AUD/USD has staged an impressive recovery following the sharp drop triggered by the U.S. Liberation Day tariffs!
The pair is now testing a resistance level that has defined the price ceiling for most of 2025.
Will we see a bullish breakout in the next few days?
AUD/USD Daily Forex Chart by TradingView
Recent commodity price strength has helped boost the Aussie, with iron ore and base metals seeing renewed demand from a recovering Chinese manufacturing sector. Additionally, the Reserve Bank of Australia’s (RBA) decision to hold rates steady while markets anticipate potential Fed cuts has created a favorable interest rate differential for AUD.
Meanwhile, the U.S. dollar has suffered a broad-based decline due to intensifying trade disputes and economic data surprises. Trump’s announcement of a 90-day tariff pause (excluding China) provided relief for risk-sensitive currencies like AUD, while China’s signals that it wouldn’t escalate trade tensions further calmed market fears.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. and Australian dollars, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Will these lead to AUD/USD making new 2025 highs?
AUD/USD has climbed above the 100 SMA, suggesting improving short-term momentum. However, both 100 and 200 SMAs remain in a downward slope, indicating the longer-term bearish bias isn’t completely over yet.
Bullish candlesticks and consistent trading above the .6400 psychological handle could bump AUD/USD to the R2 (.6479) Pivot Point line near the 200 SMA.
But if AUD/USD finds bearish pressure at its current levels and .6400 holds as resistance, then AUD/USD could drop back to the .6300 psychological level, if not the S1 (.6159) Pivot Point area.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
