AUD/USD Climbs Toward Monthly High amid US-China Trade Talk
AUD/USD climbs toward the monthly high (0.6486) as officials from the US and China, Australia’s largest trading partner, meet in London to negotiate trade policy.
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Australian Dollar Outlook: AUD/USD
AUD/USD climbs toward the monthly high (0.6486) as officials from the US and China, Australia’s largest trading partner, meet in London to negotiate trade policy.
AUD/USD Climbs Toward Monthly High amid US-China Trade Talk
The narrowing threat of a US-China trade war may keep AUD/USD afloat as it instills an improved outlook for the Asia/Pacific region, and signs of a looming trade deal may push the Reserve Bank of Australia (RBA) to the sidelines following the 25bp rate-cut in May.
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In turn, AUD/USD may further retrace the decline from the November high (0.6688) following the V-shape recovery earlier this year, but little indications of a US-China trade deal may push the RBA to further unwind its restrictive policy as the ‘risks to inflation have become more balanced.’
With that said, failure to push above the monthly high (0.6486) may lead to a near-term pullback in AUD/USD, but the exchange rate may continue to register fresh yearly highs as it no longer rates within the May range.
AUD/USD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; AUD/USD on TradingView
- AUD/USD retraces the decline from the end of last week to approach the monthly high (0.6486), with a close above the 0.6510 (38.2% Fibonacci retracement) to 0.6520 (38.2% Fibonacci extension) region bringing 0.6590 (38.2% Fibonacci extension) on the radar.
- Next area of interest comes in the November high (0.6688), but lack of momentum to close above the 0.6510 (38.2% Fibonacci retracement) to 0.6520 (38.2% Fibonacci extension) region may push AUD/USD back toward the monthly low (0.6432).
- A move/close below 0.6410 (50% Fibonacci extension) may lead to a test of the May low (0.6357), with the next region of interest coming in around 0.6240 (61.8% Fibonacci extension).
Additional Market Outlooks
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Canadian Dollar Forecast: USD/CAD Drops as BoC Stays on Hold
US Dollar Forecast: USD/CHF Clears May Low
--- Written by David Song, Senior Strategist
Follow on X at @DavidJSong
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