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AUD/USD – Consolidates above 0.7050; 100-day SMA holds the key ahead of Fed

  • AUD/USD remains on the back foot for the second straight day, though it lacks follow-through.
  • The RBA’s hawkish tilt supports the Aussie, while the US-Iran peace deal undermines the USD.
  • Traders seem hesitant ahead of the crucial FOMC rate decision amid a bearish technical setup.

The AUD/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and holds above the 0.7050 level through the Asian session on Wednesday amid mixed cues.

The Reserve Bank of Australia (RBA) maintained a hawkish hold on Tuesday and warned that further rate increases are possible if inflation remains stubbornly elevated, which acts as a tailwind for the Australian Dollar (AUD). Furthermore, an interim US-Iran peace agreement undermines the safe-haven US Dollar (USD) and supports the AUD/USD pair. Traders, however, seem hesitant and opt to wait for the highly anticipated FOMC policy decision before placing fresh directional bets.

The AUD/USD pair keeps a bearish near-term tone 0.7085-0.7090 confluence – comprising the 100-day Simple Moving Average (SMA) and the 38.2% Fibonacci retracement of the May-June downfall. Adding to this, momentum oscillators hint that a short-term downward trend is still in play. The Relative Strength Index (RSI) is near 43, while the Moving Average Convergence Divergence (MACD) line remains below zero and the signal line, with the histogram remaining slightly negative.

On the topside, the immediate hurdle is clustered around the 0.7085-0.7090 confluence, with further barriers seen at the 50% level at 0.7124 and the 61.8% retracement at 0.7159. A sustained break above these would be needed to ease the current bearish pressure and expose the 78.6% retracement at 0.7209 and the swing high near 0.7272. On the downside, initial support is aligned with the 23.6% Fibo. at 0.7046, ahead of the monthly low near 0.6976, where a break would reinforce the broader decline.

(The technical analysis of this story was written with the help of an AI tool.)

AUD/USD daily chart

Chart Analysis AUD/USD
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GBP/USD Price Forecast: Treading water around 1.3400 with central banks in focus

  • GBP/USD keeps hovering around 1.3400, lacking a clear bias.
  • Investors await details from the US-Iran deal and interest rate decisions by the Fed and the BoE.
  • Technically, the pair is in a consolidating phase, trapped between 1.3300 and 1.3500.

The British Pound (GBP) is trading practically flat against the US Dollar (USD) on Tuesday. The Doji candles at the 1.3400 area highlight an indecisive market, as traders await details on the US-Iran peace deal and monetary policy decisions by the US Federal Reserve (Fed) and the Bank of England (BoE) to make investment decisions.

US Vice President JD Vance affirmed earlier on the day that no tolls will be applied to vessels crossing the Strait of Hormuz and that nuclear inspectors will return to Iran. Investors, however, remain reluctant to take excessive risks, awaiting confirmation from Tehran.+

Markets are also attentive to the interest rate decisions from the Fed and the BoE to assess how major central banks will react to the peace deal. The Fed is expected to keep rates on hold on Wednesday, with the new Chairman Kevin Warsh, likely to adopt a more dovish stance than his predecessor Jerome Powell.

On Thursday, the BoE is highly likely to follow suit on rates and to hint at a steady monetary policy for the coming months. In this case, the vote split and the minutes of the meeting are expected to provide further details about the bank’s forward guidance.

Technical Analysis: Key levels are 1.3300 and 1.3500

GBP/USD Chart Analysis

GBP/USD trades at 1.3410, halfway through the last four weeks’ range, between 1.3300 and 1.3500. Indicators in the 4-hour chart highlight a lack of clear momentum, with the Relative Strength Index (RSI) flat at the 50 midline and the Moving Average Convergence Divergence (MACD) fractionally below zero, together hinting at a consolidative bias.

The pair was rejected at the 1.3460 area on Monday, although the key resistance area lies between 1.3485 and 1.3505, which has held bulls since mid-May. Further up, the next target is the May 14 high, near 1.3550.

On the downside, Friday’s low, at 1.3380, might provide some support ahead of the bottom of the range, at the 1.3300 area (May 18, June 8 lows). Below here, the next bearish target is the late March to early April lows around 1.3170.

(The technical analysis of this story was written with the help of an AI tool.)

US Dollar Price Today

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

USDEURGBPJPYCADAUDNZDCHF
USD-0.03%-0.00%-0.05%0.09%0.18%0.07%0.03%
EUR0.03%0.03%0.02%0.13%0.20%0.10%0.07%
GBP0.00%-0.03%0.00%0.11%0.16%0.08%0.04%
JPY0.05%-0.02%0.00%0.11%0.19%0.10%0.08%
CAD-0.09%-0.13%-0.11%-0.11%0.08%-0.03%-0.06%
AUD-0.18%-0.20%-0.16%-0.19%-0.08%-0.09%-0.12%
NZD-0.07%-0.10%-0.08%-0.10%0.03%0.09%-0.03%
CHF-0.03%-0.07%-0.04%-0.08%0.06%0.12%0.03%

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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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Trade of The Day – AUD/USD

Facts:

The pair bounced off the key resistance area near 0.7090 Short – term trend remains downward from the mid-May

Recommendation:

Trade: Short position on AUDUSD at market price Target: 0.6988, 0.6948 Stop: 0.7110

Opinion:

AUDUSD has been trading in a downward move recently. Looking at the H4 interval, one can see that the price bounced off the key 0.7090 resistance area. Red area near 0.7090 handle on the chart below is marked with previous price reactions, 100-period moving average from H1 interval, as well as upper limit of 1:1 structure. Taking this into account, continuation of the downward move looks to be the base case scenario for now. We recommend going short AUDUSD at market price with two targets: 0.6988 and 0.6948. We also recommend placing a stop loss order at 0.7110.

Source: xStation5

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New Zealand Dollar declines as risk-off mood supports US Dollar

  • NZD/USD weakens as broad caution and a steady US Dollar kept investors defensive ahead of updates on Iran’s nuclear program.
  • Fed is widely expected to keep interest rates unchanged at 3.50% to 3.75% in June.
  • China’s Retail Sales fell 0.6% year-on-year in May, missing expectations of a flat reading.

NZD/USD extends its losses for the third consecutive day, trading around 0.5810 during the Asian hours on Tuesday. The pair depreciates as the US Dollar (USD) holds steady amid broad market caution. Investors remain on the defensive as they await further updates regarding Iran’s unresolved nuclear program.

Both Washington and Tehran have not released the official text of the agreement; major shipping lines are delaying vessel rerouting through the strategic waterway until full transparency is established.

Even though US President Donald Trump announced that a memorandum of understanding (MoU) has been signed to end the conflict and reopen the blockaded Strait of Hormuz, market participants remain deeply cautious. According to Iran’s semi-official Mehr news agency, the current draft calls for the strait to reopen within 30 days under Iranian arrangements.

The Federal Reserve (Fed) is widely expected to keep its benchmark interest rate unchanged at a target range of 3.50% to 3.75% on Wednesday, which could be attributed to the higher US inflation due to elevated energy prices linked to Middle East tensions. Traders will be closely monitoring the press conference for cues on how new Fed Chair Kevin Warsh intends to lead the central bank into its next era.

The New Zealand Dollar (NZD) struggles following a wave of weak economic data out of China. Because China is New Zealand’s largest trading partner, buying roughly one-third of all Kiwi goods exports, the New Zealand Dollar acts as a primary liquid proxy for the Chinese economy.

China’s domestic demand slumped sharply in May, with Retail Sales contracting by 0.6% year-on-year against expectations of a flat reading. Additionally, Fixed Asset Investment dropped at a faster pace of -4.1%, failing to meet the projected -2%. While Industrial Production offered a minor bright spot by coming in stronger-than-expected at 4.5%.

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Indian Rupee trades firmly amid signs of renewed FIIs’ interest towards Indian stock market

  • The Indian Rupee trades firmly against the US Dollar due to multiple tailwinds.
  • Lower oil prices and signs of improvement in FIIs sentiment towards the Indian stock market have strengthened the Indian Rupee.
  • The Fed is expected to leave interest rates steady on Wednesday.

The Indian Rupee (INR) opens firmly against the US Dollar (USD) on Tuesday. The USD/INR pair trades lower around 94.58 as lower oil prices due to the successive reopening of the Strait of Hormuz, following the signing of a peace deal between the United States (US) and Iran, and signs of improvement in sentiment of overseas investors towards the Indian stock market have strengthened the Indian Rupee.

In the opening session, the MCX Crude Oil contract expiring on June 18 rises slightly to near 7,640, but is close to its over eight-week low of 7,550 posted on Monday.

Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to outperform when oil prices remain lower.

US-Iran signs peace deal

On Monday, US President Donald Trump announced that a peace deal with Iran had signed and the Strait of Hormuz had fully reopened. Trump added that details of the deal will be released shortly, but confirmed that Tehran won’t have nuclear weapons.

Investors await details of the deal to get clarification regarding whether Hormuz remains toll-free or not. The resumption of normal traffic will keep oil prices lower, a scenario that will be favorable for the Indian currency.

FIIs turns of net buyers for first time in June

On Monday, Foreign Institutional Investors (FIIs) emerged as net buyers in the Indian stock market for the first time in June after diluting their stake worth Rs. 46,430.42 crore in the first two weeks. The sentiment of foreign investors towards the Indian equity market appears to have improved due to the US-Iran peace deal signing, which has eased the global risk-off impulse. In Monday’s session, FIIs bought shares worth Rs. 200.05 crore.

Investors await two-day Fed policy meeting

This week, the major trigger for the US Dollar will be the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. According to the CME FedWatch tool, the Fed is certain to leave interest rates unchanged in the 3.50%-3.75%.

Investors will pay close attention to the Fed’s monetary policy guidance under the new Chairman Kevin Warsh, and interest and economic projections in the near-to-longer term.

US President Trump has provided significant breathing room to Chairman Warsh by giving him a free hand on decision-making, stating in recent days that he wants him to “do whatever he wants” and “be totally independent”, CNBC reported. While Trump was seen criticizing former Chairman Jerome Powell numerous times for not reducing interest rates quickly, despite inflationary pressures remaining higher.

Technical Analysis: USD/INR stays below 20-day EMA

USD/INR trades weakly at around 94.58, extending a corrective phase below its 20-day exponential moving average (EMA) at 95.2580, which now acts as the first topside barrier and keeps the near-term bias tilted lower.

The Relative Strength Index (RSI) at 42.6 remains below the midline, suggesting waning bullish momentum and leaving the pair vulnerable while it holds under the short-term EMA cap.

On the topside, a daily close above the 20-day EMA around 95.26 would be needed to ease immediate downside pressure and open the way for a more sustained rebound towards 96.00. Looking down, the pair could extend the decline to the May 7 low at 94.03 if it fails to hold the June 15 low at 94.43.

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Australian Dollar holds losses following RBA decision

  • AUD/USD remains subdued as the RBA held its Official Cash Rate steady at 4.35%, matching market expectations.
  • China’s Retail Sales fell 0.6% year-on-year in May, missing expectations of a flat reading.
  • Traders price in the odds of the Fed holding interest rates steady at 3.50% to 3.75% this Wednesday.

AUD/USD pares its recent gains from the previous day, trading around 0.7050 during the Asian hours. The pair remains subdued as the Australian Dollar (AUD) struggles to shake off losses following the Reserve Bank of Australia’s (RBA) latest monetary policy update.

As widely anticipated by the market, the RBA decided to keep its Official Cash Rate (OCR) unchanged at 4.35% during its Tuesday meeting. The decision offered few surprises and lacked the hawkish spark needed to lift the currency, leaving the Australian Dollar highly sensitive to outside economic pressures.

Compounding the pressure on the AUD is a wave of weak economic data out of China. Because Australia’s economy relies heavily on commodity exports to Beijing, negative developments in China routinely drag down the antipodean currency.

China’s domestic demand slumped sharply in May, with Retail Sales contracting by 0.6% year-on-year against expectations of a flat reading. Additionally, Fixed Asset Investment dropped at a faster pace of -4.1%, failing to meet the projected -2%. While Industrial Production offered a minor bright spot by coming in stronger-than-expected at 4.5%, the overall data packet highlighted an uneven recovery that is weighing heavily on Aussie trader sentiment.

Meanwhile, the US Dollar (USD) is holding steady as broad market caution keeps investors on the defensive. Geopolitical anxieties persist around Iran’s unresolved nuclear program, keeping risk appetite low. Even though US President Donald Trump announced that a memorandum of understanding has been signed to end the regional conflict and reopen the blockaded Strait of Hormuz, market participants remain deeply skeptical because neither Washington nor Tehran has released the official text of the agreement. This ongoing uncertainty has driven defensive flows into the safe-haven greenback.

Looking ahead, the Federal Reserve (Fed) is universally expected to keep its benchmark interest rate unchanged at a target range of 3.50% to 3.75% on Wednesday. Elevated energy prices stemming from the Middle East tensions have kept US inflation sticky, giving the central bank reason to hold steady. Market participants will be intensely focused on the upcoming press conference for crucial clues on how the new Fed Chair, Kevin Warsh, intends to guide the central bank and shape monetary policy in this new era.

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Swiss Franc declines as market caution lifts US Dollar

  • USD/CHF appreciates as the US Dollar remains stronger amid market caution ahead of further US-Iran peace talk updates.
  • Traders price in the odds of the Fed holding interest rates steady at 3.50% to 3.75% this Wednesday.
  • Money markets expect the Swiss National Bank to keep interest rates unchanged through the end of the year.

USD/CHF gains ground after registering modest losses in the previous day, trading around 0.7950 during the Asian hours on Tuesday. The pair appreciates as the US Dollar (USD) holds steady amid broad market caution. Investors remain on the defensive as they await further updates regarding Iran’s unresolved nuclear program.

Both Washington and Tehran have not released the official text of the agreement; major shipping lines are delaying vessel rerouting through the strategic waterway until full transparency is established.

Even though US President Donald Trump announced that a memorandum of understanding (MoU) has been signed to end the conflict and reopen the blockaded Strait of Hormuz, market participants remain deeply cautious. According to Iran’s semi-official Mehr news agency, the current draft calls for the strait to reopen within 30 days under Iranian arrangements.

The Federal Reserve (Fed) is widely expected to keep its benchmark interest rate unchanged at a target range of 3.50% to 3.75% on Wednesday, which could be attributed to the higher US inflation due to elevated energy prices linked to Middle East tensions. Traders will be closely monitoring the press conference for cues on how new Fed Chair Kevin Warsh intends to lead the central bank into its next era.

Sharp declines in oil prices have helped alleviate inflationary pressures, reducing expectations for further monetary tightening. Consequently, money markets are now pricing in no additional interest rate changes from the Swiss National Bank (SNB) for the remainder of the year.

This aligns with the latest data showing Swiss Producer and Import Prices fell 1.8% year-on-year in May. While this marks the softest pace of deflation in five months, easing from April’s 2.0% decline due to slower drops in import prices, the monthly figures caught markets off guard. On a month-over-month basis, the price index fell 0.4%, missing forecasts for a 0.4% increase and reversing April’s 0.8% gain.