Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6365.
- Add a stop-loss at 0.6220.
- Timeline: 1-2 days.
Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6220.
- Add a stop-loss at 0.6365.
The AUD/USD exchange rate rose overnight as the market reflected on Donald Trump’s Liberation Day and the strong private sector payrolls data. It rose to 0.6300, up by 3.45% from its lowest level this year.
Liberation Day and US jobs data
The AUD/USD pair rose after Trump unveiled his Liberation Day tariffs as he seeks to balance US trade with other countries. In his speech, he said that his tariff measures will help protect key economic sectors while raising billions of dollars for the US government.
This statement came as the US starts imposing tariffs on imported steel and aluminum and a 25% tariff on imported vehicles. While some companies have welcomed these tariffs, there is a risk that they will negatively affect the US economy. That’s because these tariffs are a big tax increment to most Americans.
The AUD/USD pair also reacted to the March private payrolls report. According to ADP, the private sector created 155k jobs in March, even as companies remained cautious about tariffs. That figure was much higher than the 115k that most analysts were expecting.
Recent data have shown that the labor market is doing well. Workers filing for jobless claims have slowed, while layoffs have stabilized. This is in line with what Jerome Powell said last month when he described the labor market as a low-firing and low-hiring situation.
The US will release the latest initial jobless claims data on Thursday and the official nonfarm payrolls (NFP) on Friday. These numbers will provide more color on the state of the economy as the impact of tariffs start spreading.
The AUD/USD pair will also react to the upcoming services and composite PMI data by S&P Global and the Institute of Supply Management.
AUD/USD technical analysis
The AUD/USD exchange rate was trading at 0.6300 on Thursday, a few points above this month’s low of 0.6220. It is consolidating at the 50-day and 25-day Exponential Moving Average (EMA).
The pair has formed a bearish flag pattern comprising an ascending channel and a vertical line. This pattern often leads to a strong bearish breakdown over time.
The AUD/USD will likely remain in this consolidation phase in the coming days. If this happens, the initial target to watch will be the crucial resistance at 0.6365, the lowest swing in April and August last year. A bearish breakout will be confirmed if the price drops below the support at 0.6218.
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