The Australian Dollar (AUD) remains under pressure against the US Dollar (USD) for the fourth consecutive day, continuing its downward trend on Wednesday. The AUD/USD pair is facing challenges after Australia’s Consumer Price Index (CPI) for January showed a 2.5% year-over-year rise, which matched December's increase but fell short of the market's expectations of a 2.6% rise.
Meanwhile, China's Commerce Ministry announced on Wednesday that Wang Shouwen, the country's International Trade Representative and Vice Minister of Commerce, met with US business leaders to discuss tariffs. However, no additional details from the talks were provided.
A Bloomberg report released on Tuesday indicated that the Trump administration plans to impose stricter chip export controls on China, a major trading partner of Australia. The US is considering tightening restrictions on exports of Nvidia chips and may introduce further limitations on Chinese companies like SMIC and CXMT.
The AUD/USD pair is struggling amidst a rising risk sentiment, compounded by US President Donald Trump's statement on Monday regarding tariffs on imports from Canada and Mexico. Trump confirmed that broad US tariffs would go ahead after a month-long delay, further pressuring global trade sentiment. He emphasized that the US had been “taken advantage of” by foreign countries, reinforcing his intent to impose reciprocal tariffs.
Currently, the AUD/USD pair is trading near 0.6340, breaking below its previous ascending channel, which indicates a weakening bullish bias. However, the 14-day Relative Strength Index (RSI) remains above 50, suggesting that a positive outlook could still hold in the near term.
On the upside, the AUD/USD pair is testing immediate resistance at the nine-day Exponential Moving Average (EMA) of 0.6342. A successful break above this level could boost short-term momentum and help the pair test the key psychological resistance at 0.6400. The next resistance level to watch will be the upper boundary of the ascending channel around 0.6450.
On the downside, the AUD/USD pair is testing support at the 14-day EMA of 0.6331. A decisive break below this level could signal the emergence of a bearish bias and lead the pair to test the psychological support level at 0.6300.
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