Behind The Quiet Strength of AUD/USD

The Aussie isn’t just hanging in there, it’s punching above its weight. As tariff drama and American political chaos swirl, AUD/USD is holding its ground near 0.6500. It’s not just resilience. It’s a calculated stance by the market.

Between a shaky U.S. economy and mixed macro signals, traders are finding reasons to rotate out of USD and into currencies with cleaner fundamentals and better growth stories. And right now, the Aussie is quietly fitting that bill.

What Traders Need to Know Right Now:

1. Aussie Trade Surplus Softens, But Still Solid

Australia’s trade balance came in at 5.41B in April, missing the 6.1B forecast and down from March’s 6.89B. Exports dropped 2.4%, while imports rose 1.1%. It’s a bit of a slip, but not a collapse. The surplus is still healthy and shows Australia’s trade machine is holding up.

2. Technicals Say 0.6500 Is Just the Start

AUD/USD is sticking close to 0.6500, with bulls eyeing 0.6537 (seven-month high). If that breaks, the next target is the channel top near 0.6600. The RSI is above 50, and price is holding above the 9-day EMA. Key support rests at 0.6400, a break below there opens the door to 0.63450.

3. Weak U.S. Data Keeps the Pressure on the Dollar

U.S. ISM Services PMI just slipped below 50 to 49.9, contraction territory. That’s got traders questioning the so-called soft landing. Combine that with dismal ADP numbers (only +37K vs. +115K expected), and you’ve got the recipe for a softer greenback.

4. RBA Likely to Stay Cautious, And That’s a Good Thing

RBA minutes from May suggest a preference for a cautious approach. No rush to hike, but also no panic to slash rates. In a world of central bank overreactions, this steady tone helps AUD look attractive. Assistant Governor Sarah Hunter also flagged that Aussie exporters are well-positioned to weather global tariff noise.

5. China Data Is a Mixed Bag, But Not a Red Flag

While Chinese manufacturing PMIs dipped, services held steady. With Beijing expected to roll out fresh fiscal support, the Aussie, tightly linked to Chinese demand, still has tailwind potential.

Here’s the takeaway

The Aussie is acting like the adult in the room while the U.S. plays fiscal chicken. It’s not risk-free, but for now, it’s a cleaner long.

If you’re watching AUD/USD, keep your eyes on U.S. data, tariff back-and-forth, and broader macro tone. This pair isn’t waiting around, it’s moving with conviction.

Plan accordingly. Tighten your stops. Ride the trend. And don’t ignore the macro when the micro starts looking noisy.