- The AUD/USD forecast shows thin trading amid tariff uncertainty.
- Scott Bessent said that China was the one to initiate a de-escalation in tariffs.
- US employment figures might show the impact of Trump’s tariffs on the economy.
The AUD/USD forecast shows thin trading amid uncertainty regarding trade negotiations between China and the US. Moreover, market participants are remaining on the sidelines ahead of key US economic data.
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The AUD/USD drifted on Tuesday amid mixed signals from the US on trade talks with China. The greenback steadied last week as the US and China adopted softer stances on tariffs. However, messaging from the two countries has been conflicting, sending mixed signals about a trade deal.
On Monday, US Treasury Secretary Scott Bessent said that China was the one to initiate a de-escalation in tariffs. It is clear that neither country is willing to be the first to lower duties. This could result in a prolonged pause that will continue to harm the global economy.
However, there was progress with other countries that briefly supported the dollar. According to Bessent, all is going well, and India will be the first to sign a deal and avoid tariffs.
Meanwhile, market participants are awaiting economic data from Australia and the US. Australia’s CPI report will shape the outlook for RBA rate cuts. On the other hand, US employment figures might show the impact of Trump’s tariffs on the economy. A downbeat report will pressure the Fed to cut rates and support the economy.
AUD/USD key events today
- JOLTS Job Openings
AUD/USD technical forecast: Bulls struggle to make new highs
On the technical side, the AUD/USD price is ranging within a solid resistance zone comprising the 0.6400 and the 0.6450 key levels. At the same time, the price is chopping through the 30-SMA, showing bears and bulls are almost equally matched.
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Previously, the price rallied in a steep uptrend above the SMA. Meanwhile, the RSI maintained its position above 50, suggesting solid bullish momentum. However, this changed when bulls neared the 0.6400 key psychological level. Price action drew nearer to the SMA, puncturing the line several times. Meanwhile, the RSI made a bearish divergence, indicating fading momentum.
If bears take charge, the price will break below the SMA to retest the 0.6200 key level and the 0.5 Fib retracement. On the other hand, the uptrend will continue if bulls break above the current resistance zone.
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Saqib Iqbal
