AUD/USD, NZD/USD, USD/JPY Analysis: Key Levels and Trade Talk Impacts

Australian Dollar Holds Steady Amid US-China Trade Developments

The Australian Dollar (AUD) extended its gains against the US Dollar (USD) for the second straight day on Tuesday. Optimism surrounding a possible easing of trade tensions between the US and China supported AUD/USD. The ongoing meetings between US and Chinese advisors in London have improved market sentiment, lifting the Aussie.

Moreover, Australia’s Westpac Consumer Confidence rose by 0.5% month-over-month in June, though it marked a sharp slowdown from May’s 2.2% rise. Despite this, it was the second consecutive monthly increase, largely supported by the Reserve Bank of Australia’s recent rate cut. Hopes of easing inflation also contributed to the mildly positive consumer outlook.

China’s economic performance plays a vital role in AUD movement due to strong trade ties. China’s CPI dropped 0.1% YoY in May, while PPI fell further by 3.3%, signalling weakness in domestic demand. However, China’s Trade Balance improved, with exports rising 6.3%. These mixed signals provided limited support to AUD, though the export increase slightly boosted sentiment.

US Economic Data and Dollar Sentiment Keep AUD/USD in Focus

The US Dollar Index hovered around the 99.00 level, reflecting market caution ahead of key inflation data. US consumer inflation expectations for the year ahead declined to 3.2% in May 2025, from 3.6% in April. Strong inflation could fuel speculation of a tighter Fed stance, which would weigh on AUD/USD.

Moreover, US labour market data came in slightly stronger than expected. Nonfarm Payrolls rose by 139,000, surpassing the forecast of 130,000. The unemployment rate held steady at 4.2%, and wage growth remained at 3.9%. These figures limited USD losses but failed to drive a significant rally due to broader fiscal concerns.

On the other hand, political developments added to the US dollar’s volatility. President Trump urged the Fed to cut rates, while the House passed a massive tax-and-spending bill. Fears of rising deficits and higher bond yields weighed on investor confidence, increasing pressure on the greenback and benefiting AUD/USD.

Overall, AUD/USD is supported by trade optimism and weakness in the US Dollar, but gains remain capped by soft Australian data and cautious global sentiment. A clear breakout above key resistance near $0.6600 could require stronger Chinese data or a sharp decline in upcoming US CPI figures.

AUD/USD Technical Analysis – Ascending Broadening Wedge Pattern

The 4-hour chart for AUD/USD shows that the pair is trading within an ascending broadening wedge pattern, between the $0.6430 and $0.6600 levels. Despite the consolidation, the pair remains positive and is seeking upside momentum. However, the short-term rebound in US dollar strength has kept the upside limited in AUD/USD. A break above the $0.6600 area would likely trigger strong upward momentum.

NZD/USD Technical Analysis – Bullish Price Action

The 4-hour chart for NZD/USD shows that the pair is forming bullish price action above the $0.58 area. The long-term support at $0.55 has held, and a strong rebound has developed, keeping the pair in positive territory. A break above $0.6020 has opened the door for further upside.

USD/JPY Technical Analysis – Descending Broadening Wedge

The 4-hour chart for USD/JPY shows that the price is trading within a descending broadening wedge pattern. Multiple rebounds from the 142 area indicate short-term strength. A break above 148.30 could trigger a move toward 151, and a break above 151 would confirm a bottom and initiate a strong upward move. The pair is currently consolidating within the descending broadening wedge and is seeking its next direction.