Aussie Dollar Extends Rally on China Trade Boost and Fed Speculation, Nears Weekly Highs

Traders' Opinions

Summary:

The Australian Dollar rallied for a fourth consecutive session on Friday, buoyed by stronger-than-expected Chinese trade figures and renewed pressure on the U.S. Dollar amid speculation surrounding the Federal Reserve’s leadership and growing signs of a cooling labor market.

BUY AUDUSD

Close Time

CLOSED

0.65250

Entry Price

0.65800

0.64900

0.66335 -0.00048 -0.07%

35.0

Pips

Loss

0.64900

0.64899

Exit Price

0.65250

Entry Price

0.65800

The Australian Dollar outperformed major peers on Friday, extending a multi-day rally as global investors digested robust trade data out of China and remained cautious over the Federal Reserve's trajectory amid deepening political and economic uncertainty in the United States. The AUD/USD pair rose for a fourth consecutive day, reversing early-week losses and closing in on a key resistance area near 0.6530—levels last tested earlier in the week. By late European trading hours, the Aussie had strengthened close to 1% on the week, underscoring its resilience in the face of conflicting global cues.

At the heart of the currency’s rise was a significant upside surprise in Chinese export data. On Thursday, Beijing reported that outbound shipments rose by 8% in July from a year earlier, following a 7.2% increase in June. The figure came in well above market expectations, alleviating some of the bearish sentiment that had been surrounding the world’s second-largest economy in recent months. Alongside that, China’s trade surplus widened substantially to CNY 705.1 billion, up from CNY 585.96 billion in June. The figures suggest not only that Chinese industrial demand remains intact but also that exporters are successfully navigating the external challenges posed by a weakening global environment and trade tensions with the United States.

For Australia—a country whose economic fortunes are deeply intertwined with China through commodities like iron ore, coal, and copper—the upbeat trade numbers injected a strong dose of optimism. Market participants widely interpreted the data as a sign of durability in Asia-Pacific trade flows, which in turn bodes well for Australian exports and risk-sensitive assets broadly. Risk sentiment, which had been tentative at the start of the week, improved markedly following the data release, pushing investors back into carry trades and commodity-linked currencies such as the Aussie.

While the tailwind from China provided external support, developments in the United States only added to the AUD/USD pair’s bullish momentum. The greenback remained under pressure on Friday, struggling to mount a meaningful recovery as speculation about potential leadership changes at the Federal Reserve continued to ripple through markets. Rumors that current Fed Governor Christopher Waller could replace Jerome Powell under a second Trump administration gained traction this week, while economic adviser Claudia Miran was floated as a possible nominee to fill the vacancy left by outgoing board member Adriana Kugler. The prospect of a more dovish, politically-aligned Fed has begun to anchor expectations that rate cuts may be coming sooner than later—regardless of official rhetoric from sitting policymakers.

Adding to the uncertainty, new U.S. labor market data further dented confidence in the economic outlook. Weekly jobless claims rose unexpectedly by 8,000 to 226,000, missing analysts' forecasts of 221,000. The increase, while modest, underscored a trend of softening in labor market conditions and reinforced concerns that the post-pandemic employment boom may be losing steam. It also provided fresh justification for market participants who believe that monetary easing is not only probable but necessary.

That said, not all voices within the Fed are aligned with this narrative. St. Louis Fed Governor Raphael Bostic on Thursday attempted to cool speculation about an imminent rate cut, warning that global tariff risks—particularly the renewed trade rhetoric out of Washington—could add upward pressure on prices and complicate the inflation outlook. Despite Bostic’s hawkish tone, futures markets are now pricing in nearly a 90% chance of a rate cut after the summer, leaving the U.S. Dollar pinned near recent lows.

Technical Analysis

From a technical standpoint, the Aussie’s climb has been orderly and well-supported by favorable momentum indicators. Earlier in the week, AUD/USD successfully unwound overbought conditions on the Relative Strength Index (RSI), clearing the path for further upside without entering dangerous territory. The pair has since maintained its position above the 50-day Exponential Moving Average (EMA50), which continues to act as dynamic support and reinforces the short-term bullish trend.

The current price action suggests the pair is riding a minor bullish wave, trading along a supportive upward trendline. As long as the AUD/USD pair holds above the 0.6500 zone, short-term dips are likely to be viewed as buying opportunities. The 0.65245 level is now seen as the immediate technical hurdle. A decisive break above this area could open the door toward the next upside target at 0.6580, a level that aligns with recent swing highs and momentum projections. Should the pair fail to clear resistance in the near term, support is expected near 0.65047 and 0.64954—zones where dip-buying activity could intensify, given the broader risk-on sentiment.

TRADE RECOMMENDATION

BUY AUDUSD

ENTRY PRICE: 0.6525

STOP LOSS: 0.6490

TAKE PROFIT: 0.6580

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

WTI crude trades around $63.20 amid hopes of US-Russia diplomacy on Ukraine and rising OPEC+ supply, with technicals pointing to further downside towards $60.00.

SELL WTI

Close Time

CLOSED

63.500

Entry Price

60.000

65.500

59.210 -0.599 -1.00%

84.4

Pips

Profit

60.000

62.656

Exit Price

63.500

Entry Price

65.500

A glimmer of diplomacy has emerged in the prolonged Ukraine crisis, injecting a sense of cautious optimism into global energy markets. Kremlin aide Yuri Ushakov confirmed on Thursday that U.S. President Donald Trump and Russian President Vladimir Putin are expected to hold direct talks in the coming days — the first such summit since 2021. A senior White House official added that the meeting could take place as early as next week.

This development has tempered concerns around geopolitical-driven supply shocks, particularly those stemming from Russian crude exports. While no formal ceasefire is yet in place, the possibility of renewed negotiations has prompted traders to dial back risk premiums tied to worst-case supply scenarios.

"Markets are forward-looking. Even the suggestion of diplomacy between Washington and Moscow cools some of the more extreme fears priced into crude," one senior analyst noted. "For now, this leans bearish unless talks collapse or conflict escalates dramatically."

Adding further weight to the bearish tone is the latest decision by the Organization of the Petroleum Exporting Countries and allies (OPEC+), which agreed in a virtual meeting on Sunday to increase production by 547,000 barrels per day (bpd) for the month of September. This marks the fifth consecutive month of production hikes, signaling the alliance’s continued focus on meeting global demand — albeit at the risk of softening prices.

The September increase follows prior monthly output boosts: 138,000 bpd in April, 411,000 bpd in May, June, and July, and 548,000 bpd in August. The market had largely anticipated some level of increase, but the continuation of such consistent hikes raises concerns of oversupply.

"Additional increases in OPEC production remain the overriding negative consideration," analysts at Ritterbusch and Associates wrote in a client note. "Meanwhile, tariff uncertainties and macroeconomic headwinds continue to argue for a lower pricing environment."

With global inventories showing signs of recovery and demand growth still clouded by uneven economic data from China and Europe, the oil market appears caught in a delicate supply-demand balancing act.

Balancing the bearish narrative somewhat, the latest weekly data from the U.S. Energy Information Administration (EIA) revealed a larger-than-expected draw in crude stockpiles. For the week ending August 1, U.S. commercial crude inventories dropped by 3.029 million barrels — a sharp reversal from the prior week’s substantial 7.698 million barrel build. Analysts had expected a more modest draw of just 1.1 million barrels.

Though the drawdown hints at steady U.S. consumption or export strength, it was not enough to counteract the broader downward sentiment in the market. Traders appear more focused on macro-level supply shifts and geopolitics than weekly fluctuations in storage data.

Technical Analysis

From a technical standpoint, WTI crude has broken below a key daily support zone and now trades in a vulnerable position. Price action has confirmed a close below the $63.35 level, which previously acted as a crucial floor for bullish defenses. That level now flips into resistance, strengthening the case for continued declines.

Technically, crude remains under bearish pressure, constrained by a descending trendline and sustained trading below its 50-period exponential moving average (EMA50). The Relative Strength Index (RSI) previously signaled oversold conditions, triggering a minor relief rally — but that bounce has since faded.

Traders are now eyeing the next significant support near $60.00. A decisive move below that threshold could open the door to deeper losses, especially if macro headwinds — such as stronger U.S. dollar, rising interest rates, or renewed OPEC+ output growth — persist.

TRADE RECOMMENDATION

SELL WTI

ENTRY PRICE: 63.50

STOP LOSS: 65.50

TAKE PROFIT: 60.00

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

Fundamentally, the U.S.-Japan interest rate differential remains the primary driver behind the appreciation of the USDJPY, while technical analysis continues to indicate an upward trend trajectory.

BUY USDJPY

Close Time

CLOSED

147.632

Entry Price

154.100

145.700

155.597 +0.252 +0.16%

4.0

Pips

Profit

145.700

147.672

Exit Price

147.632

Entry Price

154.100

Fundamentals

The primary drivers behind the USDJPY remain the interest rate differential between the U.S. and Japan and the divergence in monetary policy trajectories of their respective central banks. The U.S. 10-year Treasury yield remains around 4.2%, with recent technical factors related to bond supply, demand, and auction dynamics enhancing the dollar's appeal against high-yield currencies. Elevated U.S. interest rate levels support the dollar's upward momentum.

Meanwhile, Japan's interest rate outlook and inflation expectations are subtly shifting. The July meeting minutes of the Bank of Japan reveal increased discussions about potential policy normalization, and the 10-year Japanese government bond yield has risen to approximately 1.50%. This indicates that market expectations of Japan's prolonged ultra-loose monetary stance are gradually being eroded by rising inflation. If the Bank of Japan accelerates its rate hike pace, the upward trajectory of USDJPY could be partially offset.

Additionally, political and regulatory developments are exerting short-term influence on market sentiment. Changes in Federal Reserve personnel and potential policy candidate shifts (such as recent reports regarding Federal Reserve Board nominations) have impacted market expectations for the pace of future rate cuts. Divergent forecasts for earlier or delayed easing directly affect the dollar's strength and exchange rate volatility.

Overall, the U.S. dollar remains supported by its safe-haven appeal and interest rate differential characteristics. However, if Japan's monetary policy shifts toward acceleration, market pricing will quickly adjust accordingly.

Technical Analysis

Bulls Continue to Dominate the Market Prior to the Bank of Japan's Actual Interest Rate Hike_1

In the 1D timeframe, the USDJPY has been trending within an upward channel recently. The medium-term bullish trajectory established since the April lows remains intact. Additionally, the breach of key resistance levels at 148.64 and the psychological threshold of 150.00 has further expanded the upside potential.

On the upside, the USDJPY faces resistance at 151.20. A successful breakout above this level could extend the rally towards 154.50.

On the downside, initial support is identified between 146.60 and 146.90. A breakdown below this zone may lead the price to decline towards approximately 145.85.

It is recommended to go long at the lows.

Trading Recommendations

Trading Direction: Buy

Entry Price: 147.20

Target Price: 154.10

Stop Loss: 145.70

Valid Until: August 22, 2025 23:00:00

Support: 146.61, 145.85.

Resistance: 150.91, 151.20.

Risk Warnings and Disclaimers

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Tank

Economic

Forex

Summary:

The Reserve Bank of Australia (RBA) is set to convene next week, with markets widely expecting a 25 bps rate cut to 3.6% on Tuesday. Should the RBA unexpectedly adopt a hawkish stance, the Australian dollar (AUD) could surge past 66 US cents.

SELL AUDUSD

EXP

EXPIRED

0.66800

Entry Price

0.63000

0.70000

0.66335 -0.00048 -0.07%

Pips

EXPIRED

0.63000

0.64878

Exit Price

0.66800

Entry Price

0.70000

Fundamentals

The Reserve Bank of Australia (RBA) will hold its policy meeting next week. Market consensus anticipates a 25 bps rate reduction to 3.6% on Tuesday, following last month's surprise decision to hold rates steady. The RBA will also release its latest economic forecasts. Should the central bank pivot unexpectedly toward hawkishness, the AUD may break above 66 US cents.

In late U.S. trading, U.S. President Trump is poised to nominate his economic advisor Stephen Miran to replace the recently resigned Kulger as a Fed governor. Miran has drawn significant attention this year, with speculation that the policy blueprint behind Trump's tariff measures stems from his book, A User's Guide to Reshaping Global Trade. In the book, he explicitly advocates for lowering U.S. interest rates to weaken the dollar and boost export competitiveness. Should he join the Fed, his stance would undoubtedly be strongly dovish. The market reacted swiftly: U.S. short-term bond yields and the dollar tumbled, while U.S. equities and gold rallied.

Technical Analysis

On the 4-hour chart , AUDUSD shows a bullish crossover between the EMA12 and EMA200. The Bollinger Bands are widening upwards, with moving averages trending higher. The RSI stands at 61—not yet overbought—while the MACD lines have not formed a bearish crossover, indicating sustained upward momentum in the near term. Key resistance levels ahead include the previous high at 0.6541 and the psychological 0.66 mark.

On the weekly chart , each rebound toward the EMA200 has historically been followed by a corrective decline. Given that the EMA200 is currently near 0.668, aligning closely with the psychological levels of 0.66 and 0.67, significant selling pressure is expected to emerge. The RSI at 54 suggests no oversold conditions, meaning a short-term rally remains possible. Traders are advised to favor selling on rallies as the primary strategy.

AUD Soars! Nearing a Breakthrough of 66 US Cents?_1

AUD Soars! Nearing a Breakthrough of 66 US Cents?_2

Trading Recommendations

Trading Direction: Sell

Entry Price: 0.668

Target Price: 0.63

Stop Loss: 0.7

Support: 0.64/0.638/0.63

Resistance: 0.66/0.668/0.7

Risk Warnings and Disclaimers

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Tank

Economic

Forex

Summary:

An increasing number of market participants are positioning for the Federal Reserve to cut rates by at least 25 basis points in September, particularly after a series of dismal labor market data were released last week.

BUY USDJPY

Close Time

CLOSED

147.200

Entry Price

148.100

146.600

155.597 +0.252 +0.16%

90.0

Pips

Profit

146.600

148.100

Exit Price

147.200

Entry Price

148.100

Fundamentals

Japan's weak average cash earnings data revealed a decline in wages and spending following an initial recovery earlier this year. The softness in spending and wages signals subdued inflation, which in turn weakens the Bank of Japan's (BOJ) incentive to raise interest rates in the coming months. However, yen losses were limited as Washington provided some support and clarification on trade tariffs to Tokyo. Ryosei Akazawa, Japan's chief trade negotiator, stated on Thursday that effective U.S. tariff rates on Japanese goods will be capped at 15%.

U.S. President Donald Trump's trade tariffs took effect on Thursday, imposing 10%-50% duties on exports from regional economies to the U.S. Despite Trump's clear indication that most tariffs would be levied, markets are now concerned about their economic impact. After steep declines earlier in the week, the U.S. Dollar Index (DXY) and DXY futures pared losses during Asian trading hours. Bloomberg reported on Thursday that Federal Reserve Governor Christopher Waller is the top candidate to succeed Chair Jerome Powell next year. Waller was one of two rate-setting committee members who voted for a rate cut at the Fed's July meeting, aligning with Trump's calls for lower rates. Growing expectations suggest the Fed will cut rates by at least 25 basis points in September, especially after last week's dismal labor market data.

Technical Analysis

Based on the 4H chart, USD/JPY's Bollinger Bands are narrowing, with moving averages converging. Prices are oscillating around EMA12 and EMA200, signaling an impending trend reversal. Following the MACD golden cross, the signal line and the MACD line also converged and are pulling back toward the 0-axis. The price has tested the EMA200 three times without breaking below, forming a hammer candlestick. With RSI at 46 (not overbought) and its lows forming multiple bottoms, these signs suggest a high probability of short-term upside. Resistance levels are further seen at EMA50 and the previous high, at 147.7 and 148.1, respectively. Regarding the daily chart, USD/JPY is retracing the triangle breakout level after crossing above the upper boundary. Currently, the signal line and the MACD line have not pulled back to the 0-axis area, indicating the need for adjustments. Adjustments typically occur in two forms: time-for-space or space-for-time. USD/JPY is likely to adopt the time-for-space approach, consolidating sideways to absorb downward pressure. Therefore, buying the dips is recommended.

Consolidation to Build Up Momentum: USD/JPY Poised for a Surge!_1

Consolidation to Build Up Momentum: USD/JPY Poised for a Surge!_2

Trading Recommendations

Trading direction: Buy

Entry price: 147.2

Target price: 148.1

Stop loss: 146.6

Support: 147/146.6/145

Resistance: 147.7/148.5/151

Risk Warnings and Disclaimers

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Gerik

Forex

Economic

Summary:

As of August 7, 2025, EUR/CAD is trading at approximately 1.6002, approaching a significant resistance level at 1.6050. This upward movement is supported by a weaker U.S. dollar and expectations of a Federal Reserve rate cut in September...

BUY EURCAD

Close Time

CLOSED

1.60050

Entry Price

1.60500

1.59500

1.60810 -0.00053 -0.03%

15.8

Pips

Profit

1.59500

1.60208

Exit Price

1.60050

Entry Price

1.60500

Overview

The Euro has strengthened against the Canadian Dollar, trading at 1.6002 on August 7, 2025, up from 1.5945 on August 6. This appreciation is attributed to a combination of factors, including a softer U.S. dollar and positive market sentiment towards the Eurozone economy. The European Central Bank's recent policy stance and the Federal Reserve's dovish outlook have contributed to this trend.

Market Sentiment

Investor sentiment remains cautiously optimistic. The market anticipates a 94% probability of a Fed rate cut in September, which has weakened the U.S. dollar. Concurrently, geopolitical factors and economic data from the Eurozone are supporting the euro. However, concerns about U.S. political developments and their potential impact on monetary policy add an element of uncertainty.

Technical Analysis

EUR/CAD Tests Key Resistance at 1.6050—Bullish Momentum Builds_1

Resistance Levels: The immediate resistance is at 1.6050, with subsequent levels at 1.6100 and 1.6130.

Support Levels: Key supports are at 1.5950, 1.5900, and 1.5850.

The Relative Strength Index (RSI) is approaching overbought territory, suggesting potential for a pullback. The Moving Average Convergence Divergence (MACD) is bullish, but divergence could signal weakening momentum. The pair is trading above the 50-day moving average, indicating a prevailing uptrend.

Trading Recommendation

Entry: Consider entering long positions on a confirmed breakout above 1.60050, with a close above this level on higher volume to validate the move.

TP: 1.60500 (next resistance zone)

Stop Loss: Place a stop below 1.5950 to manage risk in case of a false breakout.

Risk Warnings and Disclaimers

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Gerik

Forex

Summary:

As of August 7, 2025, GBP/JPY has risen to approximately 198, surpassing the 197.00 level following the Bank of England's 25 basis point rate cut to 4.00%....

BUY GBPJPY

Close Time

CLOSED

197.949

Entry Price

198.500

197.500

207.175 +0.075 +0.04%

44.9

Pips

Loss

197.500

197.497

Exit Price

197.949

Entry Price

198.500

Overview

The British pound strengthened against the Japanese yen after the Bank of England's rate cut decision. The BoE's cautious approach, combined with expectations of a weaker U.S. dollar, has bolstered the pound's appeal. GBP/JPY's rise to 197.18 reflects these dynamics.

Market Sentiment

Investor sentiment is cautiously optimistic. The market anticipates a 94% probability of a Fed rate cut in September, which has weakened the U.S. dollar. Concurrently, geopolitical factors and economic data from the Eurozone are supporting the euro. However, concerns about U.S. political developments and their potential impact on monetary policy add an element of uncertainty.