AUD/USD threatens psychological resistance as US Dollar bulls back down

• AUD/USD recovers as bulls eagerly approach psychological resistance at 0.6500.
• US Jobless Claims on Thursday take the spotlight following Wednesday's disappointing ADP report.
• Australia's trade balance data could provide additional insight into the resilience of the export industry to tariffs.

The Australian Dollar (AUD) is gaining confidence against the US Dollar (USD) on Wednesday, with bulls eagerly approaching a critical barrier of resistance.

With AUD/USD trading above 0.6493 at the time of writing, the 0.6500 psychological level is on the horizon, which has proven to be a challenging level to clear over recent weeks. 

After falling to a low of 0.5914 in April, the Australian Dollar experienced a sharp rally, pushing prices above the 200-day Simple Moving Average (SMA). As the 200-day Simple Moving Average (SMA) continues to provide support for the short-term move at 0.6437, the 0.6500 zone came into focus in May, limiting the upside potential for AUD/USD on several occasions.

To continue progressing along an upward trajectory over the upcoming months, a clear break above the 0.6500 level is required, which is often provided by a fundamental catalyst.

AUD/USD daily chart

Australia's Trade Balance and US Jobless Claims will influence AUD/USD direction

On Thursday, the economic calendar includes high-impact economic data releases scheduled for Australia and the United States, which could potentially push prices out of this range.

At 01:30 GMT, the Australian Bureau of Statistics will release the Trade Balance data for April, with Australia expected to report a MoM surplus of A$6.1 million. A positive value would suggest that Australia's export industry remained resilient despite the implementation of tariffs on imports to the US, which may support a positive outlook for the Australian economy and for the Australian Dollar. The opposite would apply if the April figures miss expectations by a large margin and data suggest that the export industry could be more vulnerable to the effects of tariffs than initially expected.

Meanwhile, investors will be monitoring the weekly release of US Initial Jobless Claims, which are expected to show the previous week falling to 230K, down from 240K reported last week. Wednesday's ADP numbers showed that 37,000 jobs were added to the US private sector in May, missing expectations of an increase of 115,000 jobs.

With the May release of Nonfarm Payrolls (NFP), which provides insight into the health of the broader US labour market, any changes in the labour situation is often reflected in the USD exchange rate since this has a direct impact on interest rate expectations and the Federal Reserve's (Fed) projected monetary policy stance.