Insights 
VT 
The Australian dollar held firm on Thursday, hovering around $0.6491, supported more by weakness in the US dollar than by domestic economic strength. Although recent data from Australia was underwhelming, the Aussie found footing amid a shift in risk sentiment, as concerns over US trade policy weighed on the greenback.
The currency advanced by 0.5% overnight, largely tracking a broader decline in the US dollar. American economic releases showed a contraction in the services sector, the first in nearly a year. At the same time, private payrolls, according to ADP figures, rose by only 152,000, well short of the 173,000 forecast. US Treasury yields dropped in response, dragging the dollar index to six-week lows and reviving talk of a potential Federal Reserve rate cut as early as September.
This environment of softening US data encouraged investors to rotate out of the dollar and into higher-yielding risk assets, helping to buoy the Aussie despite Australia’s own economic headwinds.
Domestic Outlook Remains Fragile
Australia’s local data continues to paint a subdued picture. Wednesday’s GDP figures disappointed, and Thursday’s Household Spending Index showed only modest growth in April. This follows earlier soft readings on retail sales and a narrower trade surplus, largely due to a drop in gold exports, pointing to sluggish momentum heading into the second quarter.
Markets are increasingly anticipating that the Reserve Bank of Australia could begin easing as soon as July, with expectations that the rate cycle will bottom out at 2.85% by early 2026. While exports to China remain stable, they’ve yet to compensate for broader softness in consumer spending.
Technical Analysis
The Aussie has been edging higher from a low of 0.6445, touching a peak of 0.6509 before settling into a narrower range. The strongest momentum occurred around the Asia–London session overlap, underpinned by a bullish MACD crossover and a sequence of higher lows. However, since testing resistance near 0.6510, the price has levelled off just beneath the 30-period moving average, indicating a pause in direction.
MACD momentum has weakened, with the histogram near neutral and signal lines narrowing. Short-term moving averages (5 and 10) are clustering with price, pointing to a possible breakout or a fade, depending on incoming catalysts.
Immediate resistance remains at 0.6509, while support sits at 0.6480. A move above 0.6510 could open the door to 0.6530, whereas a drop below 0.6480 may lead the pair back toward 0.6460.
Traders will now look to Friday’s US nonfarm payrolls for the next major catalyst. Any downside surprise may further depress the dollar and give the Aussie the boost needed to test the upper end of its range near 0.6537. Until then, expect range-bound consolidation with limited upside momentum.
