The Australian Dollar experienced a slight increase during the Asian trading session on Tuesday, influenced by positive manufacturing data from China. The Caixin Manufacturing PMI for March registered at 51.2, an improvement from February’s 50.8 and surpassing the anticipated figure of 51.1. Despite this positive news, caution prevails in the market as ongoing global trade uncertainties could limit further gains for the Australian dollar, particularly with impending tariffs threatened by the U.S. administration.
Attention now turns toward the Reserve Bank of Australia’s (RBA) upcoming interest rate decision, where it is widely expected that rates will remain at 4.1%. This decision comes as the government navigates a contentious election campaign that focuses on cost-of-living issues and prepares for potential impacts from changes in international trade. The RBA Governor is scheduled to hold a press conference shortly after the announcement, which will provide further insights into the central bank’s stance on economic stability.
Data from Australia’s Retail Sales also reflected modest economic performance, with a monthly increase of 0.2% in February, falling short of the anticipated 0.3% growth. Economists remain sceptical about the strength of consumer spending, particularly following the RBA’s recent move to ease monetary policy for the first time in four years.
In technical terms, the Australian Dollar is trading within a symmetrical triangle pattern on the daily chart. Although there is a modest bullish movement in the AUD/USD pair, there remains a prevailing bearish outlook with prices consistently staying below the 100-day Exponential Moving Average. Should the pair breach the lower boundary of the triangle at 0.6225, further declines to the March low of 0.6186 could be expected. Conversely, upward movement will face resistance at 0.6330 and 0.6352, with a sustained break above these levels potentially leading to a rally towards the upper triangle boundary at 0.6370.
