Insights 
VT 
Key Points
- AUD/USD trades near 0.6491, just shy of resistance at 0.6510 after overnight rise of 0.5%.
- Weak Australian consumption data adds pressure on the RBA, while soft U.S. prints drive Treasury rally and dollar retreat.
The Australian dollar remained resilient on Thursday, trading near $0.6491, bolstered more by U.S. dollar weakness than domestic strength. Despite weak macro prints out of Australia, the Aussie held its ground as risk sentiment swung in its favour, buoyed by a softening greenback in response to deepening concerns around tariff-induced economic deceleration in the United States.
The Aussie rose 0.5% overnight, largely mirroring the broader U.S. dollar selloff. Data out of the U.S. showed that the services sector contracted for the first time in nearly a year, while ADP private payrolls rose by only 152,000, well below the 173,000 consensus. Treasury yields dropped in response, pushing the dollar index to six-week lows and reigniting speculation of a Fed rate cut as soon as September.
This macro backdrop pushed traders out of the dollar and into higher-yielding risk currencies, lending broad support to the AUD despite local economic underperformance.
Australian Macro Picture Still Fragile
On the domestic front, fundamentals offer little reason for bullish enthusiasm. Wednesday’s GDP data came in weaker than expected, and Thursday’s Household Spending Index showed only marginal growth for April. This, combined with earlier tepid retail sales and a soft trade surplus (driven by a fall in gold exports), painted a lacklustre picture for Q2 economic momentum.
Markets are now pricing in a rate cut from the RBA as early as July, with the expected cycle bottoming at 2.85% by early 2026. Although Australia’s exports to China remain stable, they are not enough to offset the broader slowdown in household consumption.
“The momentum of the HSI in recent months continues to fade,” noted UBS economist George Tharenou, who added that “risks of a July cut have increased materially.”
Technical Analysis
The Australian dollar climbed steadily off the 0.6445 low, peaking at 0.6509 before consolidating into a tighter range. Momentum peaked around the Asia-London crossover, supported by a bullish MACD crossover and consistent higher lows. However, since tagging resistance near 0.6510, price has flattened just below the 30-period MA and is now moving sideways, suggesting indecision.
Picture: AUD/USD stalls near 0.6510 after slow grind higher; momentum fades as price coils under resistance, as seen on the VT Markets app
MACD momentum has weakened, with the histogram near neutral and signal lines narrowing. Short-term moving averages (5 and 10) are clustering with price, pointing to a possible breakout—or a fade—depending on incoming catalysts.
Immediate resistance lies at 0.6509, with key support at 0.6480. A break above 0.6510 opens the path toward 0.6530, while a dip below 0.6480 may signal a return to 0.6460.
Traders will now look to Friday’s U.S. nonfarm payrolls for the next major catalyst. Any downside surprise may further depress the dollar and give the Aussie the boost needed to test the upper end of its range near 0.6537. Until then, expect range-bound consolidation with limited upside momentum.
