Commodity-linked currencies like the Australian Dollar (AUD/USD) and New Zealand Dollar (NZD/USD) are finding upward momentum, while USD/JPY remains under heavy bearish pressure as renewed tariff tensions and weak U.S. economic indicators weigh on the greenback.
AUD/USD Battles Resistance Near 0.6500 as Tariff Concerns Boost Demand
The Australian Dollar reached an intraday high near $0.6500 early Tuesday, buoyed by weakness in the U.S. Dollar following a disappointing ISM Manufacturing PMI print and escalating U.S.-China trade tensions. However, AUD/USD faced a pullback after the RBA Meeting Minutes revealed a growing case for a 25bps rate cut, emphasizing a cautious policy stance.
Adding to the pressure, China’s Caixin Manufacturing PMI unexpectedly contracted to 48.3 in May, raising concerns over slowing demand from Australia’s top trading partner. As a result, AUD/USD dipped toward $0.6470, facing renewed difficulty in pushing past the key 0.6500 resistance zone.
USD/JPY Slides Toward Key 140 Level as Dollar Weakness Deepens
USD/JPY is under sustained selling pressure as bearish sentiment intensifies across the U.S. Dollar Index (DXY). Trump’s announcement to double tariffs on steel and aluminum imports further fueled risk-off sentiment. Meanwhile, the ISM manufacturing figure dropping to 48.5 from an expected 49.5 signals contracting economic activity, further eroding confidence in the greenback.
The pair is now drifting toward the critical 140.00 support, a level that, if breached, could trigger a deeper sell-off in USD/JPY amid intensifying bearish momentum.
NZD/USD Clears Resistance, Gaining Strength Above 0.6020
The New Zealand Dollar broke higher from the $0.6020 region, riding a wave of bullish sentiment as weakness in the USD continues to benefit higher-yielding and commodity currencies. NZD/USD has held firm above $0.58 support, and with bullish momentum building, the pair may continue advancing toward new short-term highs if current macro trends persist.
Technical Outlook
AUD/USD – Ascending Broadening Wedge Breakout
- AUD/USD is forming an ascending broadening wedge on the 4-hour chart.
- Strong resistance lies between 0.6500–0.6600.
- A breakout above 0.6500 may drive the pair toward 0.66, especially as the USD weakens.
NZD/USD – Breakout Signals Further Gains
- NZD/USD is breaking above a key $0.6020 resistance.
- Price action remains bullish above $0.58, pointing to possible continuation toward $0.61+.
USD/JPY – Bearish Wedge Breakdown in Play
- USD/JPY is trapped within a descending broadening wedge.
- The pair’s rejection from 148.30 suggests downside potential.
- A confirmed break below 142.00 opens the door toward the major 140.00 support area.
- A sustained break under 140 could accelerate losses, confirming a deeper bearish trend.
Final Thoughts
Rising geopolitical tensions, tariff escalations, and weaker-than-expected U.S. economic data have shifted momentum toward commodity currencies while dragging USD/JPY into bearish territory. With volatility rising, traders should watch for a decisive break in AUD/USD above 0.6500 or USD/JPY below 140.00, both of which may define the next major move in the forex markets.
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