Australia's economy continues to face pressure from U.S. tariffs.

The Australian dollar has been strengthening steadily after the U.S. President Donald Trump exempted imported technology products from new tariff measures. This move has heightened global investors' concerns about risks to the U.S. economic system. The measures mainly affect products manufactured in China, such as smartphones, computers, and semiconductors. However, China's Ministry of Commerce stated that this exemption is only the beginning, urging the U.S. to fully remove the 145% import tariffs on Chinese goods. China remains Australia's largest trading partner and major commodity buyer, making the Australian dollar highly sensitive to the ongoing U.S.-China tariff negotiations.

Jim Chalmers, Australia's Treasurer, said recently that Australia can cope with the direct impact of U.S. import tariffs. However, the country's economy continues to be affected by the global economic slowdown. It is forecasted that Australia's GDP will decline by 0.1% in 2025, and inflation will rise by another 0.2% from the current rate of 2.4%. While Australia can manage the immediate impacts, concerns remain about significant slowdowns expected in both the U.S. and Chinese economies — Australia's key trading partners — due to the trade war triggered by President Trump's major tariff hikes. Such global trade disruptions are certain to affect domestic inflation and economic momentum.

Australia's Consumer Confidence Index dropped 6.0% month-on-month to 90.1 in April, marking a six-month low. Household financial conditions fell more than 8.5% year-on-year, while expectations for the next 12 months dropped another 6.2%, reflecting consumers' persistently negative outlook on the domestic economy. Meanwhile, unemployment is forecasted to rise to 5.1%. Matthew Hassan, head of Australian Macro-Forecasting, commented that the U.S. tariff hikes will significantly weaken consumer confidence in the coming months.

Australia's trade surplus narrowed to AUD 2.97 billion from AUD 5.16 billion the previous month, due to a drop in exports and an increase in imports. Imports rose 1.6% to a record high of AUD 39.34 billion, driven by continued growth in consumer goods purchases. Food and beverage imports rose 0.8%. Additionally, imports of capital goods and intermediate goods — used as production inputs — surged over 31%, highlighting the country's strong manufacturing expansion capabilities.

On the export side, shipments fell 3.6% from the previous month to a four-month low of AUD 42.31 billion, mainly due to a sharp 21.4% decline in gold exports to AUD 4.21 billion. Exports of other mineral ores also dropped 2.9%. However, exports of machinery rose 4.6%, and exports of grains and condiments increased 2.7%. Most of Australia's exports continued to go to China, its largest trading partner, followed by Japan and India.

Techical analysis data (5H)

Resistance: 1.5876, 1.5905, 1.5959

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.5739 - 1.5792 but cannot break the support at 1.5792, you may set a TP at approximately 1.5905 and SL at around 1.5709 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.5876 - 1.5905, you may set a TP at approximately 1.5959 and SL at around 1.5739 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.5876 - 1.5905 but cannot break the resistance at 1.5876, you may set a TP at approximately 1.5739 and SL at around 1.5959 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.5739 - 1.5792, you may set a TP at approximately 1.5709 and SL at around 1.5905 or according to your acceptable risk.

Pivot point April 14, 2025 09:59 PM. GMT+7