Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6450.
- Add a stop-loss at 0.6300.
- Timeline: 1-2 days.
Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6300.
- Add a stop-loss at 0.6450.
The AUD/USD pair jumped to a key resistance level as the US dollar fell and the trade conflict between the United States and China continued. It rose to a high of 0.6398, where it resisted moving above several times since February. It has jumped by 7.80% from its lowest level this month.
US dollar crash continues
The Australian dollar has jumped in the past few weeks because of the weaker US dollar. The greenback has been in a strong sell-off after Donald Trump’s Liberation Day earlier this month.
He announced sweeping tariffs on all countries on that day. Australia, a country that has a trade deficit with the US, received a 10% tariff, with Trump accusing the country of rejecting its animal products.
Most importantly, Trump started playing a game of chicken with China that pushed US tariffs to 145%. China also pushed its tariffs on US goods to 125%.
Donald Trump has hinted that he is uncomfortable with more tariffs on Chinese goods. However, he has intensified his pressure on China by barring exports of chips from American companies like NVIDIA and AMD.
He is also considering putting a huge tariff on Chinese ships that dock on US waters, a move he hopes will lead to more shipbuilding in the US. China has also paused buying US liquefied natural gas (LNG).
These actions are important for Australia since China is a big buyer of its natural resources like coal, gas, and iron ore.
Top Forex Brokers
The AUD/USD pair will continue reacting on any major news on trade. Also, some of the top economic numbers to watch will be the US and Australian consumer confidence and flash manufacturing and services PMIs.
AUD/USD technical analysis
The AUD/USD exchange rate has been in a strong uptrend in the past few weeks, jumping from a low of 0.5917 earlier this week to 0.6400. The pair has moved to an important level that was its highest swings on February 20th, March 17th, and April 3rd.
The pair is nearing the 50% Fibonacci Retracement level. Also, the Relative Strength Index (RSI) and the MACD indices have all pointed upwards. Therefore, more upside will be confirmed if the pair moves above the key resistance at 0.6400. A move above that level will point to more gains to the 50% retracement level at 0.6430. It will then soar to the 61.8% retracement level at 0.6550.
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