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The Australian Dollar staged a fragile bounce during Tuesday’s American session, holding near the 0.6000 zone after rebounding from session lows. This recovery came as the US Dollar’s earlier strength faded, helping risk currencies like the Aussie stabilize within their recent five-year low range. Market sentiment improved somewhat following reports that the US is in trade talks with dozens of countries, although China remains a clear outlier. 

At the same time, the latest batch of tariff announcements from Washington — featuring a cumulative import duty exceeding 100% on Chinese goods — has kept downside pressure alive. On the technical front, AUD/USD remains tilted lower, but mixed signals across oscillators hint at potential short-term consolidation.

Daily digest market movers: Tariff showdown persists

• After a turbulent start to the week, sentiment improved on Tuesday following confirmation from the White House that tariffs on China took effect at noon EST. Despite the escalation, US officials revealed ongoing discussions with over 50 countries, suggesting a multilateral approach outside China’s scope.
• Fed officials expressed concern over the inflationary risks of widespread tariffs. San Francisco Fed’s Daly warned of rising price pressure, while Chicago’s Goolsbee underscored the limited flexibility for importers to navigate the new trade landscape.
• Despite retaliatory threats from Beijing, risk appetite returned as markets bet on potential breakthroughs in global negotiations. Equities pared losses, Gold dipped below the $3,000 mark, and the US Dollar Index (DXY) extended its pullback toward the 103.00 threshold.
• China’s Ministry of Commerce condemned Washington’s new tariff barrage as counterproductive, pledging a firm response. The comments reignited fears over Australia’s export vulnerability, especially given its reliance on China-bound goods.
• Meanwhile, the Reserve Bank of Australia remains under scrutiny, with increasing expectations of policy easing as trade headwinds continue to threaten the domestic outlook.

Technical analysis

AUD/USD is navigating a narrow range around the mid-point of its daily boundaries, showing hesitant movement after days of pronounced weakness. Price action remains bearish in the broader context, but intraday signals are becoming muddled.

The Moving Average Convergence Divergence (MACD) has printed another red bar, reinforcing the dominant downtrend. In contrast, the Relative Strength Index (RSI) remains stuck near 29, flashing oversold conditions and leaning toward a possible rebound. Adding complexity, the Commodity Channel Index (CCI) also supports a recovery, suggesting the pair may be primed for short-term upside correction.

However, trend indicators continue to weigh heavily on the pair. The 10-day Exponential Moving Average (EMA), alongside the 20-day, 100-day, and 200-day Simple Moving Averages (SMAs), all slope downward, offering no reprieve to bulls. The Average Directional Index (ADX) remains neutral, further supporting the notion of potential sideways movement rather than directional conviction.

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