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11.04.2025 12:39 PM
AUD/USD. Analysis and Forecast

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The AUD/USD pair is attempting to attract buyers in its rebound from the psychological level of 0.5900, marking its lowest point since March 2020. The upward momentum has managed to overcome the 0.6200 round level, driven by optimism sparked by U.S. President Donald Trump's tariff suspension. Less than 24 hours after imposing new tariffs, Trump rolled back his retaliatory measures for most U.S. trade partners, suspending them for 90 days. This move eased concerns about the economic impact of his trade policy, triggered a strong rally in equity markets, and increased demand for risk-sensitive currencies like the Australian dollar.

On the other hand, the U.S. dollar paused its decline on Wednesday following the release of the FOMC meeting minutes, which revealed that officials agreed the U.S. economy is at risk of higher inflation.

This prompted investors to reassess their expectations for Fed rate cuts, as policymakers advocated a cautious approach to further easing. Nonetheless, markets are already pricing in a potential restart of the Fed's rate-cutting cycle in June, with a total of 75 basis points in cuts expected by year-end. However, concerns over the escalating trade war between the U.S. and China are limiting the AUD/USD pair's further upside.

Trump raised tariffs on Chinese goods to 125% in retaliation for China's additional import duties on U.S. products. In response, China vowed to fight back and has filed a complaint against the U.S. with the World Trade Organization. This is discouraging traders from opening aggressive long positions on the Australian dollar, especially ahead of the U.S. Producer Price Index (PPI) release during today's North American session.

Technical Outlook

From a technical perspective, the intraday upward movement is struggling to break through the 0.62200 level, above which lies the 100-period simple moving average (SMA) on the 4-hour chart. A sustained break above this resistance could trigger another wave of short-covering, pushing AUD/USD beyond the intermediate barrier of 0.6245, toward the psychological 0.6300 mark and the supply zone near 0.6330.

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On the other hand, yesterday's low near 0.6117 is currently acting as immediate support, followed by the 0.6100 level. A failure to hold these supports would leave the pair vulnerable to a deeper decline toward 0.6040 and the key psychological level of 0.6000. The bearish trajectory may even extend further toward the multi-year low of 0.5900, especially since oscillators on the daily chart have yet to turn positive.

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
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