- AUD/USD struggles to gain significant traction on Tuesday.
- RBA rate cut expectations and US-China trade tensions weigh on the Aussie amid a stronger USD.
- Bulls await a decisive break above the 0.6300 level before initiating fresh positions.
The AUD/USD pair continues its sideways price movement for the fifth consecutive day, remaining below the 0.6300 mark during the first half of Tuesday’s European session.
The Australian Dollar (AUD) struggles to gain momentum as rising expectations for an imminent rate cut by the Reserve Bank of Australia (RBA) weigh on sentiment. Additionally, escalating US-China trade tensions serve as a key headwind for the Aussie.
Meanwhile, the US Dollar (USD) maintains its strength, supported by expectations that US President Donald Trump’s trade tariffs will drive inflation higher. This could reinforce the Federal Reserve’s (Fed) hawkish stance, further limiting AUD/USD’s upside potential.
From a technical standpoint, AUD/USD has found acceptance above the 50-day Simple Moving Average (SMA). Oscillators on the daily chart are gaining positive traction, suggesting that the pair's path of least resistance may be to the upside. However, a sustained break above the 0.6300 level is needed before confirming a continued recovery from the recent multi-year low reached earlier this month.
In the event of a breakout, the pair could target:
- 0.6365-0.6370: Immediate resistance zone
- 0.6400: Psychological level
- 0.6455: 100-day SMA barrier
A sustained move above the 100-day SMA would indicate a potential bottoming out of prices, paving the way for further upside momentum.
On the downside, immediate support lies at the 0.6235 region (overnight swing low). A break below this level could lead to:
- Sub-0.6200 levels: Initial bearish extension
- 0.6145-0.6140: Additional support zone
- 0.6090-0.6085: Multi-year low
- 0.6000: Psychological mark
- 0.5980: April 2020 swing low
A deeper decline below these levels could confirm renewed bearish momentum.
AUD/USD Daily Chart
While technical indicators favor a potential upside, fundamental factors such as RBA rate cut expectations and trade tensions continue to pressure the Australian Dollar. A decisive break above 0.6300 is needed for bulls to gain confidence, while a move below 0.6235 could trigger further losses.
