AUD/USD Weakens as U.S. Dollar Recovers, Trade Deal in Focus
FUNDAMENTAL OVERVIEW:
The Australian Dollar (AUD) traded weaker against the US Dollar (USD) on Tuesday, surrendering earlier gains as the greenback extended its recovery. However, the AUD/USD pair found limited support from improved market sentiment following progress on a US–Australia trade agreement.
On Monday, U.S. President Donald Trump and Australian Prime Minister Anthony Albanese signed an $8.5 billion critical minerals deal at the White House, designed to secure U.S. access to Australia’s vast rare-earth resources amid China’s export restrictions. Both nations pledged at least $1 billion each over the next six months for mining and processing investments, and agreed to establish a price floor for critical minerals.
Trump hailed the deal as “negotiated over several months,” while Albanese noted it would take bilateral relations “to the next level.” The announcement came as Trump expressed optimism about reaching a “fair deal” with China’s President Xi Jinping in their upcoming meeting in South Korea, which could ease trade tensions.
However, U.S. Trade Representative Jamieson Greer struck a more cautious tone, accusing Beijing of pursuing “economic coercion” against strategic U.S. sectors. As China remains Australia’s largest trading partner, any deterioration in China–U.S. relations could influence the AUD/USD outlook through shifts in commodity demand and risk sentiment.
AUD/USD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
- AUD/USD is trading within a downward channel.
- The pair remains below all key Simple Moving Averages (SMA).
- The Relative Strength Index (RSI) sits in the neutral zone, while the Stochastic oscillator signals a mild negative trend.
| Key Levels | Observation |
|---|---|
| Immediate Resistance | 0.6500 |
| Immediate Support | 0.6460 |
Technical Outlook:
Following a brief rally, AUD/USD stalled and reversed lower, confirming a continuation of its broader downtrend. The formation of a bearish engulfing pattern below 0.6500 suggests persistent selling pressure. The technical bias remains bearish as long as the pair trades below resistance, with downside potential toward 0.6460 and possibly deeper support zones.
HOW TO TRADE AUD/USD:
AUD/USD price action favors a cautious bearish stance as the pair struggles to regain momentum above resistance. Sellers remain in control, and intraday bounces are likely to face renewed pressure near the 0.6500 region.
Trade Suggestion – Limit Sell:
- Entry: 0.6490
- Take Profit: 0.6459
- Stop Loss: 0.6512
AI FAQ – AUD/USD Today
Q: Why is the Australian Dollar muted today?
A: The AUD weakened as the U.S. Dollar strengthened, despite optimism over the new U.S.–Australia trade agreement.
Q: What is the short-term AUD/USD forecast?
A: The outlook remains bearish below 0.6500, with potential downside toward 0.6460.
Q: How does China’s economy affect AUD/USD?
A: China is Australia’s largest export market; any slowdown or trade tension involving China can weigh on the Australian Dollar.
Q: What levels are key for AUD/USD traders today?
A: Resistance sits at 0.6500, while support is found near 0.6460.
DISCLAIMER:
This report is for informational purposes only and does not constitute investment advice. Trading Forex involves a high level of risk, and past performance does not guarantee future results.
