- The AUD/USD outlook shows a strong Aussie despite growing RBA rate cut bets.
- Trump’s reciprocal tariff will not come immediately.
- Market participants are looking forward to the US retail sales report.
The AUD/USD outlook shows a strong Aussie despite increasing expectations for a Reserve Bank of Australia rate cut rates next Tuesday. The Australian dollar was steady as the dollar fell due to easing tariff concerns.
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A Reuters poll found that 90% of economists expect the Reserve Bank of Australia to implement its first rate cut next week. The central bank will be among the last to start its easing cycle. However, interest rates in Australia did not rise as much as in other major economies. Therefore, the central bank has a short way to go.
Recent data has created the right conditions for a rate cut, with inflation reaching 2.4%. If this trend continues, policymakers might shift to a more dovish tone, weakening the Aussie. However, the survey had little impact on Australia’s currency as market participants focused on Trump’s tariffs.
The US President has promised a reciprocal tariff on all countries with duties on US goods. However, this tariff will not come immediately as the administration is still formulating implementation plans. This brief respite led to a decline in the dollar, allowing its peers like the Aussie to climb. Market participants are now looking forward to the US retail sales report to see the state of consumer spending. This report will give clues on future policy moves.
AUD/USD key events today
- US core retail sales m/m
- US retail sales m/m
AUD/USD technical outlook: Bulls eying 0.6350
On the technical side, the AUD/USD price has broken above the 0.6300 key resistance level to make a higher high. The price trades above the 30-SMA with the RSI above 50, suggesting a strong bullish bias.
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After a solid surge, the price paused below the 0.6300 resistance. Here, the price consolidated, chopping through the 30-SMA as bulls attempted to break above the resistance. The breakout has solidified the bullish bias by clearing the path to the 0.6350 level. The bullish trend will continue if the price breaks above this level and makes higher highs and lows.
Meanwhile, if the level holds firm, the price might drop to retest the 0.6300 level as support. A break below the 30-SMA would confirm a bearish shift in sentiment.
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