Australian Dollar Trading Range: Tariff Issues Offset Key RBA‑Fed Divergence

crypthub

about 6 hours ago

Range and Technical Profile

AUD/USD has been confined between 0.6650 and 0.6750 since January 2025, testing both edges repeatedly. The 100‑day moving average sits near 0.6702, acting as a midpoint, while primary resistance clusters at 0.6745‑0.6755 and support at 0.6650‑0.6660. Trading volume spikes at the extremes, indicating institutional activity that reinforces the bracket.

RBA‑Fed Policy Divergence

The Reserve Bank of Australia remains hawkish, keeping rates at 4.35% with prospects of further tightening due to persistent inflation and strong wage growth. In contrast, the Federal Reserve is signaling cuts of up to 75 bps in 2025, creating a widening interest‑rate gap that traditionally favours the Australian dollar. This monetary split should generate upward pressure on AUD/USD.

Tariff Pressures and Counterbalancing Forces

Escalating global tariffs on iron ore, agricultural products, education and tourism shave export revenue and dampen demand for the AUD. Mixed commodity signals—solid iron‑ore prices but softer base metals—along with shifting risk sentiment add further restraint. The bearish trade‑policy impact offsets the bullish policy differential, keeping the pair locked in its current range.