AUD/USD Price Forecast: Aussie Holds 0.6420 Support as Bulls Eye 0.6442 Breakout

AUD/USD Supported by USD Weakness and Trade News

The Aussie dollar got a boost from a partial pullback in the US Dollar Index (DXY) which fell 0.5% to 100.40 after reaching recent highs. This was as traders waited for US economic data including Q1 GDP and inflation numbers to give clues on the Fed’s next move.

However the AUD/USD was hit after a US federal court blocked President Trump’s “Liberation Day” tariffs, ruling only Congress can impose broad trade restrictions. While this reduced fears of sudden tariff hikes, US-China tensions escalated as the US blocked exports of key technologies to China and Australia is a trade exposed economy.

RBA’s Policy Outlook and Australian Data Affect the AUD

The RBA sounded cautious. Governor Michele Bullock said inflation concerns persist despite some easing and warned of downside risks from global trade tensions. The RBA hinted at rate cuts if conditions deteriorate. Adding to the mixed outlook, Australian private capital spending surprised to the downside in Q1 falling 0.1% while April inflation was steady at 2.4% year on year, slightly above expectations.

Technical Analysis: AUD/USD Holds Key Support as Markets are Indecisive

On the charts AUD/USD is stuck between 0.6482 and 0.6408 forming a descending channel. The pair bounced to 0.6424 but is capped by the 50-period EMA at 0.6442.

• Resistance: 0.6442 (50-EMA), 0.6482, 0.6510

• Support: 0.6408 (trendline), 0.6391, 0.6372MACD is showing bullish divergence and a potential crossover.

Candlesticks have long wicks at 0.6420, buyers are defending but lower highs suggest a weakening trend. Above 0.6442 could be 0.6482-0.6510, below 0.6408 could be 0.6372.