Australian Dollar weakens as risk sentiment cools and US Dollar steadies

• Australian Dollar retreats as the US Dollar stabilizes, with investors reassessing risk appetite.
• Australia's GDP data exceeded expectations, but trade policy concerns overshadowed gains, pressuring AUD.
• The Australian Dollar faces renewed selling interest amid trade tensions and uncertainty over US economic policy.
• Technical indicators suggest bearish pressure is building, with AUD/USD slipping toward key support levels.

The Australian Dollar (AUD) is retreating on Thursday against the US Dollar (USD) after three consecutive days of gains. The AUD/USD pair faces selling pressure as risk sentiment weakens and the US Dollar stabilizes. Despite stronger-than-expected GDP data from Australia, concerns over trade policy shifts and global economic uncertainty weighed on the Aussie, leading to a pullback in the pair.

Daily digest market movers: Australian Dollar pressured as USD stabilizes

• The Australian Dollar erased part of its daily gains, despite robust fourth-quarter GDP data showing 0.6% quarterly growth and a 1.3% yearly expansion. Strong public and private sector spending supported the economy, but broader risk-off sentiment limited the AUD upside.
• The Reserve Bank of Australia (RBA) continues to expect economic growth to moderate toward 2% by 2025. While its cautious stance has previously supported AUD strength, investors remain wary of potential policy adjustments in response to inflation and labor market trends.
• Escalating trade tensions weighed on the Australian Dollar, with new US tariffs affecting key trading partners. Tariffs on Canadian, Mexican, and Chinese goods raised concerns over weakening global demand. Given China's role as Australia's top trading partner, signs of reduced Chinese economic activity could further pressure the Aussie.
• Friday's US Nonfarm Payroll report remains a crucial market driver, as labor data will influence expectations regarding the Federal Reserve's next policy move.

AUD/USD Technical Analysis: Bears take control near key support

The Australian Dollar lost momentum on Thursday, slipping toward the 0.6330 region as selling pressure increased. The AUD/USD pair struggles to sustain gains above its 20-day Simple Moving Average (SMA), signaling a shift in momentum toward the downside.

The Moving Average Convergence Divergence (MACD) indicator continues to print decreasing red histogram bars, suggesting a steady bearish pressure. Meanwhile, the Relative Strength Index (RSI) remains in positive territory at 58 but is beginning to flatten, suggesting fading upside momentum.

Key support emerges around the 0.6300 level, where buyers may attempt to stabilize the pair. Below this, further declines could push AUD/USD toward the 0.6270 region. On the upside, immediate resistance now stands near 0.6360, with a break above this level required for any meaningful recovery.