- The pair jumps 0.42% to 0.6315 on Friday, buoyed by broad risk appetite.
- Trump expresses desire to avoid tariffs on China, offers tips on trade deal.
- Fed rates are cutting bets and bullish pressure on the US dollar.
- Traders are assessing the latest US PMI data amid a potential shift in risk dynamics.
AUD/USD attracted buyers on Friday after President Trump suggested a trade deal with China remained within reach, adding to risky sentiment. The pair will hit 0.6315, heading for its first weekly gain in three weeks. Meanwhile, renewed speculation about additional Federal Reserve (FED) rate cuts in 2025 continues to undermine the US dollar, providing additional lift to Aussie.
Daily Digest Market Movers: Aussie Continues Recovery as USD Remains Soft
- Greenback falls to a monthly trough as price markets look to continue to power through the end of the year. Additionally, President Trump’s statements regarding immediate interest rate cuts are contributing to the USD’s latest decline.
- A possible Reserve Bank of Australia (RBA) rate cut in February and subdued economic growth could limit the advantages for Australians.
- On the US front, the S&P Global Composite PMI slows to 52.4 from 55.4, with manufacturing climbing to 50.1 and services falling to 52.8. Analysts are reporting growing optimism in the manufacturing sector, anticipating supportive policies under the Trump administration.
- The US president is signaling his reluctance to impose tariffs on China, citing the possibility of finalizing a trade pact. He also repeats complaints about trade deficits with various nations, including Canada, calling on OPEC to lower oil prices.
AUD/USD Technical Outlook: Short-term signals are becoming more bullish, pointing to a potential breakout
AUD/USD advanced to 0.6315 on Friday, extending its recent winning streak and closer to 0.6330. In the brief term, constructive techniques: the moving convergence CD (MACD) histogram prints rising green bars, suggesting budding changes in the direction of bullish momentum. The relative strength index (RSI) is 58 and rising rapidly, indicating solid mountain pressure.
This combination means the pair could be on the verge of a more significant bounce. A decisive break above 0.6330 will confirm the broader reversal.
