AUD/USD Price Forecast: Looking for a stronger catalyst

The Australian Dollar (AUD) kept its constructive tone well and sound for yet another day on Thursday, driving AUD/USD up to the doorstep of 0.6400 despite renewed strength in the US Dollar (USD), all amid lingering excitement over the US–China trade saga.

Tariff turbulence

Fresh tariff salvos have kept investors on edge in the past few weeks. President Trump’s decision to slap duties of 10 %–50 % on a swath of imports, and a headline‑grabbing 145 % rate on select Chinese goods, rekindled fears of a full‑blown trade war.

Because Australia’s economy is tightly linked to China, each escalation lands disproportionately on the Aussie, which only recently plunged to multi‑year lows after Beijing retaliated with its own levies.

Policy pulse

The Federal Reserve (Fed) left rates at 4.25 %–4.50 % in March, citing the twin risks of stubborn inflation and cooling growth.

On Wednesday, markets took Powell’s remarks as a blow to hopes for near‑term easing after he stressed that the Fed’s primary task was anchoring inflation expectations and preventing one‑off price shocks from turning into persistent inflation. He said the central bank would still weigh its dual mandate but argued that lasting job gains are impossible without price stability. Powell also warned that tariff‑driven stagflation could force the Fed to juggle conflicting goals, in which case policymakers would judge how far the economy was from each mandate and over what time frame those gaps might close.

Meanwhile, the Reserve Bank of Australia (RBA) kept its cash rate parked at 4.10 % earlier in the month. Governor Michele Bullock argued that sticky inflation and a still‑tight labour market justify patience, trimming the probability of a May rate cut to about 70 %.

Positioning radar

CFTC data show net‑long Aussie contracts sliding to a four‑week low near 63K, even as total open interest climbs. The shift underscores bearish undercurrents that recently dragged AUD/USD into the 0.5900 zone, territory last visited in early 2020.

Chart watch

The pair remains on the back foot as long as it trades beneath the 200‑day simple moving average at 0.6477.

A decisive move higher would eye the 2025 peak at 0.6408 (February 21), then the November 2024 high at 0.6687 (November 7).

The other way around, failure to hold the yearly bottom at 0.5913 (April 9) could open a slide toward the 2020 low of 0.5506 (March 19).

Momentum signals are mixed: the Relative Strength Index (RSI) near 59 hints at further upside potential, while an Average Directional Index (ADX) around 15 warns the rally lacks real bite.

AUD/USD daily chart

Big picture

With trade rhetoric heating up and both the Fed and the RBA staying wary, the Australian dollar is highly sensitive to every tariff headline and data surprise. Volatility is unlikely to fade until the dust settles—or the next tariff lands.