AUD/USD Weekly Outlook

RBA cash rate futures currently imply a 62% chance of an RBA cut in May, and those odds are likely to increase further should trimmed mean inflation dip to 3% y/y or lower.

The Australian dollar posted a strong recovery, after coming precariously close to testing the 59c last week. And that has left an apparent v-bottom on the AUD/USD chart, a pattern usually associated with significant lows.

The Australian dollar has dipped its toe into the 50-60c range - a level historically reserved for times of great economic stress. But with traders pricing in a global recession now Trump's tariffs have been announced, AUD/USD could be set for a sustained move within that grizzly range.

AUD/USD is on track for a bullish month for March, even if it handed back over half of its early-month gains. Attention now shifts to tomorrow's RBA meeting for AUD/USD traders, alongside ISM and NFP reports from the US.

Whether the RBA cut in Q2 or Q3 could come down to the quarterly inflation figures released on the 30th April. But AUD/USD traders will of course keep a close eye on the AU monthly inflation report and US core PCE figures released this week.

AUD/USD lacked direction during its least volatile week in 10, while futures traders also failed to commit to a direction by trimming longs and shorts. Perhaps This week's FOMC meeting which includes economic forecasts and get things moving. For now, range-trading strategies are preferred.

With nothing significant domestically lined up, February’s inflation figures for the US is the main calendar event for AUD/USD traders this week. And as always, any update from Trump and his policies will warrant attention.

It was the worst week for AUD/USD in 20 months, wrongfooting large speculators who increased gross-longs for a sixth week. The focus now shifts to RBA mins and Q4 GDP figures domestically, and US PMIs and NFP.

It has been three weeks since AUD/USD fell to a post-pandemic low amid Trump's tariff's headlines. Yet its rebound suggests a significant low has formed. Still, that rebound appears exhausted ahead of key CPI report from Australia and the US. And that means a pullback could be due.

The RBA and RBNZ are expected to cut their cash rates this week, though the 50bp RBNZ cut should see their interest rate drop back beneath the RBA's. This has seen implied volatility for AUD/NZD move higher.

The breakout to a 5-year low on Monday was short lived, before AUD/USD went on to recover as much as 3.5% by the day's high. Given the extended bearish period seen since Q4, perhaps an important cycle low has been set.