The AUD/USD outlook indicates solid bullish sentiment as the dollar remains fragile after Friday’s dismal US retail sales report. At the same time, the dollar weakened due to delays in the implementation of Trump’s reciprocal tariff. Meanwhile, there is some downward pressure on the Australian dollar as traders await a likely RBA rate cut on Tuesday. 

The dollar collapsed on Friday after data revealed that US retail sales dropped by 0.9%. Meanwhile, economists had expected sales to decline by 0.2%. The massive drop is a sign that consumer spending is weak. Therefore, it puts pressure on the Fed to lower borrowing costs. 

The dollar was also under pressure last week after Trump delayed implementing his reciprocal tariff to conduct thorough investigations. The delay renewed hopes that most countries would negotiate better trade deals, reducing the risk of trade wars. This deflated the dollar and boosted risk appetite, reviving the risk-sensitive Australian dollar. 

However, market participants expect the Reserve Bank of Australia to start its easing cycle on Tuesday. A rate cut and a dovish tone will likely weaken the Aussie.

AUD/USD key events today

Neither Australia nor the US will release any high-impact reports today. Therefore, market participants will look forward to the RBA policy meeting.

AUD/USD technical outlook: Uptrend nears the 0.6400 level

(Click on image to enlarge)

AUD/USD 4-hour chart

On the technical side, the AUD/USD price has soared to new highs after breaking above the 0.6300 resistance level. The price trades far above the 30-SMA, showing bulls are in the lead. At the same time, the RSI trades near the overbought region, indicating solid bullish momentum. 

Bulls took over when the price found support at the 0.6100 key level. However, they struggled to break above the 0.6300 resistance, leading to a brief consolidation. The eventual breakout shows that bulls are ready to keep making higher highs. 

However, the rally is approaching the 0.6400 key psychological level, where it might pause. Such an outcome would allow the price to retest the 30-SMA support. If it holds firm, the uptrend will likely continue beyond the 0.6300 level. On the other hand, if the price breaks below the SMA, it will signal a bearish sentiment shift.

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