AUD/USD, NZD/USD, and USD/JPY Outlook: RBA Rate Cut and Fed Cues in Spotlight

Key Highlights:

AUD/USD and NZD/USD remain under pressure ahead of the RBA’s rate decision.
USD/JPY rebounds from key support as the US Dollar strengthens amid rising risk aversion.
Market focus is on central bank policy guidance and upcoming US tariff decisions.

AUD/USD Drops Ahead of Expected RBA Rate Cut

The Australian Dollar continues to slide for a third consecutive session, with AUD/USD dipping below 0.6550 and testing support near 0.6485. This weakness is largely driven by growing expectations that the Reserve Bank of Australia (RBA) will cut interest rates by 25 basis points on Tuesday, lowering the Official Cash Rate from 3.85% to 3.60%—its third cut this year.

The RBA’s dovish stance is supported by:

Slowing inflation (Q1 CPI steady at 2.4%)
Weak GDP growth (+0.2% in Q1)
Easing services inflation and sluggish domestic demand

Combined with renewed US tariff concerns, market risk sentiment has deteriorated, boosting safe-haven demand for the US Dollar and adding downside pressure on AUD/USD.

The RBA’s policy guidance will be critical. Any signals of continued easing could push AUD/USD lower, especially if trade tensions escalate further.

USD/JPY Climbs as US Dollar Recovers

USD/JPY has rebounded from the long-term support zone near 142, supported by a broader US Dollar recovery. The DXY Index is approaching 97.30, reflecting waning expectations for near-term Fed rate cuts and a shift toward safe-haven flows.

As global markets grow cautious ahead of the July 9 tariff deadline, investor demand for the Greenback increases. Although the Japanese Yen sees some haven inflows, the Dollar’s strength is currently dominating the pair’s price action.

If Fed officials continue to push back on immediate easing, and tariff uncertainty lingers, USD/JPY could climb toward the 151 level, a key technical resistance.

Technical Setups

AUD/USD – Ascending Broadening Wedge (4H Chart)
AUD/USD is consolidating within an ascending broadening wedge pattern. As long as the pair holds above the 0.6400 level, the structure remains intact. A breakout above 0.6650 would signal bullish continuation.

NZD/USD – Bullish Price Structure (4H Chart)
NZD/USD is forming a series of higher lows above 0.5850, with resistance near 0.6100. A clear breakout above this level could open the path toward further gains.

USD/JPY – Rebound from Key Support (4H Chart)
The pair has broken out of a descending broadening wedge, rebounding from long-term support near 142.00. A sustained move above 151.00 would validate a bullish breakout and could trigger strong upward momentum.

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Yasher Rizwan