AUD/USD slides as US trade policy uncertainty drives forex turbulence

crypthub

about 9 hours ago

Market Reaction

The AUD/USD pair slid to multi‑week lows as uncertainty over U.S. trade policy spooked investors. Risk‑off sentiment drove capital toward the dollar, pressuring the Australian currency. Volatility rose about 25 % in the last five sessions, reflecting heightened market stress.

Technical Outlook

Prices broke below the 50‑day and 100‑day moving averages, turning them into resistance zones. The RSI entered oversold territory and a descending triangle formed on the four‑hour chart, signalling further downside. Key support near 0.6500‑0.6480 is now under test.

Economic Implications

A weaker AUD raises costs for Australian importers and may push consumer prices higher. Exporters gain a price edge, but volatile rates complicate hedging for SMEs. The move adds inflationary pressure, influencing the Reserve Bank of Australia’s policy calculus.

Historical Context & Outlook

Similar currency drops occurred during the 2018‑19 trade war, the 2020 pandemic shock, and 2023‑24 tariff debates. Future direction hinges on clearer U.S. trade signals and broader global trends. Traders and policymakers will continue to monitor the pair closely.