Forex markets remain cautious as major currency pairs—AUD/USD, NZD/USD, and USD/JPY—react to renewed trade tensions and the upcoming release of key US inflation figures. Tariff announcements by the US administration have revived risk-off sentiment, while traders await macro data to guide the next moves.
🔸 AUD/USD Outlook: Consolidation Persists Amid Trade Turbulence
AUD/USD dipped toward 0.6550 as risk appetite weakened following a series of US tariff hikes. President Trump’s decision to impose a 30% duty on imports from the EU and Mexico, following earlier tariffs on Japan, South Korea, and copper, fueled demand for safe-haven assets—benefiting the US Dollar.
Despite this, the broader US Dollar Index (DXY) remains vulnerable near its long-term support of 96.50. Upcoming US inflation data could shift sentiment. A stronger CPI reading would likely lower expectations of a Fed rate cut in September, which could cap any AUD/USD rebound.
Meanwhile, the Australian employment report due Thursday is another major risk event. Weak job figures could revive RBA rate-cut bets and weigh further on the Aussie.
🔹 Technical Setup – Ascending Broadening Wedge
The 4-hour chart shows AUD/USD consolidating within an ascending broadening wedge, bounded by 0.6400 and 0.6650. A breakout above 0.6650 would confirm bullish continuation, supported by rising gold prices and DXY weakness. A drop below 0.6400 would signal renewed downside risk.
🔸 NZD/USD Forecast: Bullish Bias Strengthens Above 0.60
NZD/USD is trading in a bullish range between 0.5850 and 0.6100, as the pair benefits from moderate risk appetite and broader USD hesitation. Despite trade friction, the Kiwi has held firm above the psychological 0.60 barrier.
🔹 Technical View – Building Momentum
The 4-hour chart highlights bullish price action. A decisive break above 0.6100 would open the door to an extended rally, while a move below 0.5850 could reverse momentum, targeting the 0.5700 support level.
🔸 USD/JPY Analysis: Range-Bound as Yen Finds Support
USD/JPY remains capped between 142 and 151 despite broad USD strength. A resilient Japanese economy, reflected in stronger machine orders and tertiary activity data, has helped the Yen outperform other G10 currencies.
Markets are closely watching Japan’s CPI release and the BoJ’s July 31 policy meeting, where officials may raise inflation forecasts. This outlook, along with rising JGB yields and narrowing spreads with US Treasuries, supports further Yen strength.
🔹 Technical Picture – Neutral Bias Holds
The 4-hour chart shows USD/JPY stuck in a consolidation range between 140.00 and 151.00. A break below 140.00 could trigger a deeper correction, while a breakout above 151.00 would confirm a fresh bullish leg. Until then, the pair is expected to oscillate within this wide neutral band.
🧠 Final Thoughts
With US inflation data on deck and trade tensions heating up, volatility is expected to rise across AUD/USD, NZD/USD, and USD/JPY. Traders should brace for directional moves as technical patterns reach breakout zones and macroeconomic triggers unfold.
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