- AUD/USD retreats toward the 0.6280 zone during Monday’s American session after peaking near 0.6340.
- Sentiment on the US Dollar seesaws amid fresh trade headlines and recession commentary.
- Key resistance is noted around 0.6320 and 0.6410; support lies near 0.6290 and 0.6280.
The Australian Dollar (AUD/USD) gave up its earlier strength on Tuesday, falling from session highs near 0.6340 to trade closer to the 0.6280 area during North American hours. The reversal came as the US Dollar Index (DXY) attempted a modest bounce off its three-year low near the 99.00 mark.
This shift in tone followed remarks from US officials suggesting reduced recession risks and progress on trade negotiations with Europe, though concerns remain over the unresolved US-China tariff fight.
Daily digest market movers: USD sentiment fluctuates on mixed economic signals
- Kevin Hassett from the US National Economic Council dismissed fears of a recession, boosting the Greenback's tone temporarily.
- Sector-specific US tariffs are still likely, especially targeting electronics and chips, despite a general 90-day tariff pause.
- Trade talks with the EU show progress, helping limit broader market fears of a full-scale global tariff escalation.
- The University of Michigan’s Consumer Sentiment Index posted a steep drop, suggesting households are concerned about rising costs.
- Treasury yields remain under pressure, reflecting continued bond demand amid global growth concerns.
- The Australian Dollar remains vulnerable due to its export reliance on China and the escalating trade tensions.
- Investors await key US Retail Sales on Wednesday and Australia’s jobs data on Thursday to provide directional cues.
Technical analysis
Technically, AUD/USD shows signs of near-term bullish momentum despite Monday’s pullback. The Relative Strength Index (RSI) sits near 55, reflecting a neutral-to-positive tone, while the Moving Average Convergence Divergence (MACD) continues to print a green bar and issues a fresh buy signal. The pair is currently trading in the middle of its daily range between 0.6274 and 0.6342, lacking a decisive breakout.
Shorter-term moving averages such as the 10-day Exponential Moving Average (EMA) and 20-day Simple Moving Average (SMA) support the upside, while the 100-day SMA also aligns with bullish pressure. However, the 200-day SMA at 0.6483 remains a ceiling that could limit further rallies.
Support levels are identified at 0.6291, 0.6286 and 0.6281. Resistance sits at 0.6324, followed by 0.6413 and the longer-term cap at 0.6483. The technical outlook leans bullish in the short run, but a clear break above 0.6340 is needed to confirm continuation.
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
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
Editors’ Picks
AUD/USD holds above mid-0.6300s amid mixed fundamental cues
AUD/USD consolidates near the weekly low touched on Wednesday amid fading optimism over a quick resolution to the US-China trade dispute. Moreover, easing concerns about the Fed's independence assists the USD to preserve its recovery gains registered over the past two days and acts as a headwind for the currency pair.
USD/JPY snaps a two-day winning streak to over one-week high
USD/JPY eases from over a one-week top set on Wednesday and stalls this week's recovery move from a multi-month, though it lacks follow-through selling. Concerns about the US-China trade standoff and the divergent BoJ-Fed policy expectations continue to underpin the JPY, which weighs on the currency pair.
Gold price rallies back to $3,340 area on fading US-China trade deal optimism
Gold price regains positive traction during the Asian session on Thursday and snaps a two-day losing streak to the $3,260 area, or the weekly low touched the previous day. The optimism over a possible US-China trade deal fades quickly and revives demand for the safe-haven bullion.
TRUMP meme coin rallies following announcement of President Trump's upcoming dinner with top 220 holders
Official TRUMP rallied 50% on Wednesday after the team behind the meme coin announced plans for its top 220 token holders to have a dinner with President Donald Trump in May. The announcement also included an extension of the token's initial unlock plan by an additional 90 days.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
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.