The AUD/USD currency pair extended its rally on Tuesday, gaining approximately 0.38% and reaching a session high near 0.7150 before retreating to settle around 0.7120. The pair has shown a strong recovery from early-April lows near 0.6990, but the inability to sustain levels above 0.7150 indicates that sellers are actively defending this resistance zone [1].
A significant market-moving factor was the sharp decline in Westpac Consumer Confidence, which collapsed by 12.5% in April. This drop reflects heightened concerns over the global energy shock and its impact on domestic costs in Australia. Meanwhile, Chinese trade data presented a mixed outlook: imports surged 27.8% year-over-year in March, far exceeding the 11.1% consensus and signaling robust domestic demand, while exports grew only 2.5%, missing the 8.3% forecast [1].
On the US side, the Producer Price Index (PPI) for March rose 0.5% month-over-month, significantly below the 1.2% consensus, and the core PPI increased just 0.1%. This weaker-than-expected inflation data eased some pressure on the Federal Reserve's rate outlook. However, the headline PPI still registered a 4.0% year-over-year increase, the highest since February 2023, largely attributed to the energy price shock stemming from the Iran conflict. Additionally, President Trump suggested that US-Iran peace talks could resume within days, which added further headwinds for the US Dollar [1].
Technical analysis shows AUD/USD trading at 0.7126, modestly above the daily open of 0.7093. The Stochastic RSI on the 15-minute chart is recovering from oversold territory, indicating that recent downside pressure may be fading. On the daily chart, the pair remains above both the 50-day and 200-day EMAs (0.6981 and 0.6761, respectively), supporting a constructive medium-term outlook. However, the Stochastic RSI at 81.10 signals overbought conditions, suggesting a risk of consolidation or a corrective pullback after the recent advance [1].
Looking ahead, Thursday's Australian employment report (consensus: 20K) and China's first-quarter GDP reading are highlighted as key upcoming events that could further influence the Australian Dollar's direction this week [1].
CONCLUSION
AUD/USD's rally has paused near a key resistance level amid a sharp drop in Australian consumer confidence and mixed Chinese trade data. While technicals remain constructive, overbought signals and upcoming economic releases could drive near-term volatility. The market is closely watching Australian employment and Chinese GDP data for further direction.