AUD/USD and NZD/USD are showing signs of consolidation, while USD/JPY trades cautiously as investors closely monitor the US-China trade negotiations in London. Here’s a closer look at the key market movers and technical setups.
🇦🇺 Australian Dollar Holds Ground as US-China Talks Continue
The Australian Dollar (AUD) is maintaining upward momentum against the US Dollar (USD), marking its second consecutive day of gains. The recovery is supported by hopes for a breakthrough in the ongoing US-China trade discussions taking place in London.
Australia’s Westpac Consumer Confidence Index edged up by 0.5% in June, slowing from May’s 2.2% increase. The uptick reflects cautious optimism driven by recent interest rate cuts from the Reserve Bank of Australia (RBA) and expectations of easing inflation. However, subdued consumer sentiment and sluggish domestic growth continue to cap gains.
China, a major trading partner of Australia, also released mixed economic data. While Chinese CPI contracted 0.1% year-on-year in May and PPI fell by 3.3%, exports surged 6.3%—providing a modest boost to the Aussie. Traders are waiting for stronger signs of Chinese demand recovery to support sustained AUD/USD strength.
🇺🇸 Dollar Outlook: Economic Data Mixed, Political Drama Adds Pressure
The US Dollar Index (DXY) hovered around the 99.00 mark on Tuesday, as market participants weighed softer inflation expectations against a slightly stronger-than-expected jobs report.
- Nonfarm Payrolls increased by 139K in May, beating expectations of 130K.
- Unemployment Rate held steady at 4.2%.
- Wage growth remained firm at 3.9%.
These figures helped limit downside in the USD but were overshadowed by broader concerns over US fiscal policy and monetary uncertainty. President Trump’s renewed pressure on the Federal Reserve to slash rates, combined with a newly passed tax-and-spending bill in Congress, sparked fears of rising deficits and pressured bond markets—putting additional downward pressure on the dollar.
📉 AUD/USD Technical Outlook – Watching $0.6600 Resistance
AUD/USD is currently trading within an ascending broadening wedge on the 4-hour chart, with support near $0.6430 and resistance at $0.6600. While the pair remains supported by global trade optimism, upside potential could remain limited unless China posts stronger macro data or US inflation figures disappoint sharply.
- Upside Breakout: Above $0.6600 may lead to a surge toward $0.6750.
- Downside Risk: Below $0.6430 may open room to retest $0.6300.
📈 NZD/USD Technical Outlook – Bullish Breakout Developing
The Kiwi is displaying bullish price action after bouncing from long-term support at $0.55. Currently trading above $0.58, NZD/USD has cleared the $0.6020 hurdle, signaling more upside in the near term.
- Next Resistance: $0.6120, followed by $0.6250.
- Key Support: $0.5900 and $0.5800 levels.
💹 USD/JPY Technical Setup – Descending Wedge Signals Volatility
USD/JPY continues to trade within a descending broadening wedge pattern, with support holding around the 142.00 level. Multiple rebounds suggest a near-term bottom could be forming.
- Bullish Confirmation: A breakout above 148.30 could lead to a rally toward 151.00.
- Key Resistance: 151.00 – a breakout here could trigger a significant trend reversal.
🔮 Final Thoughts
Currency markets remain tightly linked to global macro headlines, particularly trade developments between the US and China. AUD/USD and NZD/USD are attempting to build on recent strength, but momentum may remain capped without further supportive economic data. USD/JPY is approaching a pivotal technical area that could determine the next major move.
Stay tuned as upcoming US CPI figures, central bank updates, and trade news are likely to drive volatility across these pairs.
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