The AUDUSD currency pair is showing a moderate recovery on Tuesday following losses in the previous session. The greenback's weakness reflects growing recession worries in the US economy after President Trump imposed sweeping new trade tariffs.
At the same time, market participants are pricing in potential monetary policy easing by the Reserve Bank of Australia (RBA). Increased expectations of more aggressive rate cuts could limit the Australian dollar's near-term upside potential.
From a technical standpoint, AUDUSD is establishing a downtrend on the daily chart (D1).
Within the wave structure, price is currently in the third downward wave. The bearish momentum accelerated after the breakout below the first wave’s peak at 0.6130. Given that the first wave—formed between September 30, 2024, and January 13, 2025—exhibited a clear impulse pattern, the third wave is expected to extend the decline with even greater force. The downward momentum remains substantial, with the target projected at the 161.8% Fibonacci extension level.
At the same time, the Relative Strength Index (RSI, 14) shows the curve entering oversold territory. This limits the bearish momentum, signaling the potential for a short-term correction.
From a candlestick perspective, bearish pressure has clearly intensified since March 18. The strong long-bodied candle on April 4 completely erased prior bullish recovery attempts, confirming seller dominance and the sustainability of the downward momentum. The renewal of the local low was met with weak buyer response, increasing the likelihood of further decline.
As long as the pair remains below 0.6130, the baseline scenario favors continued downward movement. A breakout above this level could trigger the development of an upward correction.
Short-term prospects for AUDUSD suggest selling, with the target of 0.5640. Part of the profit should be taken near the level of 0.5870. A Stop loss could be set at 0.6350.
Since the bearish trend is short-term, the trading volume should not exceed 2% of your total balance to reduce risks.
This content is for informational purposes only and is not intended to be investing advice.
