The AUD/USD currency pair has come off the worst so far despite a relatively rosy risk tone in global equities. Recent reports indicate that while optimism surrounds de-escalating trade tensions between major economies, the AUD/USD exchange rate has remained under pressure, prompting analysts to assess the factors influencing this trend.
Amid high-level, if strangely passive-aggressive, discussions between Beijing and Washington, trade relations grow cautiously more optimistic. Those promised negotiations have still not started and that’s left a vacuum in the market. This scene is fueling the generally bearish (for the AUD) price action recently seen in the AUD/USD currency pair.
In addition to the above factors, some recent economic indicators have weighed on market sentiment. Prior to this, first-time Jobless Claims for the week ending April 26 jumped to 241,000 vs the predicted 224,000. This spike indicates growing labor market fragility, which may further shape investor sentiment. Indeed, the April ISM Manufacturing Purchasing Managers’ Index (PMI) fell to 48.7. This drop points to continued contraction in the manufacturing sector and further darkened the economic outlook.
Technical analysis indicates that the AUD/USD pair faces strong resistance at the mildly bearish 200 Simple Moving Average (SMA). This average is low, and is currently set at 0.6460. The 20/100 SMA convergence here near 0.6290 suggests an important area traders will want to watch closely. The AUD/USD pair now trades around 0.6400, below a flat 20 SMA. This move marks a dangerous omen of possible bearish trend to come in the near term.
The current trading environment finds the AUD/USD pair in a state of consolidation. It’s buoyed near its multi-year ceiling of 0.6450, attained both in 2025. The duo made it to the top, but not without experiencing some bumps in the road. Currently, it is testing 0.6365, a fresh weekly low set on Thursday. The bottom of this range is pegged at 0.6342. This level is the low from April 24 and forms first-line support for day traders.
Australia announced a trade balance surplus of 6,900 million for March. Exports were up by 7.6% while imports dropped by 2.2%. This positive trade balance should have pushed up the Australian dollar. It is small comfort given the much more worrisome economic signals seen in last week’s jobless claims and manufacturing data.
The pair’s next major support level is at 0.6340, which is likely key for the AUD/USD pair. If the pair finds close sustainability below this level, it might mean more downsides. The placement of the 100 SMA, moving under the market but yet still above the 200 SMA, indicates stronger bearish potential.