The Australian dollar steadied around $0.652 on Monday, as investors cautiously awaited the Reserve Bank of Australia’s monetary policy decision due on Tuesday. Markets broadly expect a 25 basis point rate cut to 3.60% at the August meeting, amid softer-than-expected Q2 inflation and a rise in the unemployment rate to its highest level in three and a half years. This follows the RBA’s unexpected decision in July to keep the cash rate unchanged at 3.85%, citing a more balanced assessment of inflation risks and continued resilience in the labor market. However, uncertainty remains as RBA Governor Michele Bullock reiterated that the central bank would no longer provide forward guidance, emphasizing that rate decisions are made solely by the board and cannot be anticipated in advance. Externally, the Australian dollar found partial support from a weakening greenback ahead of Tuesday’s US inflation data and the looming August 12 US-China tariff truce deadline.
From：TradingEconomics（[tradingeconomics.com](https://tradingeconomics.com)）

The Australian dollar edged lower to 0.6522 against the US dollar, pressured by a firmer greenback and ongoing global trade uncertainty.

🔹 Strong USD: Rising US bond yields and cautious Fed outlook continue to support the US dollar.
🔹 Weaker sentiment: Risk aversion increases amid lack of progress in global trade talks.
🔹 Outlook: AUD likely to fluctuate between 0.65–0.66 in the short term. Traders should monitor Fed signals and trade policy developments.

On Monday, May 26, the Australian dollar surged past the 0.65 mark against the US dollar, reaching 0.6505—its highest level since May 7. The Aussie has strengthened nearly 0.7% over the past week, supported by a weakening greenback, rising commodity prices, and renewed risk appetite in global markets.

The US dollar has dropped over 1% this week, on track for its largest weekly decline since early April. Investor sentiment toward the USD has deteriorated amid concerns over ballooning US fiscal deficits. The passage of a major tax cut and spending bill in the House—expected to add $3–5 trillion to the national deficit—has intensified scrutiny. Moody’s recent downgrade of the US credit outlook further pressured the greenback.

Meanwhile, commodity prices remain resilient. Gold has surged above $3,320/oz, and industrial metals like copper and iron ore continue to find support—benefiting export-driven currencies like the Aussie.

Analysts say the technical break above 0.6500 could pave the way toward the next resistance zone near 0.6550. Market focus now turns to upcoming economic data from China, the Reserve Bank of Australia’s policy stance, and shifting expectations around a potential Fed rate cut later this year.

The Australian dollar saw a significant surge today, driven by several key factors:

Weak U.S. Economic Data: The latest U.S. retail sales report showed a sharp decline, marking the biggest drop in nearly two years. This led to a decrease in the U.S. 10-year Treasury yield to 4.48%, narrowing the gap with the Australian 10-year yield (4.45%). As a result, investor confidence in the USD weakened, prompting a shift towards the AUD.

Adjustment in RBA Rate Cut Expectations: While the Reserve Bank of Australia (RBA) recently implemented a rate cut, Governor Michele Bullock stated that it is too early to declare victory over inflation. This cautious stance has strengthened market confidence in the Australian dollar.

Strong Australian Economic Data: Recent reports showed that Australia added 44,000 jobs last month, far exceeding the expected 19,400. Full-time employment also increased by 54,100, highlighting the strength of the labor market, further supporting the AUD.

Optimism Over U.S.-China Trade Relations: Former U.S. President Donald Trump recently suggested that a new trade deal between the U.S. and China could be possible. This has fueled hopes for an improved global trade environment, benefiting trade-driven economies like Australia and boosting the AUD.

In summary, shifts in global economic data, adjusted central bank policy expectations, and positive trade outlooks have collectively driven today’s strong rally in the Australian dollar.

The Australian dollar stabilized above $0.62 on Tuesday, recovering from multi-year lows reached in the previous session, following U.S. President Donald Trump’s decision to postpone tariffs on Mexico and Canada for a month after successful negotiations with their leaders.

Despite this, the planned U.S. tariffs on China are still set to take effect later today.

Trump is scheduled to meet with Chinese President Xi Jinping this week, as both sides aim to reach a deal and avoid a broader trade war.

In Australia, investors are awaiting December trade figures, due on Thursday, to assess the strength of the country’s export-driven economy.

Market sentiment is leaning toward expectations that the Reserve Bank of Australia may begin cutting interest rates this month, amid easing inflation and signs of slowing economic activity.

(From Trading Economics)

The Australian dollar has rallied during the course of the week to reach toward the 0.64 level, an area that’s been important more than once. If you look at the daily chart, it’s also where the 50-Day EMA is currently hanging about, so it all comes together. The resulting candlestick for the week is an inverted hammer, which could be a very negative turn of events, but if we do break above the top of it, extensively the 0.64 level, then you have the possibility of moving to the 0.65 level, and then eventually the 0.66 level where the 50-Week EMA currently resides. (The 200-Day EMA currently resides on the daily chart as well.)

If we break down below the lows of the last couple of weeks, it opens up the possibility of the move down to the 0.62 level, and then after that the potential move of the Aussie down to the 0.60 level. Keep in mind that the market is very sensitive to risk appetite, as the Australian dollar is not only a commodity currency, but it’s also a currency that banks on growth in Asia and the globe in general.

Ultimately, I do expect to see a lot of noisy trading, but you still have to assume that the downside is the best way to go. Picking up “cheap US dollars” will continue to be the way most traders are paying attention to, and therefore I think you’ve got a situation where the market is going to continue to see significantly downward momentum, and eventually something will probably break. It is not until we break above the 0.66 level that I would consider buying.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

EUR/USD FORECAST – TECHNICAL ANALYSIS
EUR/USD rebounded on Thursday after a subdued performance during the previous trading session, but gains were capped by soaring U.S. Treasury rates, a hostile market environment that appears to have prevented the pair from clearing technical resistance around the 1.0600 handle.

With U.S. yields on a bullish tear and geopolitical tensions in the Middle East on the rise, the euro will struggle to maintain a sustained upward course. This means that the direction of travel is likely to be lower for the exchange rate.

In terms of technical analysis, if EUR/USD fails to push higher and resumes its decline, we could see a move towards trendline support at 1.0500. This floor could provide stability and ease the selling pressure, but if it caves in, prices could be on their way to the 2023 lows at 1.0448. On further weakness, the focus shifts to 1.0350.

Conversely, if sentiment shifts in favor of the bulls and EUR/USD takes out overhead resistance at 1.0600/1.0625, buyers may regain control of price action, paving the way for a rally towards 1.0765, the 38.2% Fibonacci retracement of the July/October slump.

Eager to gain insights into the euro’s future direction and the fundamental drivers that will shape the outlook in the months ahead? Explore the details in our free Q4 trading forecast!

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EUR/USD TECHNICAL CHART
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USD/JPY FORECAST – TECHNICAL ANALYSIS
USD/JPY lacked directional conviction on Thursday, despite the surge in U.S. rates. While rising U.S. Treasury yields offered support to the U.S. dollar, the yen experienced heightened demand due to escalating geopolitical tensions in the Middle East. This juxtaposition created a neutral trading environment for the exchange rate. Although both the yen and the U.S. dollar are commonly perceived as safe-haven assets, the yen tends to be favored during periods of elevated market uncertainty.

From a technical analysis perspective, USD/JPY remains firmly entrenched in a robust uptrend, although it appears to be undergoing a phase of consolidation at the moment. In any case, caution is warranted given the pair’s proximity to the critical 150.00 level. In 2022 and 2023, the Japanese government took steps to defend the country’s currency against further depreciation when this threshold was breached.

In the event that Tokyo decides not to intervene for now and USD/JPY breaks above 150.00 decisively, upward momentum could gather pace, setting the stage for a rally towards the 2022 highs at 151.95. On further strength, the bulls may muster the impetus to challenge channel resistance near 152.30.

On the other hand, if prices get rejected lower and initiate a pullback, initial support is found within the range of 149.25 to 148.90. Clearing this floor might attract fresh sellers to the market, creating favorable conditions for a potential descent toward 147.30, followed by 146.00.

From Diego Coleman

AUD/USD, GBP/AUD PRICE, CHARTS AND ANALYSIS:RBA Downgrades Growth Forecasts for 2023.

Markets Pricing in a 50-50 Chance of a Further Rate Hike by the Central Bank in Q4.
China Lifts Barley Tariffs in Another Step Towards Trade Normalization Between the Two Countries.

AUD FUNDAMENTAL BACKDROP
The Australian Dollar continued its recovery overnight with modest gains against both the Greenback and the GBP. The week thus far has proven to be another challenging one for the AUD following a continuation of the pause in rate hiking cycle by the RBA on Tuesday which weighed on the currency.

Yesterday saw the AUD regain some strength and arrest its recent slump finishing the day up 0.2% against the US Dollar. The move in part came down to a slightly weaker US Dollar as well as a wee bit of Australian Dollar strength which saw GBPAUD retreat from the fresh YTD high around the 1.9480 mark. Looking at the currency strength chart below we can see AUD is leading the charge this morning with the US Dollar in particular struggling as we do have NFP and Jobs data ahead later in the day.

The RBA Monetary Policy Statement this morning revealed the Central Bank contemplated a rate hike at this week’s meeting but felt that consumers and households were already experiencing a “painful squeeze” further cementing the case for a pause. The RBA stressed that this would also provide more time to assess how the how the economy and risks to inflation and employment were evolving. Inflation remains the Central Banks key focus moving forward with positive signs in the offing. Markets are still pricing in a 50-50 chance of one more rate hike in Q4 as services inflation remains elevated and productivity growth lags.

Economic growth forecasts have been downgraded with the Central Bank now expecting growth of just 0.9% in 2023 compared with the previous estimate of 1.2%. Other notable forecasts from the RBA included headline inflation at 4.1% by the end of this year, down from the previous forecast of 4.5%. The RBA does expect inflation to remain sticky in 2024 before easing back to 2.8% by end of 2025 which could mean higher rates are here for a sustained period of time, something which has been echoed by other Central Banks as well. Key uncertainties cited include Australia’s biggest export market China, household consumption, inflation getting more persistent than expected and goods prices declining significantly.

In positive new China have decided to drop anti-dumping tariffs on its barley imports with the Australian Government using the opportunity to call for an end to remaining trade restrictions. This could be a big win for the Australian Government as annual trade was once as high as A$1.5 billion ($986.25 million) and follows on from the resumption of trade in products like coal and timber as the trading partners continue their attempts to normalize commercial ties.

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EVENT RISK
Later in the day US NFP and Jobs date could have an impact on AUDUSD as another positive and forecast beating NFP print could see the Dollar Index (DXY) continue its advance. The NFP print may be overshadowed by average hourly earnings however, as wage growth has proven a key component of inflationary pressure around the developed world in 2023. A positive and forecast beating print could in theory scupper any attempts of a recovery in AUDUSD.

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TECHNICAL OUTLOOK AND FINAL THOUGHTS
The technical outlook on AUDUSD testing the lower end of the symmetrical triangle pattern in play with a bounce from here needing to clear immediate resistance around 0.6600. A break above could bring a retest of the MAs with the 50, 100 and 200-day MAs all resting around the 0.6700 and could make a sustained recovery difficult.

Looking at IGCS IGCS shows retail traders are currently LONG on AUD/USD, with 83% of traders currently holding LONG positions. At DailyFX we typically take a contrarian view to crowd sentiment, and the fact that traders are long suggests that AUD/USD may enjoy a short bounce before continuing lower toward the support area around 0.6450 (May Swing Low).

If you would like to learn more about trading triangle patterns download the Free Guide Below.

GBPAUD has been on a tear since September 2022 with higher highs and higher lows since making its way toward the long-term descending trendline around the 1.9600 mark. This week has seen a fresh YTD high printed yesterday before a sharp pullback leaving the pair at a key support area around 1.9350.

There is a possibility for a deeper correction here, but the bullish trend remains strong with the Fundamental outlook likely to keep the GBP on the front foot for now.

Key Support areas which could come into play include the 50-day MA at 1.9180 before the psychological 1.9000, which could hold the key for bulls to retain control. On the upside yesterday’s highs will be the first area of focus before the descending trendline around the 1.9600 handle may finally be reached.

Written by: Zain Vawda, Markets Writer for DailyFX.com

Australian Dollar, AUD/USD, RBA, China Caixin PMI, Crude Oil, Gold – Talking Points
The Australian Dollar failed to capitalise on a lift in market sentiment
China – US relations continue to improve while Caixin PMI added to the positivity

The Australian Dollar found firmer footing before retreating today with growth-orientated assets generally moving higher to start the week.

Australian building approvals for May rose by a whopping 20.6% month-on-month, well above the 3.0% anticipated and -8.1% prior.

Interest rate markets are placing a low probability of a hike from the RBA tomorrow, but these numbers could spice up the monetary policy meeting. The Aussie Dollar bumped higher on the news but struggled to run on with it.

APAC equities are a sea of green, following on from Wall Street’s solid gain seen on Friday. Some positive economic news out of North America gave markets the boost ahead of a holiday-impacted start to the week there.

Today, China’s Caixin PMI manufacturing data also added to the uptick in mood, coming in at 50.5 rather than the 50.0 forecast.

Washington announced that US Treasury Secretary Janet Yellen will visit China this week in further signs of a potential thawing in the sometimes-frosty relationship between the two largest economies.

Crude oil has had a quiet session as it continues to recover from a test lower last week. The WTI futures contract is near US$ 70.50 bbl while the Brent contract is a touch above US$ 75 bbl.

Likewise, spot gold has barely moved as it trades near US$ 1,920 at the time of going to print. Higher Treasury yields seen on Friday might undermine the precious metal if they continue north.

Looking ahead, a series of European PMIs could hold the market’s attention ahead of US ISM manufacturing figures. The full economic calendar can be viewed here.

AUD/USD remains range-bound today after failing to penetrate breakpoint support levels toward the end of last week.

Those levels at .6574 and 0.6565 might continue to provide support ahead of the late May low of 0.6458.

Further down, support may lie at the prior low of 0.6387 and the nearby Fibonacci level of 0.6381. The latter is the 78.6% Fibonacci Retracement of the move from the low of 0.6170 to the peak of 0.7158.

On the topside, resistance could be at a potential breakpoint resistance zone in the 0.6800 – 0.6820 area.

Further up, resistance could be at the previous peaks of 0.7011 and 0.7030 ahead of a cluster zone in the 0.0.7137 – 0.7157 area.

— Written by Daniel McCarthy, Strategist for DailyFX.com