AUD/USD Forecast: Bulls regain confidence, aim to challenge the yearly high

AUD/USD Current Price: 0.6417

• Back and forth between Washington and Beijing weighed on investors’ mood.
• Australia will publish updated inflation figures next Wednesday.
• AUD/USD trades near YTD highs and aims to extend gains beyond it.

The AUD/USD pair is up for a third consecutive day, recovering above the 0.6400 mark in the mid-American afternoon amid renewed US Dollar (USD) weakness. The US Dollar found near-term demand throughout the first half of the day amid modest optimism regarding trade talks between the United States (US) and China. However, the sentiment soured early in the American session, as Beijing denied that President Xi Jinping had called US President Donald Trump. The USD resumed its slide, falling alongside Wall Street. Following a positive start to the week, US indexes turned red, reflecting fresh concerns.

Trump’s levies pose a risk to all major economies, and while reciprocal tariffs are on pause, they still weigh on business sentiment. Finally, it is worth noting that the White House's attempt to pour cold water on trade tensions by saying tariffs on China should come “sustainably” down has not been enough to trigger a positive response from the Asian giant.

Data-wise, Australia did not publish relevant figures, and it will take until Wednesday for the macroeconomic figures to become more interesting. Australia will then publish the Q1 Consumer Price Index (CPI) and the RBA Trimmed Mean CPI for the same period. Later in the day, the US will release the ADP Employment Change report and the first estimate of the Q1 Gross Domestic Product.

AUD/USD short-term technical outlook

The daily chart for the AUD/USD pair shows it hovers near its recent high in the 0.6430 region and is biased higher. Technical indicators aim north near overbought readings, with limited momentum but still suggesting higher highs ahead. At the same time, the 20 Simple Moving Average is about to cross above a flat 100 SMA, both at around 0.6280. The 200 SMA, in the meantime, provides dynamic resistance at around 0.6460.

The 4-hour chart shows the AUD/USD pair is finding near-term support in a flat 20 SMA at around 0.6390, while the 100 and 200 SMAs also lack directional strength, yet far below the shorter one. Finally, technical indicators hover around their midlines with uneven strength, yet still favoring another leg north, particularly if the pair overcomes the 0.6435 resistance level.

Support levels: 0.6390 0.6360 0.6325

Resistance levels: 0.6435 0.6470 0.6505