The Australian Dollar (AUD) to United States Dollar (USD) currency pair has rebounded from its five-year low. On Tuesday morning, the pair traded around 0.6200 in the European markets. Despite this recovery, the pair remains stagnant below the 20-day simple moving average (SMA) of 0.6230 for the fourth consecutive session. This stagnation is compounded by an array of market pressures, including ongoing global trade tensions and fluctuating market indicators.
The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) continue to stretch within the bearish territory, suggesting persistent selling pressures on the AUD/USD pair. Meanwhile, the rebound in the stochastic oscillator casts doubt on any significant market recovery. Additionally, aggressive rate cut bets by the Reserve Bank of Australia (RBA) are adding further weight on the Aussie, with an 80% probability of a rate cut this month.
The global economic landscape remains tense as US President Donald Trump's tariffs on China have officially commenced, prompting retaliatory counter-tariffs from Beijing. These developments have fueled fears of a prolonged trade war, contributing to the market's uncertainty. The EUR/USD pair is experiencing sizeable losses, trading near 1.0300 in early European hours on Tuesday.
In other markets, gold prices are consolidating their recent gains after reaching a record high on Monday. The XAU/USD pair remains an area of focus for investors seeking safe-haven assets amid global uncertainties. Meanwhile, US bond yields are rebounding, leading to a modest uptick in the USD.
Cryptocurrency markets are not immune to the ripple effects of trade tensions. XRP's weighted sentiment and funding rates have plunged to significant low levels, hinting at a potential market bottom. However, XRP investors have realized nearly $2 billion in profits over the past three days following Trump's tariffs on Canada, Mexico, and China.
The AUD/USD pair faces a critical juncture as it remains below the 20-day SMA. Should this rejection persist, analysts suggest that the pair may drift lower to test the 0.6100 mark. The ongoing trade war fears and aggressive RBA rate cut bets are likely to play pivotal roles in shaping the AUD/USD's trajectory in the coming weeks.