Forecasts of the movement of the Australian dollar

The Australian dollar is at a fundamental level

The Australian dollar rose against the US dollar near one-and-a-half-year highs on Monday, and its future direction depends on developments in US trade agreements as the deadline for imposing tariffs approaches.

With tensions in the Middle East largely subsiding, investors are focusing on developments in the US Trade Agreement negotiations, with a cautious anticipation of the progress of the US tax and spending cuts bill slowly making its way through the Senate.

The AUD/USD pair will continue its gains made last week if the Trump administration announces more trade deals. In turn, the pair will retreat if negative news appears about the US trade negotiations.

Forecasts also indicate a 92% probability that the Reserve Bank of Australia will cut the current cash rate of 3.85% again, after it was cut last May, and a total reduction of 95 basis points has been calculated, equivalent to almost four cuts by early next year.

Australia is expected to release retail sales data on Wednesday.

The forecast focuses on a 0.3% rise in May after a decline in April, as interest rate cuts so far support consumer spending expectations.

Australian dollar at a technical level

The Australian dollar pair rebounded today from resistance levels of approximately 0.6550, as the pair is trying to retreat today under the influence of negative divergence of the MACD indicator on the hourly and four-hour frames.

We are currently targeting 0.6490 levels on the pair as an initial target, then 0.6425 levels and finally 0.6380.

This scenario fails if the pair breaks through the levels of 0.6590 upwards.