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AUD/USD Currencies

Australian Dollar Surges in US Dollar Weakness and RBA Rate Reduction in Spite of Economic Uncertainties

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  • May 21, 2025
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Australian Dollar (AUD) rallied against the US Dollar (USD) in spite of increasing hopes of increased rate cuts from the Reserve Bank of Australia (RBA). The US Dollar weakened in the wake of the US economic outlook uncertainty, falling business and consumer sentiments, and a recent credit rating downgrade of the US by Moody’s. The recent 25 basis point rate cut by the RBA was considered a preemptive measure to bolster economic confidence, and Australian political change and favorable employment figures also supported the AUD. Technicals indicate further strength for AUD/USD, as key resistance and support levels are monitored closely by traders. In contrast, global trade tensions and China’s mixed economic signals remain to drive market sentiment. KEY LOOKOUTS • Monitor additional Fed commentary and releases of economic data, as doubts about decelerating growth and trade policy issues are maintaining pressure on the US Dollar. • Monitor near-term RBA comments and actions, as Governor Bullock’s remarks suggest additional rate cuts may be forthcoming pending economic developments. • Keep an eye on the AUD/USD pair at the major technical levels — support at the nine-day EMA of 0.6426 and resistance near the six-month peak of 0.6515 — that would determine short- to medium-term direction. • US-China trade news and Chinese economic indicators, particularly retail sales and industrial production, are still key to risk sentiment and the outlook for the AUD. Market players must pay close attention to statements by Federal Reserve officials as well as coming US economic reports since fears of decelerating growth and trade policy ambiguity continue to drag on the US Dollar. Future Reserve Bank of Australia monetary policy actions, particularly any suggestions of additional rate reductions, will also be pivotal for the Australian Dollar’s direction. From a technical perspective, the AUD/USD pair’s movement around support at the nine-day EMA near 0.6426 and resistance at the six-month high of 0.6515 will likely dictate short- to medium-term momentum. Additionally, ongoing developments in US-China trade relations and China’s economic performance remain key factors influencing risk sentiment and the broader currency market outlook. Monitor Fed cues and US economic indicators as they keep pushing the US Dollar. Future RBA rate decisions and technical levels of 0.6426 and 0.6515 will dictate AUD/USD direction. US-China trade news and China’s economic indicators continue to be significant for market mood in the meantime. • The Australian Dollar (AUD) rallied despite ongoing predictions of additional Reserve Bank of Australia (RBA) rate cuts. •   The US Dollar (USD) lost ground as fears of slower US economic growth and falling business and consumer confidence took its toll. •  Moody’s reduced the US credit rating, putting further pressure on the USD as federal debt forecasts rose. •  The RBA lowered its Official Cash Rate by 25 basis points, calling it a preemptive action to enhance economic optimism. •  Australian political turmoil and robust employment rates sustained the AUD’s strength. •  Technical analysis indicates AUD/USD is trading above major moving averages, with resistance at 0.6515 and support at 0.6426. •  Persistent US-China trade tensions and China’s mixed economic reports continue to dictate risk sentiment and currency trends. The Australian Dollar has remained resilient against a tough global economic environment, appreciating as worries mount about the economic prospects of the US. Federal Reserve officials have pointed to weakening consumer and business sentiment, driven in part by uncertainty around US trade policy and persistent geopolitical tensions. Moody’s recent credit rating downgrade of the US also reduced optimism regarding the US Dollar, as climbing federal debt and budget deficits create long-term concerns. At the same time, China’s rebuke of US trade restrictions and its uneven economic readings contribute to the multifaceted global trade landscape, shaping investor outlook. AUD/USD DAILY PRICE CHART CHART SOURCE: TradingView In Australia, the recent 25 basis point rate cut by the Reserve Bank was presented as a preemptive move to enhance confidence and respond to prevailing economic conditions. RBA Governor Michele Bullock highlighted that the bank stands prepared to make additional action if necessary to control inflation and drive growth. Political developments in Australia, as well as better-than-anticipated jobs data, have also seen a positive domestic environment contribute to a strengthened Australian Dollar despite broader worldwide uncertainty and changing trade tensions. TECHNICAL ANALYSIS AUD/USD currency pair is indicating sustained bullish momentum as it continues to trade above significant moving averages, and this suggests that there is bullish sentiment among the traders. The pair is receiving support close to the nine-day Exponential Moving Average (EMA), and this is serving as a short-term support, whereas resistance points around near-term highs are being monitored closely for possible breakouts. Momentum gauges, including the Relative Strength Index (RSI), are still higher above neutral ground, indicating that buyers are in control right now. But a firm break below these support points may indicate a change in momentum and higher risks of decline in the near term. FORECAST The Australian Dollar may continue to strengthen if the US Dollar continues to be under pressure due to ongoing economic issues and dovish Federal Reserve hints. US-China trade negotiation positives or more-than-anticipated economic news from Australia, like jobs or inflation data, might support investor sentiment in the AUD. Moreover, if the RBA telegraphs a rate cut halt or suggests stabilizing monetary policy, it might support the currency’s bullish momentum and drive the AUD/USD currency pair towards recent resistance levels. On the negative side, heightened concerns on the global economic outlook or rising geopolitical tensions might deter the Australian Dollar, considering its risk sensitivity. If the RBA hints at more forceful rate reductions amid softer local growth or weakening inflation data, the AUD might lose ground. In addition, any weakening of US-China trade relations or Chinese economic data that is less than expected would temper demand for risk-sensitive currencies such as the AUD, and cause a pullback to major support levels.

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Currencies

USD/CAD Maintains Price Above 1.4300: Market Awaits Fed Powell Testimonies Despite Escalation of Tariffs

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  • February 11, 2025
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USD/CAD is currently trading above 1.4300, consolidating as investors await Fed Jerome Powell’s testifying for future interest rate policies. The Fed kept its key rates unchanged at 4.25%-4.50%, with no cuts expected in 2025. In the meantime, the 25% tariffs of Trump on steel and aluminum create pressure on the Canadian economy, making the outlook for the CAD bearish. Market participants also keep an eye on US CPI data for further direction. Technical indicators remain sideways, while resistance is present at 1.4380 and the pair may rise as high as 1.4500. Support below 1.4270 could push prices lower. KEY LOOKOUTS • Investors await Powell’s speech to know whether the Fed is going to extend its interest rates at 4.25%-4.50% in 2025 or not. • 25% tariffs on steel and aluminum may weigh heavily on the Canadian economy, bringing a bearish trend for CAD/USD. • Tocky Wednesday, Consumer Price Index (CPI) data will be out. This will impact market sentiment and further provide cues about inflationary trends affecting Fed policy. • The upside would be further possible only if the USD/CAD breaks above 1.4380. If it drops below 1.4270, a deeper correction can be witnessed. Wednesday’s Fed testimony by Chair Jerome Powell and the subsequent silent of interest rate policy keep the USD/CAD under the spotlight, with investors watching carefully for further clues. Since the Fed has held rates at 4.25%-4.50%, it is of immense interest to see if cuts are delayed until the end of 2025. Meanwhile, tariffs imposed by Trump on steel and aluminum at 25% are going to devastate Canada and will continue to reinforce a bearish view of the CAD. The US CPI data is going to be an important driver for expectations around inflation and monetary policy. Tactically, key resistance is seen at 1.4380. A clear break above here should send prices higher, while any move below 1.4270 should put support at risk and ideally could see a stronger fall. The USD/CAD pair still trades above the 1.4300 line as investors keep an eye out for Fed Chair Powell’s testimonial for key interest rate policies. The announcement of 25% tariffs imposed by Trump on steel and aluminum is weighing against the Canadian Dollar, while positive US CPI later in the session will have enough influence on sentiment. Key level to watch up: 1.4380. Key level to watch downside: 1.4270 • The pair remains steady pending key economic events. • Traders look for signals on how long the Fed will keep rates at 4.25%-4.50%. • The Canadian economy faces pressure as the U.S. imposes tariffs on steel and aluminum. • The inflation report on Wednesday could influence future Fed policy decisions. • Investors remain uncertain, leading to a tight trading range of 1.4270-1.4380. • A breakout above this level could push USD/CAD toward 1.4500. • A break below might push the price lower to 1.4195 and then to 1.4120. The USD/CAD is still trading flat above 1.4300, as traders are waiting for Fed Chair Jerome Powell to testify before Congress. Market participants are looking for clues on how long the Federal Reserve will keep interest rates at 4.25%-4.50%, with many analysts expecting no rate cuts in 2025. Concerns over Trump’s 25% tariffs on steel and aluminum continue to weigh on the Canadian economy, as Canada is the largest exporter of aluminum to the United States. Such levies may mean higher inflation rates in the US, and by extension, that the Fed must continue its existing monetary policy much longer. USD/CAD Daily Price Chart TradingView Prepared by ELLYANA USD/CAD is trading between 1.4270 and 1.4380; 1.4380 serves as a pivotal resistance point for the pair. A breakout above this could take the pair towards 1.4500, whereas a push below 1.4270 could lead to more losses toward 1.4195 and 1.4120. Another event that markets are eagerly awaiting is the U.S. Consumer Price Index (CPI) data scheduled on Wednesday; this will have considerable ramifications in shifting market sentiment and increasing demand for USD. With various economic and political factors present, the outcome of the USD/CAD seems uncertain, but Powell’s testimonial and then the CPI to be released shall be the primary drivers for a future price shift. TECHNICAL ANALYSIS In the USD/CAD, consolidation is seen over a tight band of 1.4270-1.4380 due to the scheduled economic events; the 50-period Exponential Moving Average has been seen resisting the upside trend at around 1.4365. Meanwhile, the 14-period Relative Strength Index (RSI) is in the 40.00-60.00 area, showing a neutral to sideways trend. A break above 1.4380 would be likely to push the pair to the round-level resistance of 1.4500, and then to the January 30 high of 1.4600. A break below 1.4270 could be seen as a trigger for further losses down to the December 10 high of 1.4195 and then to the December 11 low of 1.4120. Traders will watch for the volumes to build and confirmation signs before making a directional bet. FORECAST Should USD/CAD break out of the resistance line at 1.4380, further gains could occur for the currency, and that’s towards round number resistance 1.4500. An increased breakout through the latter would lead the currency pair to move further to January 30 highs at 1.4600 with the boost in positive economic numbers from the US or more hawkish speeches by Fed Chairman Powell. Additionally, sustained inflationary concerns in the U.S., potentially fueled by Trump’s 25% tariffs, could lead to higher USD demand, reinforcing the pair’s upward trajectory. If the Fed delays rate cuts throughout 2025, the U.S. dollar may strengthen further, keeping USD/CAD in an uptrend. On the downside, if USD/CAD goes below the February 5 low of 1.4270, it might reflect increased bearish pressure that could drag the pair toward the December 10 high of 1.4195. Further below this level, it would open the door for a possible dip toward the December 11 low of 1.4120. Any signs of a softer U.S. Release of CPI data or dovish comment from Powell will weaken USD; hence the

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AUD/USD Currencies

AUD/USD Struggles Below 0.6300: Market Uncertainty and Technical Signals Shape the Outlook

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  • February 11, 2025
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The AUD/USD pair continues trading in a tight range below the 0.6300 mark, unable to gain upward momentum amid expectations for an RBA rate cut and escalating US-China trade tensions. A stronger US Dollar, bolstered by fears that potential Trump tariffs could be inflationary and keep the Federal Reserve’s hawkish stance, weighs on the Australian Dollar. The advance, however, faces technical issues, with the prices finding support above the 50-day SMA and oscillators turning positive. However, a decisive break above 0.6300 would confirm a bullish reversal, targeting 0.6365, 0.6400, and 0.6455. On the contrary, a break and failure to sustain support at 0.6235 might trigger further decline to 0.6140, 0.6085, and eventually to the psychological level of 0.6000, hence sustaining the downtrend. KEY LOOKOUTS • The market will then gain a lot of buying pressure above 0.6300 and drive up towards 0.6365, 0.6400, and 0.6455, as the bullish breakout takes place. • The on-going prospects of an RBA rate cut next week still weigh down the Aussie even when technical levels were widely signaling a recovery. • Geopolitical uncertainty and increased trade war tensions between the U.S. and China are the primary headwinds for AUD, stopping it from moving higher. • A stronger US Dollar, coupled with potential Trump tariffs and inflation concerns, will keep the Federal Reserve hawkish, thus further capping upside in the AUD/USD pair. AUD/USD continues trading in a tight range below 0.6300 as a variety of factors continue to affect the movement. Expectations for a RBA rate cut, as well as US-China trade tensions, are weighing on the Australian Dollar, thus capping its upside potential. Meanwhile, a stronger USD, which is driven by concerns over Trump’s trade tariffs and their impact on inflation, is keeping the Federal Reserve’s hawkish stance intact. From a technical perspective, a decisive break above 0.6300 could trigger fresh buying interest, pushing the pair towards 0.6365, 0.6400, and 0.6455. But if support at 0.6235 fails to hold, then the AUD/USD may be seen further lower towards 0.6140, 0.6085, and the psychological 0.6000 level, thus continuing the bearish trend. The AUD/USD pair is struggling below 0.6300, driven down by RBA rate cut bets, US-China trade tensions, and a stronger USD. A break above 0.6300 will reportedly indicate recovery to 0.6365 and 0.6400, while a failure to hold 0.6235 support will push it down to 0.6140 and 0.6000. • The pair remains stuck in a tight trading range and struggles to pick up pace due to its uncertain economic and geopolitical background. • It is expected to continue hammering and attracting down the Australian Dollar amid speculations of an upcoming RBA rate cut. • The Aussie is under stress as trade tensions continue to hot up between the US and China, not allowing it to break out into key resistance levels. • Better still, the USD has firmed further due to the expectation that potential Trump tariffs may boost inflation and keep the Federal Reserve hawkish. • Additional gains above 0.6300 are required to confirm upward momentum; if so, targets are at 0.6365, 0.6400, and 0.6455. •  Further weakness towards 0.6140 and then down to 0.6085 and then 0.6000 is possible if AUD/USD does not hold onto any strength above 0.6235. • The 50-day SMA and improving oscillators suggest a possible bullish reversal, but confirmation is needed above 0.6300. The AUD/USD pair remains trapped below the 0.6300 mark, struggling to gain any meaningful traction amid a mix of fundamental and technical factors. RBA rate cut expectations continue to pressure the Australian Dollar, as investors anticipate a potential policy easing next week. Furthermore, rising US-China trade tensions remain a significant headwind and keep the Aussie under pressure. In addition, a stronger US Dollar, due to the belief that Trump’s proposed trade tariffs could push inflation and strengthen the Federal Reserve’s hawkish policy, limits further upside for AUD/USD. AUD/USD Daily Price Chart TradingView Prepared by ELLYANA The AUD/USD pair continues to trade in a very tight range, with resistance near 0.6300 as investors weigh the impact of RBA rate cut speculation and US-China trade tensions. A stronger US Dollar, supported by expectations of a hawkish Fed stance, adds further pressure on the Aussie, limiting any meaningful upside. Technically, the pair is trading above its 50-day SMA. This means it has a chance of breaking out on the upside if it clears 0.6300. The targets for this are at 0.6365 and 0.6400. TECHNICAL ANALYSIS The AUD/USD pair is currently consolidating above its 50-day Simple Moving Average (SMA). This is an indication that momentum may be changing. The oscillators on the daily chart are showing positive traction. The pair might see a bullish breakout if it sustains above the 0.6300 resistance level. A successful breach of this key level might send the pair toward 0.6365, 0.6400, and the 100-day SMA near 0.6455. Failure to break higher may invite renewed selling pressure, with 0.6235 acting as immediate support. A drop below this level will speed up the downtrend to 0.6140, 0.6085 and the psychological mark of 0.6000. Traders should be focusing on these important levels for the confirmation of a major price movement. FORECAST AUD/USD pair might break out positively if it succeeds in staying above the resistance point of 0.6300. A decisive break below this important level would confirm a bullish reversal, with possible targets at 0.6365 and 0.6400, followed by the 100-day SMA near 0.6455. Technical indicators, including oscillators gaining positive momentum, suggest that buying pressure could increase if the pair remains above its 50-day SMA. Any positive risk-aversion environment or easing US-China trade tension would further increase the Aussie price and push the pair to much higher levels. AUD/USD fails to sustain above 0.6300, it can attract fresh sellings, pulling the pair south. The short-term support now lies at 0.6235. Break below this, and the downtrend could proceed towards 0.6140 and 0.6085. A stronger US Dollar, driven by hawkish Fed expectations and potential Trump tariffs, may continue to cap the Aussie’s gains. Additionally, growing concerns over an RBA rate cut could

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