🔻 AUD/USD Dips as Bearish Pressures Resurface in Asian Session
The Australian Dollar (AUD) faced fresh selling pressure on Thursday, dragging AUD/USD down toward 0.6400 during the Asian session. This renewed weakness comes despite a broadly softer US Dollar, as traders reacted to disappointing Australian PMI figures, renewed US-China tensions, and rising expectations for additional rate cuts by the Reserve Bank of Australia (RBA).
The dip follows a short-lived recovery above the 200-day SMA on Wednesday, where AUD/USD briefly flirted with 0.6460, only to lose momentum overnight.
📉 Technical Outlook: Key Resistance Holds as Pair Reverses
Current Price: 0.6441
AUD/USD failed to hold above the 200-day Simple Moving Average (0.6454), signaling persistent bearish control. A decisive close above this level is needed to regain upside momentum. If achieved, the next resistance zones include:
- 0.6514 – 2025 YTD high (May 7)
- 0.6687 – November 2024 peak
On the downside, immediate support levels include:
- 0.6356 – May 12 low
- 0.6335 / 0.6303 – 55-day & 100-day SMAs
- 0.5913 – April 2025 low
- 0.5506 – March 2020 pandemic trough
Momentum indicators:
- RSI near 57 suggests mild upside bias
- ADX at 21 reflects a modest trend without strong conviction
🏦 Policy Divergence: Fed vs RBA Drives Sentiment
The growing monetary policy divergence between the Federal Reserve and the RBA has become a core driver of AUD/USD.
- The Fed held rates steady at its May 7 meeting, signaling caution and adopting a wait-and-see stance.
- Market participants are now pricing in a potential Fed rate cut by September, thanks to softer inflation and improving global trade sentiment.
In contrast, the RBA cut rates by 25 bps to 3.85% on May 20, citing rising economic uncertainty. The central bank signaled more easing ahead, projecting the cash rate could fall to 3.2% by 2027.
The RBA also downgraded:
- GDP growth forecast for 2025 to 2.1%
- Trimmed mean inflation to 2.6%
While the RBA stated policy remains only “somewhat less restrictive,” the tone leans dovish, casting a shadow over the Aussie’s upside potential.
🇨🇳 China Data Offers Limited Support as Risks Linger
Chinese economic data earlier this week provided mixed signals:
- Industrial output remained solid
- Retail sales and investment softened
Although these releases helped the AUD recover midweek, broader concerns remain:
- Persistent US-China trade tensions
- Fragile Chinese property market
- PBoC rate cuts on Tuesday (1-year LPR at 3.00%, 5-year at 3.50%)
These factors continue to pose downside risks for the AUD, given Australia’s heavy trade exposure to China.
📊 CFTC Positioning: Bearish Pressure on AUD Eases
Data from the CFTC (as of May 13) indicates that speculative traders have reduced net short positions on the Aussie:
- Net shorts declined to around 49.3K contracts
- Open interest also dipped slightly
This shift suggests that while bearish sentiment remains, it’s showing early signs of stabilization.
🔍 AUD/USD Summary & Key Levels
| Level Type | Price Zone |
|---|---|
| Immediate Resistance | 0.6454 → 0.6514 → 0.6687 |
| Immediate Support | 0.6356 → 0.6303 → 0.5913 |
| Momentum Bias | Neutral to Bearish |
Traders should watch for:
- US PMI data releases
- Updates on US-China trade headlines
- Any surprise comments from RBA or Fed officials
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