Bearish Pullback in Sight Near Key Resistance

Summary:

This level aligns with previous swing highs and coincides with the psychologically significant 0.6500 mark, a zone that has historically acted as resistance.

SELL AUDUSD

Close Time

CLOSED

0.64985

Entry Price

0.64600

0.65200

0.71741 -0.00035 -0.05%

21.5

Pips

Loss

0.64600

0.65201

Exit Price

0.64985

Entry Price

0.65200

In a post on Truth Social on Wednesday, U.S. President Donald Trump publicly urged Federal Reserve Chair Jerome Powell to lower interest rates. This statement comes amid a series of mixed economic signals that have added complexity to the Fed’s policy outlook.

U.S. services sector activity showed signs of softening in May, with the Institute for Supply Management (ISM) Services PMI slipping to 49.9 from April’s 51.6. The reading fell short of market expectations of 52, indicating a modest contraction in the sector.

Digging deeper into the report, the Prices Paid Index—a key gauge of input inflation—rose to 68.7 from 65.1, suggesting persistent pricing pressures. Meanwhile, the Employment Index improved modestly to 50.7 from 49, offering some resilience on the labor front.

Chicago Fed President Austan Goolsbee maintained a cautious stance consistent with broader Fed commentary. While acknowledging the underlying strength of several economic indicators, he flagged the growing uncertainty tied to Trump’s assertive tariff rhetoric. Goolsbee noted that the Fed is beginning to factor in the potential fallout from broad trade restrictions.

Echoing that caution, Fed Governor Lisa D. Cook highlighted that despite the economy’s relative stability, trade risks continue to cast a shadow over long-term growth prospects.

Meanwhile, the ISM Manufacturing PMI for May added to concerns, dipping to 48.5 from April’s 48.7—marking the third straight month of contraction. Though some components saw minor improvements—New Orders rose slightly to 47.6 from 47.2, and Employment edged up to 46.8 from 46.5—the Import Index dropped significantly to 39.9, reflecting weaker global trade activity and ongoing tariff-related drag.

On the other side of the globe, Australian economic data released on Wednesday painted a picture of slowing momentum. According to the Australian Bureau of Statistics (ABS), the country's GDP rose just 0.2% quarter-on-quarter in Q1 2025, down from 0.6% in Q4 and falling short of the 0.4% forecast. Year-on-year growth stood at 1.3%, unchanged from the previous quarter but below the expected 1.5%.

Complementing the GDP figures, the S&P Global Australia Composite PMI edged down to 50.5 in May from 50.6 in April, signaling only marginal expansion. The Services PMI ticked up slightly to 50.6 from 50.5, reflecting a mild pickup in service-sector activity. Bearish Pullback in Sight Near Key Resistance_1

Bearish Pullback in Sight Near Key Resistance_1

Technical Analisys

The AUD/USD pair gained upward momentum and climbed to a local high of 0.6504 during the current session. This level aligns with previous swing highs and coincides with the psychologically significant 0.6500 mark, a zone that has historically acted as resistance. Given its technical significance, this area could prompt profit-taking and spark a short-term pullback toward the 0.6460 region, where the 100-period and 200-period moving averages converge—potentially serving as dynamic support.

The Relative Strength Index (RSI) surged to a peak of 72, entering overbought territory. While this condition may attract sellers looking for a reversal, it’s worth noting that there is no bearish divergence at present, as the higher RSI reading is consistent with a higher price level. This suggests that the prevailing bullish trend remains intact, and any downside move may prove to be merely a corrective retracement before the uptrend resumes.

Trading Recommendations

Trading direction: Sell

Entry price: 0.6498

Target price: 0.6460

Stop loss: 0.6520

Validity: Jun 13, 2025 15:00:00

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Bearish Pullback in Sight Near Key Resistance

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