On Monday, AUDUSD briefly threatened a breakout from its May trading range, evident between 0.6356 (May 12th low) up to 0.6514 (May 7th high) with an early push up to a new monthly peak of 0.6537 on the Asia open. However, that move failed quickly after news of President Trump’s decision to extend the deadline for 50% tariffs on the EU from June 1st to July 9th hit the newswires.
While this update boosted risk sentiment and global stock prices, it removed the immediate downside pressure that had been starting to build again on the US dollar. AUDUSD has since fallen victim to position rebalancing which saw prices fall as low as 0.6407 on Wednesday, before a slightly higher than expected Australian CPI reading, led to some fresh buying.
Looking forward, with their short term trade concerns alleviated further this morning by a US Court ruling that the vast majority of President Trump's global tariffs were illegal, the question for traders into the end of the week, is whether AUDUSD can hold current levels and push higher again, or if it could retest the bottom of its May trading range at 0.6356, perhaps even further.
After all, market pricing currently places the chances of another rate cut from the RBA at their next meeting in early July at about 70%, which continues to weigh on AUDUSD if any new strength is seen.
Friday’s release of the Fed’s preferred inflation gauge (PCE Index) could also be relevant to the direction of the dollar (and therefore impact AUDUSD) into the weekend. Traders are waiting to see if inflation is still moderating or whether there are signs that President Trump’s tariffs are starting to push prices higher again.
Technical Update – More Balanced Themes Emerge
It might have been argued that on May 26th 2025, AUDUSD was attempting to break higher, especially as moves above 0.6519, the May 7th previous price high were seen.
However, as the chart below shows, this proved to be a failed breakout, as selling pressure quickly emerged, meaning the 0.6519 upside extreme held on a closing basis.
An inability of AUDUSD buyers to extend recent price strength is suggested by this activity, resulting in the development of a possible sideways price range.
This also appears to be supported by the current Bollinger Bands set-up, where the mid-average is flat and the bands are parallel to it.
This highlights something of a decision-making process between both buyers and sellers, with a closing breakout of either required to suggest the direction of the next more sustained phase of price activity.
What technical levels might AUDUSD traders find useful to watch?
Potential Resistance Levels:
Upper extremes of the current sideways range could now be marked by 0.6519/37, which is combination of the May 7th and May 26th price highs, levels where sellers have previously been active and may be again.
While any close above the 0.6519/37 resistance is not a guarantee of further upside, it may then lead to price strength towards 0.6688, the November 7th 2024 high.
Potential Support Levels:
With current evidence suggesting AUDUSD is developing a more balanced range, traders may well be focusing on the last correction price low, as the lower limit of the range. If this is the case, 0.6357 the May 12th 2025 session low, might be the support to monitor.
Closes under 0.6357, if seen, may then be an indication of a deeper decline in price, possibly towards 0,6298, which is equal to the 38.2% Fibonacci retracement of April 9th to May 26th 2025 strength, even the 50% retracement level which stands at 0.6224.
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
While this update boosted risk sentiment and global stock prices, it removed the immediate downside pressure that had been starting to build again on the US dollar. AUDUSD has since fallen victim to position rebalancing which saw prices fall as low as 0.6407 on Wednesday, before a slightly higher than expected Australian CPI reading, led to some fresh buying.
Looking forward, with their short term trade concerns alleviated further this morning by a US Court ruling that the vast majority of President Trump's global tariffs were illegal, the question for traders into the end of the week, is whether AUDUSD can hold current levels and push higher again, or if it could retest the bottom of its May trading range at 0.6356, perhaps even further.
After all, market pricing currently places the chances of another rate cut from the RBA at their next meeting in early July at about 70%, which continues to weigh on AUDUSD if any new strength is seen.
Friday’s release of the Fed’s preferred inflation gauge (PCE Index) could also be relevant to the direction of the dollar (and therefore impact AUDUSD) into the weekend. Traders are waiting to see if inflation is still moderating or whether there are signs that President Trump’s tariffs are starting to push prices higher again.
Technical Update – More Balanced Themes Emerge
It might have been argued that on May 26th 2025, AUDUSD was attempting to break higher, especially as moves above 0.6519, the May 7th previous price high were seen.
However, as the chart below shows, this proved to be a failed breakout, as selling pressure quickly emerged, meaning the 0.6519 upside extreme held on a closing basis.
An inability of AUDUSD buyers to extend recent price strength is suggested by this activity, resulting in the development of a possible sideways price range.
This also appears to be supported by the current Bollinger Bands set-up, where the mid-average is flat and the bands are parallel to it.
This highlights something of a decision-making process between both buyers and sellers, with a closing breakout of either required to suggest the direction of the next more sustained phase of price activity.
What technical levels might AUDUSD traders find useful to watch?
Potential Resistance Levels:
Upper extremes of the current sideways range could now be marked by 0.6519/37, which is combination of the May 7th and May 26th price highs, levels where sellers have previously been active and may be again.
While any close above the 0.6519/37 resistance is not a guarantee of further upside, it may then lead to price strength towards 0.6688, the November 7th 2024 high.
Potential Support Levels:
With current evidence suggesting AUDUSD is developing a more balanced range, traders may well be focusing on the last correction price low, as the lower limit of the range. If this is the case, 0.6357 the May 12th 2025 session low, might be the support to monitor.
Closes under 0.6357, if seen, may then be an indication of a deeper decline in price, possibly towards 0,6298, which is equal to the 38.2% Fibonacci retracement of April 9th to May 26th 2025 strength, even the 50% retracement level which stands at 0.6224.
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.