AUD/USD Price Analysis – April 22, 2025
Daily Price Outlook
During the European trading session, the AUD/USD currency pair failed to extend its previous upward rally and lost traction, falling below the 0.6400 level. This was mainly due to growing concerns about economic uncertainty in the US and rising global trade tensions.
The Australian Dollar had previously gained strength against the US Dollar, but the market was rattled by fresh criticism of the Federal Reserve from US President Donald Trump. This added to fears about the Fed's independence, leading to increased market unease.
US Economic Uncertainty and Fed's Independence Concerns Impact USD
Global market sentiment has turned cautious following comments from White House economic advisor Kevin Hassett. He revealed that President Trump was considering whether he had the authority to remove Fed Chair Jerome Powell.
Trump's public criticism of Powell for his reluctance to lower interest rates raised concerns about potential political interference in the Federal Reserve’s decision-making process.
On his Truth Social platform, Trump warned that if Powell did not act swiftly to cut interest rates, the US economy could face a slowdown.
These remarks heightened fears that the US Dollar could be subjected to political pressure, contributing to its decline.
Apart from this, the situation was also complicated by the ongoing deadlock in global trade talks. While the US imposed heavy tariffs on Chinese imports, there were signs of potential progress, with Trump suggesting a trade deal might be possible in the coming weeks.
However, the uncertainty surrounding trade relations and tariffs continued to weigh on market confidence, putting additional downward pressure on the US Dollar.
Therefore, the uncertainty surrounding US economic policies and trade tensions has weakened the US dollar, boosting the AUD/USD pair as investors seek safer, higher-yielding assets like the Australian Dollar.
Trade Tensions and Global Economic Outlook Weigh on Market Sentiment
On the US front, the US Dollar Index (DXY), which tracks the Greenback against six major currencies, continued its downward slide, trading near 98.10. This decline was driven by growing concerns over US economic uncertainty and ongoing trade tensions with China.
Trump’s suggestion to investigate critical mineral imports added to fears of slower economic growth and rising inflation, further weakening sentiment towards the US Dollar.
Moreover, the Federal Reserve’s cautious stance on monetary policy weighed on the USD. Fed Chair Jerome Powell highlighted the challenges the central bank could face in balancing economic growth and inflation, increasing the risk of stagflation. This uncertainty around the Fed’s actions has left markets uneasy, putting further downward pressure on the US Dollar.
Therefore, the decline in the US Dollar, driven by economic uncertainty, trade tensions, and the Fed's cautious stance, has supported the Australian Dollar, pushing the AUD/USD pair higher as investors seek alternatives.
AUD Supported by Global Economic Uncertainty and Domestic Resilience
On the other hand, the Australian Dollar has gained slight support as previously released mixed Australian data kept investors hopeful. While Australia’s unemployment rate rose to 4.1% in March, slightly lower than expected, the employment report showed a positive increase of 32.2K jobs.
However, the Westpac Leading Index, which tracks economic momentum, dropped to 0.6% in March from 0.9% in February, suggesting slower economic growth in Australia.
Despite these mixed signals, the Australian dollar has found some support due to global economic uncertainty and expectations that the Reserve Bank of Australia (RBA) may hold off on further rate cuts.
RBA meeting minutes indicated there is no immediate decision on monetary policy changes, with both risks and opportunities facing the Australian economy.
AUD/USD – Technical Analysis
AUD/USD remains in a bullish structure, trading within an ascending channel and holding above the 50-period SMA at 0.6385. The pair recently bounced from a confluence support zone near 0.6409 and is currently attempting another push toward the upper channel boundary around 0.6452.
The technical setup remains constructive as long as price sustains above the 0.6409 breakout level, now acting as immediate support. The RSI stands at 61.63 — neutral to bullish — showing potential for continued upward momentum without being overbought.
A sustained break above 0.6452 could expose the next resistance at 0.6471, while failure to hold above 0.6409 may lead to a drop toward the 0.6387–0.6385 support area.
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