One of the best-performing currencies of the day is the Australian Dollar and has also shown a strong performance over the past week. However, the AUDUSD appears to be approaching a key resistance level. For this reason, traders are contemplating if the price is about to be rejected or if it is gaining momentum.

AUDUSD - Technical Analysis

On a 2-hour timeframe the price of the AUDUSD seems to be trading very close to a range of resistance. The resistance levels are between 0.64928 and 0.65363. If the AUDUSD breaks above this level, the exchange rate will be trading at the highest price since November 2024. However, on the larger timeframes, we can see that traditionally over the past 4-years the AUDUSD tends to have traded at higher levels.

The average price of the past 5 years is 0.68794 and most trend-based indicators are currently providing a bullish bias due to the current momentum. So far this week the US Dollar is the worst performing currency. The AUD is the third-best-performing after the New Zealand Dollar and Canadian Dollar.

The strength of the Australian Dollar is partially due to the weakness of the US Dollar, but also due to the rise in commodities. Particularly Gold is known to have a slight positive correlation with the Australian Dollar. Gold currently trades 0.70% higher so far today.

US and The US Dollar

One of the key drivers of the AUDUSD will be the US Dollar and the country’s employment data. The employment sector and the Institution for Supply Management have released disappointing news. Both are known to create high levels of volatility. The market was particularly troubled by May’s Automatic Data Processing (ADP) report, which showed a nonfarm payroll increase of just 37,000, well below the forecast of 111,000 and the previous months’ 60,000. This makes the ADP report the weakest release in two years.

Analysts highlight declines in manufacturing and mining employment, partially offset by gains in the services and finance sectors. In response, President Donald Trump renewed his calls for the Federal Reserve to start cutting interest rates. The President continued to point out that the European Central Bank has already made multiple rate cuts and the Bank of England has also recently cut rates. Currently, the market does not expect a cut until September 2025, but this would depend on inflation and employment data.

The US Dollar is under additional pressure amid escalating global trade tensions, with 50% tariffs on steel and aluminium imports taking effect yesterday. According to economists, this raises the risk of retaliation, particularly from the Eurozone, Canada, and Mexico. Trump also stated that reaching a trade agreement with Chinese President Xi Jinping would be extremely difficult. This has heightened concerns over intensifying US-China tensions and the potential for a global economic downturn.

For this reason, the US Dollar is under pressure not only from the employment data but also from the uncertainty regarding the future US policy. A key factor will be tomorrow’s NFP Employment Change and the US Unemployment Rate. The unemployment rate is likely to remain unchanged, however, the NFP is expected to fall from 177,000 to 130,000. If the NFP data also deteriorates, the US Dollar can come under immense pressure. Below traders will be able to watch live analysis during the NFP release on YouTube:

NFP Live Analysis - The US Dollar

Key Takeaway Points:

• The Australian Dollar is one of the strongest performers this week, supported by weak US sentiment and Gold bullish momentum.
• AUDUSD is testing a resistance zone (0.64928–0.65363); a breakout could push it to levels not seen since November.
• US Weakness: Disappointing ADP data and rising trade tensions are weighing heavily on the US Dollar.
• All Eyes on NFP: Tomorrow’s Nonfarm Payroll report is critical, further weakness could intensify USD selling pressure.