- The Aud/USD continues to sink in the American session on Monday, quoting near the 0.6000 region after briefly arrested an Asian recovery.
- The commercial confrontation between the US and China intensifies with more tariffs; Trump considers a 90 -day pause for others, Australia is still at risk.
- The bearish impulse persists with increasing overall signs; Resistance is observed about 0.6100, while the torque remains in the middle range.
The Aud/USD pair is still under sustained pressure during the American session on Monday, staying close to the 0.6000 area after an ephemeral rebound in Asia. The pair has extended its decline since the deep losses of Friday, since the feeling of risk remains negative amid the continuous climbing of tariffs between the United States and China.
The aggressive position of US President Donald Trump, highlighted by a new executive order that imposes a 34% tax on Chinese imports, has generated fears of a broader commercial war. Meanwhile, the hopes of a tariff relief faded after the White House denied reports on a 90 -day pause, taking the markets back to the mode of risk aversion.
From a technical point of view, the PAR is still deeply bassist with the relative force index (RSI) in overall territory and the MACD confirming a renewed downward pressure.
Daily summary of market movements: Tariff rhetoric keeps Aussie pressed
- The tensions between the US and China intensified after President Trump’s last commercial decree caused Beijing to respond with 34%tariffs. Despite the initial reports that hinted at a 90 -day break in the largest tariffs, the White House firmly refuted the statement, describing it as misinformation.
- The actions initially trimmed losses to the speculation of a softer posture, but they were quickly invested after the official denials. Wall Street fell sharply again, with Dow Jones losing more than 1.5% and S&P 500 and Nasdaq registering similar losses before recovering.
- The Australian dollar remains exposed to Chinese commercial dynamics, and due to the growing tariff threats, market participants are increasingly valuing an aggressive loosening by the Bank of the Australian Reserve.
- The Chinese Ministry of Foreign Affairs rejected the US approach, qualifying it as coercive and not very constructive, since the commercial dispute does not show signs of resolution. Trump’s insistence on solving the commercial imbalance before any agreement adds more uncertainty.
- The failure of the AU to capitalize on the previous profits reflects a diminishing confidence in the perspectives of global growth, with raw materials and risk currencies falling together.
Technical analysis
The technical background for the AUD/USD is still decidedly bassist on Monday. The price action is close to the environment of the day, having bounced slightly from the previous minimums. However, the bearish impulse is still rooted with the MacD by printing a new red bar and maintaining a clear sales signal. The RSI stands at 25, deeply in over -sales territory, although with a slightly softer fall compared to Friday.
Despite the downward pressure, some mixed signals have emerged. The raw material channel index (CCI), surprisingly, points to a possible overtime rebound, while the power of bulls/bassists remains flat, hinting at temporary consolidation.
The broader trend remains negative, confirmed by a cleaning signals cleaning through the main mobile averages. The 10 -day EMA, together with the SMA of 20 days, 100 days and 200 days, are all aligned downward, reinforcing the dominant bearish trend.
Faqs Australian dollar
One of the most important factors for the Australian dollar (Aud) is the level of interest rates set by the Australian Reserve Bank (RBA). Since Australia is a country rich in resources, another key factor is the price of its greatest export, iron mineral. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and commercial balance. The feeling of the market, that is, if investors are committed to more risky assets (Risk-on) or seek safe shelters (Risk-Off), it is also a factor, being the positive risk-on for the AUD.
The Australian Reserve Bank (RBA) influences the Australian dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of the interest rates of the economy as a whole. The main objective of the RBA is to maintain a stable inflation rate of 2% -3% by adjusting the interest rates or the low. Relatively high interest rates compared to other large central banks support the AU, and the opposite for the relatively low. The RBA can also use relaxation and quantitative hardening to influence credit conditions, being the first refusal for the AU and the second positive for the AUD.
China is Australia’s largest commercial partner, so the health of the Chinese economy greatly influences the value of the Australian dollar (Aud). When the Chinese economy goes well, it buys more raw materials, goods and services in Australia, which increases the demand of the AU and makes its value upload. The opposite occurs when the Chinese economy does not grow as fast as expected. Therefore, positive or negative surprises in Chinese growth data usually have a direct impact on the Australian dollar.
Iron mineral is the largest export in Australia, with 118,000 million dollars a year according to data from 2021, China being its main destination. The price of iron ore, therefore, can be a driver of the Australian dollar. Usually, if the price of iron ore rises, the Aud also does, since the aggregate demand of the currency increases. The opposite occurs when the price of low iron ore. The highest prices of the iron mineral also tend to lead to a greater probability of a positive commercial balance for Australia, which is also positive for the AUD.
The commercial balance, which is the difference between what a country earns with its exports and what it pays for its imports, is another factor that can influence the value of the Australian dollar. If Australia produces highly requested exports, its currency will gain value exclusively for the excess demand created by foreign buyers who wish to acquire their exports to what you spend on buying imports. Therefore, a positive net trade balance strengthens the AUD, with the opposite effect if the commercial balance is negative.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
