The AUD/USD rose by 0.35% to 0.6270 on Tuesday, marking its fourth consecutive day of gains. The pair drew support from a slight downtick in the US Dollar amid uncertainty surrounding US-China trade relations and tariff policies. However, the prospects of slower Federal Reserve rate cuts and elevated US Treasury yields continue to limit the Aussie’s upside potential. Following strong US data, the pair retreated and market now await inflation data from Australia to be released on Wednesday’s Asian session.

Fundamental overview

The Aussie trims daily gains after the USD rebounded on the back of strong US economic data. The US Bureau of Labor Statistics (BLS) reported that job openings increased to 8.09 million in November, exceeding expectations of 7.7 million and the prior month’s 7.83 million. Meanwhile, the ISM Services PMI rose to 54.1 in December from 52.1 in November, beating market estimates of 53.3. The Prices Paid Index, a measure of inflation, climbed significantly to 64.4 from 58.2, highlighting persistent price pressures in the service sector.

Despite this, the USD remains under pressure due to uncertainty surrounding President-elect Donald Trump’s trade policies. Reports suggested that new tariffs might target sectors critical to US national and economic security, though Trump denied these claims via his Truth Social platform. This ambiguity weighed on the Greenback, allowing the AUD/USD to extend its recovery.

Meanwhile, the Federal Reserve’s hawkish stance continues to underpin the US Dollar’s broader strength. The Fed has signaled a slower pace of rate cuts in 2025, with policymakers expressing concerns over stalled progress in the disinflation trend and robust labor market conditions. Elevated US bond yields also contribute to the Greenback’s resilience, while fears of renewed US-China trade tensions and the Reserve Bank of Australia’s dovish pivot cap the Aussie’s potential gains.

Technical overview

The AUD/USD climbed to 0.6270 on Tuesday, with technical indicators showing signs of recovery. The Relative Strength Index (RSI) rose to 44, escaping oversold levels, while the MACD histogram prints rising green bars, signaling improving bullish momentum. These indicators suggest the pair may be staging a recovery; however, a break above the 20-day Simple Moving Average (SMA) is needed to confirm a sustained bullish trend.

Immediate resistance is seen at 0.6280, with a break above potentially targeting 0.6320. On the downside, support lies at 0.6230, with further losses exposing the psychological 0.6200 level. While the pair’s technical outlook improves, caution remains warranted as broader market dynamics and upcoming US data releases could impact sentiment.
 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD retakes 0.6000 on the road to recovery amid US-China trade war

AUD/USD retakes 0.6000 on the road to recovery amid US-China trade war

AUD/USD is off the five-year low but remains heavy near 0.6000 in the Asian session on Monday. The pair continues to suffer from a US-China trade war as US President Trump said that he would not do a deal with China until the US trade deficit was sorted out. 

AUD/USD News
USD/JPY attempts tepid recovery above 146.00

USD/JPY attempts tepid recovery above 146.00

USD/JPY kicks off the new week on a weaker note, though it manages to stage a tepid recovery above 146.00 early Monday. The global carnage, amid the mounting risk of a recession and a trade war led by Trump's sweeping tariffs, keeps the safe-haven Japanese Yen underpinned at the expense of the US Dollar.

USD/JPY News
Gold buyers refuse to give up amid global trade war and recession risks

Gold buyers refuse to give up amid global trade war and recession risks

Gold price is holding the quick turnaround from one-month lows of $2,971, consolidating the recent downward spiral. The extension of the risk-off market profile into Asia this Monday revives the safe-haven demand for Gold price.

Gold News
Bitcoin, Ethereum and Ripple head to yearly lows while ETH hits two-year bottom

Bitcoin, Ethereum and Ripple head to yearly lows while ETH hits two-year bottom

Bitcoin price hovers around $78,600 on Monday after falling nearly 5% the previous week. Ethereum and Ripple also followed in BTC’s footsteps and declined 13% and 10%, respectively, in the previous week.

Read more
Strategic implications of “Liberation Day”

Strategic implications of “Liberation Day”

Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Majors

Cryptocurrencies

Signatures

Best Brokers of 2025