The AUD/USD pair saw a sharp recovery from its two-year low of 0.6200 early Thursday, climbing 0.65% to settle near 0.6260. The pair’s rebound was supported by a pause in the US Dollar’s uptrend, driven by hawkish Federal Reserve rate cuts. However, lingering worries about China’s weak economic recovery and potential tariff policies under the Trump administration may limit the Australian Dollar’s upside.

Fundamental overview

After Wednesday’s selloff, the Australian Dollar made a mild recovery. This comes as the US Dollar gained strength following the Federal Reserve’s decision to lower interest rates by 25 basis points (bps) to a range of 4.25%-4.50%. While the move was anticipated, the Fed’s latest guidance hinted at fewer rate cuts in the coming year.

In its updated projections, the Fed reduced its forecast for 2025 rate cuts to two, down from four in its September outlook. Fed Chair Jerome Powell emphasized caution during his press conference, citing persistent uncertainties around inflation and improvements in employment metrics. Powell also acknowledged that monetary policy is nearing a neutral stance, justifying a more measured approach to future adjustments.

On the Australian side, concerns over China’s economic recovery continue to weigh heavily on the Aussie. Recent data from China highlighted weak consumer spending and falling property prices. The outlook remains clouded by expectations of increased tariffs on Chinese goods under the next US administration, which could adversely impact Australia’s economy given its reliance on Chinese trade. These factors have limited the Australian Dollar’s recovery potential.

Technical overview

The AUD/USD climbed 0.65% to 0.6260 on Thursday, supported by oversold technical conditions. The Relative Strength Index (RSI) rebounded sharply to 31, moving away from oversold territory and signaling the potential for further recovery. Meanwhile, the MACD histogram shows diminishing bearish momentum, with rising red bars indicating a potential shift in market sentiment.

While the pair has found some footing, key resistance is located at 0.6280, with a break above this level needed to challenge the psychological 0.6300 barrier. On the downside, immediate support is at 0.6230, with a drop below this level potentially exposing the recent lows near 0.6200.
 

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

EUR/USD attracts some buyers above 1.1050, FOMC Minutes in focus

EUR/USD attracts some buyers above 1.1050, FOMC Minutes in focus

The EUR/USD pair rises to near 1.1065 during the early European session on Wednesday. The US Dollar weakens against the Euro after US President Donald Trump's tariff policy takes effect. Later on Wednesday, traders will take more cues from the release of the FOMC Minutes.  

EUR/USD News
GBP/USD appreciates to near 1.2850 due to easing trade tensions after Trump's comments

GBP/USD appreciates to near 1.2850 due to easing trade tensions after Trump's comments

The GBP/USD pair advances for a second straight session, trading near 1.2820 during Asian hours on Wednesday. The pair’s uptick is supported by easing trade tensions after Trump signaled openness to negotiations with global partners, fueling hopes of a potential de-escalation in trade conflicts.

GBP/USD News
Gold: Third time a charm for buyers?

Gold: Third time a charm for buyers?

Gold price is looking to finally end its corrective downside early Wednesday, finding demand once again near the $2,970 region. A sustained upside in Gold price hinges on the market reaction to the reciprocal tariffs and the Minutes of the US Federal Reserve March policy meeting.  

Gold News
Bitcoin, Ethereum and Ripple target $73,000 BTC, $1,300 ETH, and $1.30 XRP

Bitcoin, Ethereum and Ripple target $73,000 BTC, $1,300 ETH, and $1.30 XRP

Bitcoin price hovers around $76,200 on Wednesday after falling 3.59% the previous day. Ethereum and Ripple followed BTC’s footsteps and continued their downward trend.

Read more
The Fed is looking at a hefty price level

The Fed is looking at a hefty price level

We are still in thrall to tariffs, the faux-macro “data” driving markets. The WSJ editorial board advised other countries to take their tariffs to zero so that Trump’s “reciprocal” tariffs will have to be zero, too. Cute, but no cigar.

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