AUD/USD Forecast: A Deep Dive into Fundamental and Technical Trends (2025)
Introduction
- The AUD/USD is one of the most traded currency pairs in forex, which makes it highly liquid and very sensitive to changes in global macroeconomic fundamentals. In this article, we will analyze the Australian Dollar versus the U.S. Dollar from a fundamental perspective and based on both fundamental and technical analysis in order to identify potential influences for 2025.
- Fundamentally, if the trade between the two countries forms the basis for policy then it is vital to continuously analyze both economies.
Fundamental Analysis for AUD/USD (2025)
Reserve Bank of Australia (RBA) Policy Outlook
The RBA has taken a relatively hawkish outlook at the beginning of 2025. With inflation still present and a tight labour market they have increased their cash rate to 4.35%. In other words, another rate hike is possible if wage growth continues to climb.
U.S. Federal Reserve Interest Rate Direction
The Federal Reserve is at the beginning of a cautious easing cycle, having lowered their interest rate by 25 basis points at the time of writing (Q1 2025) in response to stagnant job creation and slowing inflation. Consequently, a net positive effect on AUD in a delay in or directional reverse of policies.Commodity Prices
The Australian economy is benefit heavily on commodities, which is especially important in Iron Ore and Coal. Demand from global markets expands, and the growth from India and regions in east Asia drives demand and promotes upward prices.Trade Balance and Economic Expansion
Australia has had a trade balance surplus of $12 billion $AUD at the time of writing.
- Reserve Bank of Australia (RBA) Policy Outlook
The RBA has taken a relatively hawkish outlook at the beginning of 2025. With inflation still present and a tight labour market they have increased their cash rate to 4.35%. In other words, another rate hike is possible if wage growth continues to climb. - U.S. Federal Reserve Interest Rate Direction
The Federal Reserve is at the beginning of a cautious easing cycle, having lowered their interest rate by 25 basis points at the time of writing (Q1 2025) in response to stagnant job creation and slowing inflation. Consequently, a net positive effect on AUD in a delay in or directional reverse of policies. - Commodity Prices
The Australian economy is benefit heavily on commodities, which is especially important in Iron Ore and Coal. Demand from global markets expands, and the growth from India and regions in east Asia drives demand and promotes upward prices.
Trade Balance and Economic Expansion
Australia has had a trade balance surplus of $12 billion $AUD at the time of writing.
Technical Analysis of AUD/USD (2025)
- Daily Chart Perspective
The pair has had an upward trend since January 2025 and we have the 50-day moving average now crossing above the 200-day moving average, this being known as the Golden Cross. A bullish signal!- Support & Resistance Areas Immediate Resistance: .6880
Major Resistance: .7050 (April 2024 high)
Support Level: .6720
Longer-term Support: .6600 (2023 yearly low)- RSI and MACD
RSI is at 63. RSI indicates slight bullish momentum with room before being overbought.
MACD is currently above the signal line with the histogram widening confirming upward momentum.- Fibonacci Retracement
Looking at the low of 0.6350 (Nov 2024) to the most recent high at 0.6900 creates some key retracement levels for watchful eyes:
38.2%: 0.6712
50.0%: 0.6625
61.8%: 0.6538
These are also areas to look to buy if there is a retracement scenario.
Market Sentiment and Outlook
Retail traders are mixed with 51% long and 49% short and the institutional flow appears to be upside on this pair. The AUD is viewed as a commodity-led hedge against USD weakness.
Going forward, if the Fed keeps cutting rates and the RBA stays steady or raises rates, we should be able to see an AUD/USD break above 0.7000 sometime in Q3 2025.
Conclusion
The AUD/USD pair has potential strength in 2025 based on diverging central bank policy, positive Australian trade data and positive technical signals. Traders should look for key resistance near 0.7050 and look for pullbacks to make long entries as the trend progresses.
