AUD/USD Holds Firm Above 0.6450 as Political Stability and USD Weakness Boost Aussie Dollar

The AUD/USD pair is holding gains above the 0.6450 level in Monday’s Asian session, supported by renewed investor confidence following Australian Prime Minister Anthony Albanese’s re-election and a weaker U.S. Dollar amid tariff-related uncertainty and pre-FOMC positioning.

Political Stability in Australia Lifts Aussie Sentiment

The Australian Dollar received a boost after Prime Minister Albanese secured a second term, reinforcing political stability—a key factor supporting market confidence. The development came at a time when global investors are closely watching geopolitical shifts and their influence on regional currencies.

US Dollar Retreats on Tariff Jitters and Fed Repositioning

The U.S. Dollar Index (DXY) fell sharply toward 99.75 amid rising uncertainty around potential U.S.-China trade talks. Beijing’s commerce ministry recently signaled openness to negotiations, provided Washington lifts unilateral tariffs—sparking risk-on sentiment that weighed on the Greenback.

As tensions ease between the U.S. and China, currencies closely tied to Chinese trade, like the Australian Dollar, tend to benefit. Given that China is Australia’s largest trading partner, such developments directly influence AUD/USD strength.

Investors Await U.S. Nonfarm Payrolls (NFP)

Focus now shifts to the upcoming U.S. Nonfarm Payrolls data for April, expected at 130,000, sharply lower than March’s 228,000. A softer labor report could amplify USD selling pressure, potentially pushing AUD/USD higher.

Technical Analysis: AUD/USD Eyes 0.6500 Breakout

• Range: AUD/USD has been consolidating between 0.6340 and 0.6450 for the past two weeks.
• EMA Support: The pair trades near the 200-day EMA at 0.6407, signaling a neutral-to-bullish structure.
• RSI Signal: The 14-day RSI hovers around 60.00 — a break above this level would confirm bullish momentum.
• Key Resistance Levels:
  • 0.6456 (Dec 5 high) – breakout point
  • 0.6500 – psychological resistance
  • 0.6550 – November 25 high
• Support Levels:
  • 0.6187 – March 4 low
  • 0.6087 – February low
  • 0.6000 – psychological barrier

Conclusion

The AUD/USD outlook remains cautiously bullish as political stability in Australia and weakening USD sentiment support the pair. A break above 0.6456 could pave the way toward 0.6500 and beyond, while soft U.S. payroll data could act as a catalyst. However, traders should remain vigilant for any surprises from the Fed or trade negotiations this week.

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