- The Aud/USD was operating around the 0.6300 area during the American session on Tuesday, modestly higher in the day.
- Despite the rebound, the mixed technical signals and a cautious risk tone maintain limited profits for now.
- The key resistance arises around 0.6310/0.6325, while support levels seem grouped near the 0.6290 region.
The Australian dollar (AUD) tried a rebound on Tuesday, with the AUD/USD recovering towards the 0.6300 mark during the American session. However, the rebound seemed modest and limited, since the pair fought to gain continuity amid the uncertainty about global commercial developments, a cautious context of the US dollar (USD) and mixed technical signals. The price action was developed in an adjusted range while investors evaluated the perspectives of Australian fiscal policy before the next federal budget and closely monitored developments in the US tariff policy.
The broader perspective for the AU is still fragile, but the expectations that the Bank of the Australian Reserve (RBA) could already have discounted short -term rate movements and stronger domestic data than expected continue to offer modest support.
What moves the market today: the Australian dollar stabilizes while operators expect the data of the CPI and the budget
- The AU extended the profits on Monday and stabilized around the 0.6300 area while the operators would digest the recent improvements in the feeling of risk while preparing for a key week of domestic data. The preliminary figures of the PMI and the reduction of tariff anxiety helped reduce some pressure -related currencies, despite the persistent global commercial friction.
- The market approach has moved to the next publication of the monthly indicator of the Australian CPI for February, which is expected for March 26, and the Federal Budget 2025-26, which will be published on March 25. With nationally required national elections for mid -May, the budget is seen as a possible turning point in the economic strategy. The surveys suggest a careful career between the current Labor Government and the opposition of center-right.
- The US dollar lost some land, giving part of the progress of last week. However, the dollar remained firm in general, since Federal Reserve (FED) officials continue to highlight the persistent inflation risks, while they point to caution on the road to feat cuts. The Central Bank maintained stable interest rates last week, but revised inflation forecasts and cut the expectations of GDP.
- On the other side of the Pacific, the RBA remains in waiting mode. Although the Central Bank cut its cash rate in 25 basic points in February, the officials – including Governor Michele Bullock – have emphasized that any additional action will depend on the inflation trends that are coming, while the vice -governor Andrew Hauser warned against assuming rapid rate cuts. The markets continue to discount a moderate relaxation cycle, which could begin in mid -year.
- Net speculative positions in the Australian dollar are still firmly negative, reflecting a continuous bearish feeling. According to CFTC data, short bets on the AUs reached maximum of several weeks in mid -March, with investors reacting to external uncertainties and winds against driven by raw materials.
Aud/USD technical analysis: Limited recovery while mixed signs cloud the short -term perspective
The pair was last operating near the 0.6300 threshold, managing to advance slightly but showing signs of exhaustion. The indicator of convergence/divergence of mobile socks (MACD) has become negative, printing a new red bar and pointing out a fading of the bullish impulse. Meanwhile, the Relative Force Index (RSI) rose to 49, increasing slightly but still located in bearish territory.
Additional indicators have a divided image. While the raw material channel index (CCI) and the bull/bassist power are neutral, both the 10 -day EMA and the 10 -day SMA are located just above the current price, pointing out immediate resistance. On the other hand, the 20 -day SMA is supported, suggesting a soft technical floor.
Resistance levels are observed around 0.6308 to 0.6325, which coincide with short -term mobile socks and a recent congestion area. The support is about 0.6305, with larger layers at 0.6298 and 0.6275, the latter being a base during the fall of last week.
Although Tuesday’s recovery shows promises, the perspective remains cautious. The mixed configuration of short and long -term mobile socks suggests a limited rise potential unless a decisive breakup occurs above 0.6330. Operators can be maintained defensive before Wednesday inflation data and Australia’s key fiscal updates.
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.
