The Australian Dollar (AUD/USD) remains resilient, hovering around the 0.6500 psychological level despite pulling back from its six-month peak of 0.6537. A weaker US Dollar Index (DXY), now trading near 98.80, has provided short-term support as US fiscal concerns weigh on greenback sentiment.
However, the Reserve Bank of Australia (RBA) has adopted a dovish stance, having recently cut interest rates by 25 basis points. Governor Michele Bullock signaled a willingness to ease further if economic conditions deteriorate, limiting the Aussie’s upside.
Trade developments have added to the pair’s fragility. A 90-day truce in US-China tariff tensions initially lifted sentiment, but ongoing geopolitical strains—including Australia’s decision to revoke China’s Darwin Port lease—may reignite downside pressure on AUD.
Market Focus: Fed forward guidance, China-Australia relations, and US fiscal policy will likely determine near-term direction for AUD/USD.
🇳🇿 NZD/USD Outlook: Bullish Momentum Supported by Technical Rebound
The New Zealand Dollar (NZD/USD) is showing clear signs of bullish momentum, recovering strongly from long-term support at $0.5500. A decisive move above $0.6020—the current pivot level—would signal further bullish continuation, especially as global risk appetite improves.
Given the technical structure, the pair may benefit from any extended USD weakness or dovish Fed tone. Upside momentum in NZD/USD often correlates with similar moves in AUD/USD, reinforcing positive bias across both Oceanic currencies.
🇺🇸 USD/JPY Forecast: Pressure Mounts as US Debt Woes Undermine Dollar
The US Dollar/Japanese Yen (USD/JPY) has resumed its downward trajectory, trading below key technical levels due to persistent concerns about US fiscal stability. The pair is reacting to deteriorating confidence following the passage of Trump’s spending-heavy tax bill, which the CBO estimates will inflate the federal deficit by $3.8 trillion.
Further downward pressure stems from:
- Moody’s credit rating downgrade from Aaa to Aa1
- Forecasts of US debt reaching 134% of GDP by 2035
- Heightened Fed uncertainty, as officials issue mixed messages on inflation, tariffs, and future rate moves
As sentiment wavers, USD/JPY has broken below the 145.00 level and now eyes the long-term support around 140.00.
📉 Technical Chart Insights
🔺 AUD/USD Technical Analysis: Ascending Broadening Wedge
- Price range: $0.6390 to $0.6570
- Support: Long-term base at $0.5900
- Pattern suggests heightened volatility ahead with bullish potential if global risk sentiment stays positive
🔺 NZD/USD Technical Analysis: Rebound in Progress
- Support: $0.5500, Pivot: $0.6020
- Bullish momentum confirmed; break above pivot signals extended rally
🔻 USD/JPY Technical Analysis: Descending Broadening Wedge
- Failed breakout at 148.30
- Price continues to drift toward $140.00 key support
- A close below $140.00 may trigger fresh bearish acceleration
🔑 Key Factors to Watch This Week
| Pair | Key Drivers |
|---|---|
| AUD/USD | RBA rate outlook, US-China trade talks, Fed signals |
| NZD/USD | Risk sentiment, bullish technical setup, USD momentum |
| USD/JPY | US debt ceiling concerns, Fed speeches, geopolitical tension |
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