AUD/USD plunges toward 0.6050 as dovish RBA expectations surge sharply
FUNDAMENTAL OVERVIEW:
- AUD/USD tumbles sharply as dovish RBA bets gain rapid momentum.
- Markets now anticipate rate cuts at each of the next three RBA policy meetings.
- Meanwhile, upbeat U.S. March NFP data—showing a stronger-than-expected 228K jobs versus the forecasted 135K—adds further pressure on the Aussie.
AUD/USD plunges over 3.5% below 0.6100 in early North American trade on Friday, collapsing amid heightened rate cut bets for the RBA. The sharp selloff was triggered by fresh U.S. tariffs announced by President Donald Trump, fueling expectations of aggressive RBA easing. The pair hit an intraday low of 0.6049—its weakest level in nearly five years.
ANZ Bank analysts anticipate the Reserve Bank of Australia (RBA) will lower interest rates at each of its next three meetings—in May, July, and August. They also warn of a potential outsized 50-basis-point cut in May should global economic conditions deteriorate sharply.
Alongside mounting RBA rate-cut expectations, the Australian Dollar (AUD) is also under pressure from escalating US-China trade tensions. On Friday, during European hours, Beijing warned of 34% retaliatory tariffs on all US imports starting April 10, responding to Trump’s reciprocal tariff measures.
Growing fears over a weakening Chinese economic outlook further weigh on the AUD, as Australia’s economy is heavily dependent on exports to China.
AUD/USD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
AUD/USD is trading within a down channel.
AUD/USD is moving below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Neutral Zone, while the Stochastic oscillator suggests a Negative trend.
Immediate Resistance level: 0.6215
Immediate support level: 0.6055
HOW TO TRADE AUD/USD
After a sharp decline, AUD/USD entered a consolidation phase within a significant range. Recently, it broke below its support level with a strong bearish candle, which also breached the previous week’s low. Currently, the pair is pulling back from the downside and approaching immediate resistance. If it faces rejection at the resistance level, the downtrend may resume, potentially extending further to the downside.