- The AUD/USD price analysis shows the Aussie climbing despite downbeat GDP data.
- Data on Wednesday revealed that Australia’s economy barely expanded in Q1.
- Markets anxiously awaited developments on trade talks.
The AUD/USD price analysis shows the Aussie climbing despite downbeat GDP data. The strength in the Australian dollar comes as the dollar weakens ahead of tariff negotiation developments. At the same time, market participants are looking forward to the US nonfarm payrolls report for more clues on Fed policy.
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The Aussie initially dropped after data on Wednesday revealed that Australia’s economy barely expanded in Q1. The GDP increased by 0.2%, a significant drop from the previous expansion of 0.6%. The data added pressure on the Reserve Bank of Australia to lower borrowing costs.
Already, the RBA has implemented two rate cuts since February. Additionally, policymakers have kept the door open to more cuts in the coming months. Market participants are now pricing an 80% chance of a rate cut at the July meeting.
Meanwhile, the dollar was subdued as markets anxiously awaited developments on trade talks with the US. Trump has asked countries to submit offers on negotiations by Wednesday. At the same time, there is caution in the markets ahead of the crucial nonfarm payrolls report. The data will show the state of the labor market after Trump’s tariffs. Weakness would pressure the Fed to lower borrowing costs.
AUD/USD key events today
- US ADP Non-Farm Employment Change
- US ISM Services PMI
AUD/USD technical price analysis: Bulls target the 0.6500 range resistance
On the technical side, the AUD/USD price is caught in a consolidation between the 0.6400 support and the 0.6500 resistance levels. In this range, the price has been chopping through the SMA with no clear direction. At the same time, the RSI has chopped through the 50 level, indicating almost equal momentum between bulls and bears.
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Within the range, the price trades above the 30-SMA, showing bulls are in the lead. At the same time, the RSI is currently slightly above 50, showing stronger bullish momentum. Therefore, AUD/USD might soon retest the range resistance.
A break above the range resistance would allow bulls to target the 0.6550 key level. On the other hand, if the level holds firm, the price will likely remain in consolidation.
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Saqib Iqbal
