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Australian Dollar picks up amid easing geopolitical tensions, bright data from China

  • AUD/USD hits session highs at 0.7070, although it remains near eight-week lows.
  • Bright Trade Balance data from China has provided a moderate impulse to the Aussie.
  • Markets show some relief as hostilities in the Middle East stop.

The Australian Dollar (AUD) posts moderate gains against the US Dollar (USD) on Tuesday, regaining some of the ground lost last week, although it remains at its lowest level in nearly two months. News that Israel and Iran halted hostilities has triggered a mild relief rally. At the same time, upbeat Chinese trade data has provided additional support for the Aussie, as China is Australia’s major trading partner.

Data released by the Chinese Government earlier on Tuesday showed that the Asian giant’s trade surplus rose to USD 105.43 billion in May, its highest level since January and well beyond market expectations of USD 92.1 billion. In April, China’s trade surplus amounted to USD 84.82 billion.

China’s exports bloom with the AI rush

In May, exports showed a 19.4% year-over-year (y-o-y) growth, following a 14.1% increase in April, also beating expectations of a 15% increment. Strong demand for chips, amid the sharp increase in AI investment, has been the main driver for May’s surplus, offsetting the negative impact of the energy shock on global demand.

Imports also accelerated, with a 27.4% year-on-year increase in May after 25.3% year-on-year growth in April, suggesting that domestic demand is picking up pace after months of sluggish consumer spending.

Meanwhile, news reporting a pause in the hostilities between Israel and Iran has triggered a moderate pullback in Oil prices, providing a mild risk-appetite. US President Donald Trump affirmed earlier on Tuesday that he might have a proposal for a peace agreement with Iran and showed optimism about an upcoming deal.

In the US, the strong macroeconomic figures released last week, namely Friday’s Nonfarm Payrolls report, have boosted expectations that the Fed will be able to hike interest rates in the second half of the year, if inflationary pressures remain high. In that sense, the US Consumer Price Index (CPI) release, due on Wednesday, will be key to confirm the market’s expectations and is likely to set the US Dollar’s near-term direction.

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AUD/JPY Strengthens above 113.00, hawkish RBA supports uptrend above 100-day SMA

  • AUD/JPY gains ground to near 113.05 in Monday’s early Asian session. 
  • Positive outlook for the cross prevails above the 100-day SMA, further consolidation cannot be ruled out with fading RSI momentum. 
  • The first upside barrier emerges at 113.90; the initial support level to watch is 112.90. 

The AUD/JPY cross trades in positive territory around 113.05 during the early European trading hours on Monday. A hawkish stance from the Reserve Bank of Australia (RBA) underpins the Australian Dollar (AUD) against the Japanese Yen (JPY). 

RBA Governor Michele Bullock last week emphasized that the Australian central bank remains strictly focused on curbing inflation, following three interest rate hikes earlier this year that pushed the cash rate to 4.35%. Bullock further stated that inflation is too high, and the board will do what it considers necessary to achieve our mandate to deliver price stability and full employment.

However, the potential upside for the cross might be limited amid intervention fears from Japanese authorities. Japanese Finance Minister Satsuki Katayama said on Friday that officials are monitoring the situation and reserve the right to take “decisive action” and “respond appropriately at any time” against excessive volatility. 

Chart Analysis AUD/JPY

Technical Analysis:

In the daily chart, AUD/JPY holds in a constructive stance above the 100-day simple moving average, while the Bollinger lower band adds nearby downside protection, keeping the broader uptrend intact despite the recent pullback from highs. The Relative Strength Index (RSI) at 43.94 has slipped below the neutral 50 line, hinting at fading bullish momentum but not yet signaling a decisive trend reversal as price still sits comfortably over the major average.

On the topside, initial resistance emerges at the Bollinger middle band around 113.90, with the Bollinger upper band at 114.90 acting as the next bullish target if buyers regain control. On the downside, a daily close back under the 112.90 lower band would expose the 100-day SMA at 111.60, where stronger demand would be expected to appear while the medium-term bullish structure remains in place above that level.

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Australia Q1 GDP misses expectations: What 0.3% growth means for AUD/USD

Australia’s Gross Domestic Product (GDP) rose 0.3% QoQ in the first quarter (Q1) of 2026 compared with the 0.8% growth in the fourth quarter of 2025, the Australian Bureau of Statistics (ABS) showed on Wednesday. This reading came in weaker than the expectations of 0.5% expansion. The annual first-quarter GDP grew by 2.5%, compared with the 2.6% growth in Q4, while below the market onsensus of a 2.7% increase.

The Australia GDP report came in worse than anticipated and drags the Australian Dollar lower in an immediate reaction. The AUD/USD pair is trading at 0.7175, losing 0.04% on the day. The pair is edges lower from Monday’s closing price at 0.7180.

(This story was corrected on June 3 at 02:00 GMT to say that the annual first-quarter GDP grew by 2.5%, compared with the 2.6% growth in Q4, not the annual fourth-quarter)

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.00%-0.02%-0.05%-0.01%0.03%-0.13%0.03%
EUR-0.01%-0.04%-0.04%-0.01%0.02%-0.15%0.03%
GBP0.02%0.04%0.02%0.02%0.06%-0.12%0.06%
JPY0.05%0.04%-0.02%0.00%0.05%-0.15%0.05%
CAD0.00%0.00%-0.02%-0.01%0.04%-0.13%0.04%
AUD-0.03%-0.02%-0.06%-0.05%-0.04%-0.18%0.02%
NZD0.13%0.15%0.12%0.15%0.13%0.18%0.18%
CHF-0.03%-0.03%-0.06%-0.05%-0.04%-0.02%-0.18%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

What do Australia’s GDP data mean for the Australian Dollar?

Australia’s Gross Domestic Product (GDP) is one of the most important indicators for the Australian Dollar (AUD) because it measures the overall health and growth of the economy. The weaker-than-expected GDP data might lead markets to expect a more dovish stance from the Reserve Bank of Australia (RBA). However, if risk sentiment improves, this might help limit the Aussie losses as capital flows toward the riskier assets.

Technical Analysis: AUD/USD maintains positive outlook

Chart Analysis AUD/USD

In the daily chart, AUD/USD holds a constructive near-term bias as price trades well above the 100-day exponential moving average (EMA), suggesting the broader upswing remains supported despite recent consolidation. The Relative Strength Index (RSI) around 52 keeps a neutral-to-positive tone, hinting that bullish momentum is modest but still intact rather than overstretched.

On the downside, initial support is seen at the 100-day EMA near 0.7038, where a deeper pullback could look to re-engage dip-buying interest while that level holds. With no nearby resistance markers from the current dataset, traders may instead focus on price behavior and momentum shifts around the 0.7178 area to gauge whether the pair extends the advance or slips back toward its underlying moving-average floor.

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Australian Dollar holds losses below 0.7200 after weaker GDP data, US-Iran tensions

  • AUD/USD softens to near 0.7180 in. Wednesday’s early Asian session. 
  • Australian GDP grew 0.3% QoQ in Q1 of 2026, weaker than expected. 
  • US forces conduct strikes after Iran’s attack, CENTCOM said. 

The AUD/USD pair declines to around 0.7180 during the early Asian session on Wednesday. The Australian Dollar (AUD) weakens against the US Dollar (USD) following a downbeat domestic Gross Domestic Product (GDP) report. Traders will closely monitor the US May employment data, which will be released on Friday. 

Data released by the Australian Bureau of Statistics (ABS) on Wednesday showed that the Australian economy grew 0.3% QoQ in the first quarter (Q1) of 2026, compared to the 0.8% growth in Q4. This reading came in weaker than the 0.5% expansion expected. Meanwhile, the annual first-quarter GDP expanded by 2.5%, compared with the 2.6% growth in Q4, below the market consensus of a 2.7% increase.

The Aussie attracts some sellers in an immediate reaction to the downbeat economic data, as it might prompt markets to expect a more dovish stance from the Reserve Bank of Australia (RBA).

Elsewhere, China’s Services Purchasing Managers’ Index (PMI) improved to 54.4 in May, up from 52.6 in the previous reading, according to RatingDog on Wednesday. This figure came in stronger than the market expectations of 52.3.

Broader geopolitical uncertainties might keep traders on edge and underpin a safe-haven currency such as the Greenback. The United States Central Command (CENTCOM) said on Tuesday that it had intercepted and defeated a series of Iranian missile and drone attacks targeting regional neighbors, including Kuwait and Bahrain, while also carrying out self-defence strikes on Iran’s Qeshm Island, per ABC News.

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AUD/JPY Price Forecast: Strengthens above 114.00, bullish bias holds above key technical support

  • AUD/JPY gathers strength to near 114.35 in Tuesday’s early European session.
  • The constructive outlook for the cross prevails above the key 100-day EMA, with bullish RSI momentum. 
  • The first upside barrier emerges at 114.75; the initial support level is seen at 113.85. 

The AUD/JPY cross trades in positive territory around 114.35 during the early European session on Tuesday. Traders will closely monitor the developments surrounding the Middle East ceasefire amid mixed signals from US President Donald Trump. 

Trump stated early Tuesday that he believes an agreement to reopen the Strait of Hormuz and extend the ceasefire with Iran is reachable “over the next week.” On Monday, US President shrugged off the possible collapse of peace negotiations with Iran, saying, “I don’t care if they’re over, honestly.” 

The likelihood of stronger verbal intervention from Japanese authorities might help limit the Japanese Yen’s (JPY) losses. Finance Minister Satsuki Katayama said on Tuesday the officials stood ready to respond in the currency market as needed and refrained from commenting on recent exchange-rate moves.

The speech by Bank of Japan (BoJ) Governor Kazuo Ueda will be the highlight later on Wednesday. Ueda could offer some hints as to whether the central bank will proceed with a rate increase the following week.

Chart Analysis AUD/JPY

Technical Analysis:

In the daily chart, AUD/JPY holds a bullish near-term bias as spot remains well above the 100-day simple moving average (SMA) and the Bollinger middle band. Price is pressing the upper side of the recent consolidation, while the Relative Strength Index (RSI) at 57.46 stays in positive territory without yet signaling overbought conditions, suggesting buyers still retain control but with reduced momentum compared to the prior peak.

On the topside, immediate resistance is aligned with the Bollinger upper band at 114.75, and a daily close above this barrier would open the way for a continuation of the broader uptrend. On the downside, initial support emerges at the Bollinger middle band around 113.85, ahead of the lower band at 112.98, with the 100-day SMA at 111.30 acting as a deeper structural floor that would need to give way to materially challenge the prevailing bullish structure.

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Australian Dollar weakens as hawkish RBNZ lifts New Zealand Dollar

  • AUD/NZD falls as hawkish RBNZ policy outlooks boosted the New Zealand Dollar.
  • RBNZ’s Breman stated that rates are likely to increase sooner and by more than previously signaled to combat persistent inflation.
  • Australian Dollar falls as markets slashed expectations for further RBA interest rate hikes.

AUD/NZD depreciates for the third successive day, trading around 1.2020 during the Asian hours on Friday. The currency cross loses ground as the New Zealand Dollar (NZD) finds strong support amid growing hawkish sentiment surrounding the Reserve Bank of New Zealand’s (RBNZ) policy outlook.

According to Reuters, RBNZ Governor Anna Breman stated on Friday that interest rates are likely to increase sooner and by more than previously signaled to combat persistent inflation. While the central bank decided to keep the Official Cash Rate (OCR) on hold at 2.25% during its May meeting on Wednesday, the decision revealed a deeply divided board, with three members voting for an immediate quarter-point hike and three voting to maintain the status quo.

Further reinforcing the New Zealand Dollar’s strength is an uptick in domestic confidence data. The ANZ-Roy Morgan Consumer Confidence Index rebounded to 86.5 in May, climbing from April’s reading of 80.3, which had marked its lowest level since May 2023. Although the index has managed to recover 6 points over the past month, it still remains notably down by 21 points from its peak in January, suggesting that while local consumer sentiment is recovering, it is doing so from a deeply depressed baseline.

In contrast, the Australian Dollar (AUD) is struggling against the New Zealand Dollar as markets sharply scale back expectations for further interest rate hikes by the Reserve Bank of Australia (RBA).

Investors are reacting to a series of economic indicators suggesting that earlier RBA monetary tightening is successfully filtering through the Australian economy. A softer-than-expected April inflation print, combined with weak consumer spending data and recent signs of a cooling labor market, has prompted market participants to aggressively cut the odds of a June rate hike, dragging the Australian Dollar lower.

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Trade of The Day: AUD/USD

  • The AUDUSD exchange rate opened today below the 10- and 30-day exponential moving averages (EMA10 – yellow, EMA30 – light purple).
  • Core PCE inflation in the US rose to 3.3% YoY in April (previously 3.2% YoY).
  • The swap market-implied probability of a US interest rate hike in 2026 increased from 82% to 86% over the course of the week.

Recommendation:

  • Position: Short (SELL) on AUDUSD at market price
  • Target Price (Take Profit; TP): 0.70550 (TP1), 0.70170 (TP2)
  • Stop Loss (SL): 0.72100

Source: xStation5

Opinion

The AUDUSD pair erased some of its losses from today’s session following the release of the latest US inflation data, which turned out slightly softer than expected. Core PCE increased in line with expectations to 3.3% year-on-year, while on a month-on-month basis, prices rose by 0.2% (against a 0.3% forecast). However, the lack of a negative inflation surprise is not exactly “good news” for monetary policy, especially since inflation remains in an upward trend and is proving to be stickier than assumed. The Fed’s narrative is also becoming increasingly hawkish. Recent remarks from Cook, Goolsbee, Kashkari, and Jefferson unanimously emphasize the growing and materializing upside risks to inflation, along with a clear readiness to hike interest rates should this trend continue.

Furthermore, the AUDUSD’s reaction to the optimism generated by hopes of a truce between Iran and the US last week was quite moderate, and the gains were insufficient to push the price above the 10- and 30-day exponential moving averages. Therefore, risk-sensitive currencies (including the AUD) can be expected to remain under heavy pressure until real progress is made in the Middle East, and a potential rebound in reaction to the end of the war is unlikely to trigger a rapid return to an upward trend for the pair. The options market is also pointing to further declines for AUDUSD. The 1-week and 1-month risk reversal indicators sit below zero, showing that options betting on the depreciation of the AUD dominate the market. In other words, the market is systematically hedging against further declines in AUDUSD consistently across various time horizons.

Methodology

The recommendation was prepared based on the technical analysis of the AUDUSD chart and the fundamental analysis of the discussed economies (monetary policy in Australia and the US). The direction of the recommendation was determined using moving averages and market expectations regarding central bank policies. Take Profit and Stop Loss levels were set using the Fibonacci retracement of the last upward wave and price action (TP1 at the 50.0 Fibo level, TP2 between the D1 interval EMA100 and the 61.8 Fibo level, and SL at the support from which the price rebounded before breaking the last peak).

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AUD/USD Price Forecast: On verge of Head and Shoulder breakdown

  • AUD/USD tumbles to near 0.7100 as the Australian Dollar underperforms due to multiple headwinds.
  • The exchange of attacks between the US and Iran has dented optimism towards a peace deal.
  • Slower-than-projected Australian CPI growth in April has forced traders to pare hawkish RBA bets.

The Australian Dollar (AUD) slumps over 0.5% to near 0.7100 during the Asian trading session on Thursday. The Aussie par slumps as the antipodean underperforms its peers due to risk-off market sentiment and diminished hawkish Reserve Bank of Australia (RBA) bets.

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.30%0.38%0.05%0.16%0.55%0.51%0.32%
EUR-0.30%0.08%-0.28%-0.15%0.25%0.22%0.02%
GBP-0.38%-0.08%-0.34%-0.23%0.17%0.15%-0.07%
JPY-0.05%0.28%0.34%0.11%0.51%0.46%0.28%
CAD-0.16%0.15%0.23%-0.11%0.41%0.36%0.16%
AUD-0.55%-0.25%-0.17%-0.51%-0.41%-0.02%-0.24%
NZD-0.51%-0.22%-0.15%-0.46%-0.36%0.02%-0.21%
CHF-0.32%-0.02%0.07%-0.28%-0.16%0.24%0.21%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

Market sentiment turns favorable for safe-haven assets as Iran has retaliated against the United States (US) attacks near Bandar Abbas airport by striking its military bases in the Gulf region. At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.3% higher, slightly above 99.50. S&P 500 futures and all major Asian stock markets are bleeding, as of writing, indicating a significant dent in investors’ risk appetite.

Hawkish RBA prospects have squeezed as the Australian Consumer Price Index (CPI) data for April showed that inflationary pressures cooled down at a faster-than-expected pace. Month-on-month CPI arrived at 0.4%, lower than 0.6% estimates and the previous reading of 1.1%. On an annualized basis, the Australian CPI grew at a moderate pace of 4.2% against expectations of 4.4% and the March reading of 4.6%.

Following the Australian CPI data, markets now imply almost no chance of a June move, while the probability of an August hike has more than halved to 40%, Reuters reports.

AUD/USD technical analysis

AUD/USD trades significantly lower at around 0.7100 as of writing. The near-term tone of the pair is bearish as it holds below the 20-period exponential moving average (EMA), which is at 0.7158. Also, the Head and Shoulder (H&S) formation backs a bearish bias.

The Relative Strength Index (RSI) is near 43, indicating subdued momentum rather than oversold conditions, hinting that sellers still retain the upper hand.

Looking down, the pair could enter a fresh leg of decline if it breaks below the neckline of the H&S formation at around 0.7070. Major support zones will be 0.7050 and the April 13 low around 0.6990. On the topside, the 20-day EMA at 0.7158 is the first resistance to beat for the bulls to ease immediate downside pressure and open the way for a more sustained recovery towards 0.7200.