- Bearish USD/JPY outlook: Increasing trade tensions, weak consumer confidence, or dovish comments from the Fed might push USD/JPY down to 142.5.
- Bullish USD/JPY outlook: Easing trade tensions, stronger consumer sentiment, or a hawkish signal from the Fed could help USD/JPY rise to 148.647, surpassing the 50-day EMA.
Today’s complete forecast for USD/JPY includes chart setups and trading insights.
AUD/USD Focus: Labor Market Data to Influence RBA Expectations
On May 16th, trade developments will likely influence AUD/USD trends. With the 90-day trade ceasefire ticking, progressing on trade agreements is crucial to avoid tariffs jumping back to 125% for US goods and 145% for Chinese products.
Since China takes up about a third of Australia’s exports, failing to reach a contract could impact demand and Australia’s trade conditions. If the trade-to-GDP ratio exceeds 50%, reduced demand for Australian goods would affect the economy, possibly leading to a prolonged RBA policy stance. On the flip side, trade agreements could boost demand and prompt speculation about multiple RBA rate cuts in 2025.
Additionally, Beijing might introduce new stimulus measures to mitigate the effects of tariffs on its economy. These measures aimed at enhancing domestic consumption could increase demand for the Australian dollar.
After an employment report that exceeded forecasts on Thursday, economists are still predicting several RBA rate cuts in 2025. However, trade agreements could soften such expectations. Shane Oliver, AMP’s Head of Investment Strategy and Chief Economist, commented on the Jobs Report:
“Post-employment data, Australia’s Money Market reflects a 96% probability of a 0.25% RBA rate reduction on Tuesday, with three such reductions being expected by the year’s end.”
AUD/USD: Key Scenarios to Monitor
- Bearish Australian Dollar Scenario: Rising tensions between the US and China or dovish RBA statements may push AUD/USD down to a 50-day EMA, with support at $0.63623.
- Bullish Australian Dollar Scenario: Easing US-China trade tensions, stimulus from Beijing, or hawkish signals from the RBA could push the pair towards a 200-day EMA, potentially reaching the May 7 high of $0.65144.
For a deeper analysis of AUD/USD trends and transaction data, additional insights can be found here.
Aussie Dollar Daily Outlook: Consumer Sentiment and Rate Differentials
Later today, an unexpectedly high Michigan consumer sentiment index could dampen bets on Fed rate cuts. A less dovish Fed could widen the interest rate gap between the US and Australia in favor of the US dollar, potentially driving AUD/USD down to support around $0.63623 and a 50-day EMA.
Conversely, a low reading could spark speculation about a Fed rate cut in the third quarter of 2025, possibly allowing AUD/USD to rise above the 200-day EMA at $0.65144.
