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Australian dollar/USD rose five consecutive times under tariff storm
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Hello everyone, today XM Foreign Exchange will bring you "【XM Group】: Five consecutive increases in the Australian dollar/USD under the tariff storm". Hope it will be helpful to you! The original content is as follows:
On Tuesday (April 15), the Australian dollar strengthened for the fifth consecutive trading day. The Australian dollar benefited from the global risk sentiment after U.S. President Trump announced an "amnesty" for key technology products.
Finance Analysis
Minutes of the RBA's meeting from March 31 to April 1 show that the timing of the next rate adjustment is still uncertain. Although the xmaccount.commission noted that the May meeting would be an appropriate time to reassess the policy, it stressed that no decisions had been preset. The xmaccount.commission acknowledges that global uncertainty, especially around U.S. tariffs, could significantly impact future prospects. The Fed also emphasized the upward and downward risks faced by Australia's economy and inflation.
The yield on Australia's 10-year government bonds fell to about 4.33%. While the RBA has kept interest rates unchanged this month, it has taken a more modest stance on future rate cuts and pointed out that core inflation is slowing. The market currently expects a 25 basis point interest rate cut in May, and expects a total of about 120 basis points to be cut throughout the year.
At the same time, the US dollar index (DXY) rebounded slightly after hitting its lowest point since 2022, and is currently trading around 99.70, and the market is coping with the growing risk of stagflation in the United States. The University of Michigan sentiment index fell to 50.8 in April, while one-year inflation expectations climbed to 6.7%. The producer price index (PPI) rose 2.7% year-on-year in March, down from 3.2% in February, and the core ratio slowed to 3.3%. The number of unemployment claims rose to 223,000, but the number of renewals fell to 1.85 million, indicating that the labor market is showing a mixed trend.
Last Sunday, Minneapolis Federal ReserveChairman Kashkari said that the economic impact of trade frictions will largely depend on how quickly the performance of trade uncertainty will be resolved. He xmaccount.commented: "In the past 10 years, except in March 2020, this is the biggest blow to confidence during my tenure at the Fed."
Technical analysts interpreted:
From the 120-minute chart, the Australian dollar/USD exchange rate showed a significant upward trend. The exchange rate has continued to rebound from the low point of 0.5913 and has now broken through the resistance of several moving averages. The MACD indicator shows that DIFF: 0.0037 and DEA: 0.0038 form a golden cross, while the RSI indicator has stood firm at the level of 64.2592, and is in a state of being relatively strong but has not yet entered the overbought area. The current price has formed an upward channel, with the key support level around 0.6300. In the short term, as long as the exchange rate can maintain the support of 0.6300, the upward action is expected to continue, and the next resistance level will look to the psychological threshold of 0.6400.
From the daily cycle, the Australian dollar/USD has experienced a sharp pullback in early April and is currently in the subsequent stage of a V-shaped reversal. The exchange rate has rebounded strongly from its low point of 0.5913 recently, and has filled most of the gaps. The key resistance level is at 0.6408, which is the previous high point area. Although the daily MACD indicator is still in the negative area, the gap between DIFF and DEA is narrowing, indicating that the medium-term momentum is improving. The current value of the RSI index is 57.6320, which is in a neutral and strong state. It is worth noting that the 200-day moving average (MA200) is at 0.6482, forming an important medium- and long-term resistance. From the perspective of volatility, after experiencing a large fluctuation, the exchange rate is currently seeking direction within the range of 0.6280-0.6400, which will be the focus of the next focus.
Preview of Market Sentiment
Current market sentiment is undergoing a transition from extreme panic to cautious optimism. The Trump administration's "amnesty" decision for technology products eases market concerns about disruptions in global supply chains, a move seen as a signal of policy flexibility and also eases market concerns about a general deterioration in trade relations.
From the performance of the Australian dollar, the market's preference for risky assets is recovering. Analysis of capital flow shows that some traders are reconfiguring emerging markets and xmaccount.commodity currency assets, and the Australian dollar, as a representative of risky currencies with high liquidity, has become one of the first choices.
However, caution remains. Warnings from multiple Fed officials about the sustained inflation and the fact that the dollar index fell below the 100 integer mark indicate that the market has not yet fully escaped concerns about the economic slowdown. The RSI indicator is in a neutral and strong area rather than an overbought area, which also reflects that the market mentality is still relatively cautious and there are no signs of excessive optimism.
Future Outlook
Short-term Outlook: In the next week, the Australian dollar/USD is expected to maintain a strong trend, but the upward trend may face an important resistance zone in the 0.6400-0.6450 region. Follow RBA officials' speeches this week and the United StatesRetail sales data, these may become the trigger for short-term exchange rate fluctuations. If it can effectively break through 0.6400, it may open up a new round of upward momentum; on the contrary, if it falls below 0.6280, it may retest the key support of 0.6200.
Medium-term Outlook: From a fundamental perspective, the Australian dollar faces two opposite forces: on the one hand, easing of global trade relations will benefit xmaccount.commodity currencies; on the other hand, the expectation of narrowing interest rate spreads between Australia and the United States suppresses the Australian dollar. In the next 1-2 months, the key point of the technology will be 0.6500, and this high point breakthrough will determine whether the medium-term trend can continue.
Long-term Outlook: In the long run, the Australian dollar/USD trend will depend more on the global economic growth prospects and the degree of policy differentiation between central banks in various countries. If the market's expectations for a soft landing in the global economy increase, the Australian dollar is expected to break through 0.6600 or even challenge the 0.6800 level; on the contrary, if trade frictions rekindle or global growth slows down significantly, the 0.5900-0.6000 region will become an important line of defense. From the perspective of long-term technical forms, it is currently at the end of the correction of the medium- and long-term upward trend. If it can successfully stand above 0.6400, it is expected to start a new round of upward cycle.
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