China and possible retaliations from Canada and China—may support the US dollar, which would bear down on the Euro. If the ECB acts on a highly anticipated rate cut or hints at more monetary easing, the Euro could fall as well. Any better-than-expected US economic data would be supportive of the dollar’s advance, which would see the pair fall. A breakdown of crucial support levels could lead to more losses, leaving

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