The Australian dollar bears gains after the commercial balance data in China

• The Australian dollar remains stronger after import export data in China on Monday.
• The Chinese trade balance reached $ 102.64 billion in March, compared to the previous $ 170 billion and expected 77 billion dollars.
• The US dollar is under pressure as a weakness of economic data and signals of the investor confidence in the Federal Reserve.

The Australian dollar (AUD) extends its gains against the US dollar (USD) on Monday, with the support of improving risk morale. The AUD/USD husband rose after US President Donald Trump announced a less intense tariff late Sunday on Chinese imports, including semiconductors and electronics. Explaining previous speculation about exemptions, Trump confirmed that these goods will remain in the current definitions by 20 % related to Fntanil instead of the previously proposed duties by 145 %.

Prices of powerful goods have provided more support to the Australian dollar. However, continuous trade tensions between the United States and China to influence expectations, especially given the high dependence on Australia on Chinese demand and exports.

China’s commercial balance for the month of March, which was measured in Chinese CNY, recorded a significant increase to 736.72 billion June, a sharp increase of 122 billion CN in the previous month. Upon the US dollar terms (USD), the trade surplus exceeded expectations, reaching $ 102.6 billion – higher than the expectations of $ 77 billion, although it is less than 170.51 billion dollars.

The General Administration of China has recognized the challenges facing the country’s exports, describing the current external environment as “complex and severe.” Nevertheless, the officials expressed their confidence, saying that “the sky will not fall.” They have been reported to a strong start for this year, as foreign trade showed growth in both size and quality. The agency also confirmed China’s commitment to enforce all necessary measures to confront American measures and support its national and security sovereignty.

The Australian dollar rises with the US dollar conflicts, amidst the erosion of the investor’s confidence

• The US dollar index (DXY), which tracks the dollar against a basket of six main currencies, extended its losses in the third consecutive session, and slipped to less than 100.00 and near the lowest level in three years of 99.01. The continuous decrease reflects the erosion of the investor’s confidence, amid dilapidated economic indicators and the central bank’s comments.
• The Michigan University’s feelings index fell to 50.8 in April, while inflation expectations increased for a year to 6.7 %. The US Product Prices Index (PPI) increased by 2.7 % year on an annual basis in March, a decrease from 3.2 % in February, with the basic rate decreased to 3.3 %. Uthral claims rose to 223,000, although continuous claims decreased to 1.85 million, indicating a mixed image in the labor market.
• On Sunday, the Federal Reserve Chairman at Minneapolis Neil Kashkari said in the face of the CBS network of the nation that the economic repercussions of Trump’s trade war are largely dependent on the speedy resolution of uncertainty in trade. “This is the biggest confidence that I can remember in the ten years that I was at the Federal Reserve – with the exception of March 2020 when I first hit Cofide,” Kashkari noted.
• Greenback also faces additional winds of high trade tensions between the United States and China, which sparked fears of global economic slowdown. On Friday, the Chinese Ministry of Finance announced a severe increase in the customs tariff for American goods, which increased duties from 84 % to 125 %. The move followed the former President Trump’s decision to raise the definitions of Chinese imports to 145 %.
• The US consumer price index (CPI) has decreased to 2.4 % year on an annual basis in March, a decrease from 2.8 % in February and less than the market expectations by 2.6 %. Core CPI, which excludes food and energy prices, increased by 2.8 % annually, compared to 3.1 % previously and a 3.0 % estimate loss. On a monthly basis, the main CPI decreased by 0.1 %, while Core Core CPI increased by 0.1 %.
• Minutes from the last Federal Open Market Committee meeting (FOMC) indicated that policy makers are almost unanimous in realizing the double challenge of high inflation and slowdown, with a warning that the federal reserve faces “difficult differentials” in the coming months.
• China’s exports increased by 13.5 % year on an annual basis in March, and accelerated from 3.4 % in February, while imports decreased by 3.5 % on an annual basis, a smaller decrease compared to a previously 7.3 % shrinkage.
• The Popular Bank of China (PBOC) is expected to implement more monetary mitigation in the second quarter of 2025. This includes a potential reduction of 15 basis points to the loan reign (LPR) and a minimum of 25 basis points in the RRR requirement (RRR). According to CITI analysts, mentioned in the Reuters report, there is an increasing possibility that domestic stimulus measures will be accelerated in response to increased external pressures.
• On Thursday, AUD found support from reports that Australia was preparing to resume trade negotiations with the European Union (European Union). Moreover, the Wall Street Journal reported that China has also had talks with European Union Chairman Marus Sivkovic, expressing interest in promoting trade, investment and industrial cooperation with the bloc.

Australian dollar tests 0.6300 after exceeding 50 days from EMA

The AUD/USD husband hovers around the level of 0.6300 on Monday. Technical indicators on the daily graph indicate a moderate bias, as the pair is traded above both the enlarged moving averages for nine days and 50 days (EMAS). The relative strength index increased for 14 days (RSI) also over the 50th threshold, supporting upward expectations.

On the upper side, the AUD/USD pair can target psychological resistance at 0.6400, followed by a height of four months at 0.6408.

The immediate support in EMA lies for 50 days at 0.6266, with additional support in EMA for nine days from 0.6210. A clear break down to the bottom of this level weaken the bullish structure in the short term and expose the pair for more negative aspect towards the area of ​​0.5914-less since March 2020-and the main psychological level at 0.5900.

Aud/USD: Daily Chart