The Australian Dollar (AUD) continues to outperform major peers on Friday, supported by improving market sentiment. The AUD/USD pair has erased early-week losses and is heading for its fourth consecutive daily gain, hovering near 0.6530 — just shy of weekly highs — and on track for a nearly 1% rise this week.
AUD/USD Technical Outlook
The pair is trading around 0.6525, maintaining a bullish tone on the daily chart. The 14-day Relative Strength Index (RSI) remains above the 50 midpoint, indicating strengthening upside momentum. Additionally, prices are holding above the nine-day Exponential Moving Average (EMA), reinforcing near-term bullish sentiment.
- Upside targets: Initial resistance sits at the psychological 0.6600 handle, followed by the nine-month high at 0.6625 (July 24 peak).
- Downside supports: The nine-day EMA at 0.6501 aligns with the 50-day EMA at 0.6498. A break below this zone could open the door toward the two-month low of 0.6419 (August 1) and the three-month low at 0.6372 (June 23).
Fundamental Drivers
China’s trade resilience boosts the Aussie
The AUD drew support from upbeat Chinese trade data released Thursday. Exports surged 8% year-on-year in July, accelerating from June’s 7.2% growth, while the trade surplus widened to CNY 705.1 billion from CNY 585.96 billion. These figures suggest China — Australia’s largest trading partner — is showing resilience against US tariffs, lifting investor confidence in the regional growth outlook.
US Dollar weighed by Fed uncertainty
Meanwhile, the US Dollar remains pinned near weekly lows as speculation swirls over potential leadership changes at the Federal Reserve. Markets are closely watching the possibility of Governor Christopher Waller replacing Jerome Powell, while Stephen Miran is expected to fill Adriana Kugler’s vacant seat on the Fed Board.
Adding pressure to the USD, US Initial Jobless Claims rose by 8,000 to 226,000 last week, surpassing the market’s 221,000 forecast and signaling a cooling labor market.
Although St. Louis Fed Governor Raphael Bostic pushed back against aggressive September rate cut bets — citing tariff-related risks — traders still price in close to a 90% probability of a Fed rate cut after summer, keeping the greenback under pressure.
Stay Updated with Daily Forex Pakistan.