Selling AUDUSD down to 0.71150 amid weak Australian data and strong American dollar

AUDUSD is currently trading within the 0.71550–0.71650 range. Persistent geopolitical tensions in the Middle East keep weighing on the pair. Under these circumstances, the US dollar is winning the popularity contest as a safe haven, while riskier assets, such as its Australian counterpart, struggle for attention.

But this is not all. Another headwind for the Aussie is weak domestic data. The country’s current account deficit widened to A$27.1 billion in the first quarter (Q1), while the contribution of net exports to GDP growth fell significantly below forecasts. Given these disappointing results, the upcoming Australian Q1 economic report draws particular interest from investors. They anticipate a quarterly slowdown to 0.5%. If the actual reading comes in worse than expected, the national currency could feel the heat.

On the monetary policy front, the picture is unclear. The Reserve Bank of Australia cannot yet offer much support to the Aussie, despite three rate hikes made this year. Signs of a cooling economy could break this hawkish streak, leaving the RBA with little choice but to slow its tightening pace. Of course, inflation risks remain acute, but the likelihood of another rate hike at the next meeting is low, thereby depriving the AUD of a fundamental tailwind.

In the meantime, the US dollar continues to strengthen, pulling the pair lower. Elevated energy prices boost inflation and reinforce market concerns about the Federal Reserve’s (Fed) intention to maintain its hawkish posture. Friday’s employment report poses another threat to AUDUSD.

On the daily AUDUSD chart, an upside movement is observed within a developing parallel channel. Fractals identify local reversal points, defining the channel’s boundaries. Prices are currently holding above the midline—a technical bullish signal. However, the Chaikin Oscillator is declining from recent peaks, pointing to waning buying momentum and slowing capital inflows.

Consider the following trading plan:

Sell AUDUSD from 0.71600, with Take profit at 0.71150 and Stop loss at 0.71890.

The forecast remains relevant between June 2 and June 8, 2026.