AUD/USD, NZD/USD, USD/JPY Analysis – Trade Tariffs, Copper Prices, and BOJ Policy

The Australian Dollar (AUD) continues to weaken against the US Dollar (USD), trading lower for the second straight day. Currently, risk-off sentiment dominates the market following President Trump’s decision to impose a 25% tariff on auto imports starting April 2. As a result, concerns about global trade disruptions have pressured AUD/USD, with the pair reacting to heightened uncertainty. Additionally, auto parts will face the same tariff no later than May 3, 2025, further adding to market anxiety. However, the overall outlook for AUD/USD remains uncertain, as the market has been trading with high volatility since early 2025. This heightened volatility is reflected in the formation of an ascending broadening wedge pattern.

Despite this uncertainty, the AUD finds some support from rising commodity prices. Trump also suggested possible copper tariffs within weeks, which initially boosted copper prices. As Australia is a major copper exporter, the news provided a short-term lift for the AUD. Expectations of Chinese stimulus further support the currency, given strong trade ties between Australia and China. Measures proposed by China to boost consumption may benefit Australian exports.

RBA Holds Steady as Inflation and Budget Send Mixed Signals

On the other hand, the Reserve Bank of Australia is expected to hold interest rates steady next week. The RBA cut rates by 25 basis points in February—the first cut in four years, as shown in the chart below. Assistant Governor Sarah Hunter emphasized a conservative stance due to global uncertainties. February’s policy statement signalled restraint, especially as inflation remains a concern and US monetary policy becomes more volatile.

Moreover, inflation data and budget figures show mixed signals. Australia’s Monthly CPI rose 2.4% in February, slightly below January’s 2.5%. Treasurer Jim Chalmers presented a 2025/26 budget with A$17.1 billion in tax cuts and a projected deficit of A$27.6 billion for 2024–25. Meanwhile, the US Dollar Index (DXY) trades around 104.50 as US yields fall and the Fed signals caution. Fed officials warn that ongoing tariffs may raise inflation and complicate policy decisions, adding further pressure to AUD/USD in the short term.

USD/JPY Faces Resistance as BOJ Signals Caution

USD/JPY trades around the resistance of $151 as markets react to comments from Bank of Japan Governor Kazuo Ueda. He reaffirmed that the BOJ may raise rates if the economic outlook supports it. However, he also noted that underlying inflation remains below the 2% target. This signals a cautious approach to tightening. The swaps market prices in only about 50 basis points of hikes over the next year. As a result, USD/JPY may struggle to break above key resistance at $152.

AUD/USD Technical Analysis – Price Uncertainty

The 4-hour chart for AUD/USD shows that the pair is hovering within a symmetrical broadening wedge, indicating uncertainty. Tariff concerns have kept the pair within this pattern, reflecting strong volatility and price instability. In the short term, the pair faces resistance around 0.6450, as shown in the chart below.

NZD/USD Technical Analysis – Bullish Price Structure

The 4-hour chart for NZD/USD shows that the pair has reached the resistance at $0.58 and is forming a bullish price structure. The red arrows in the chart highlight the consecutive bullish patterns, indicating that the pair is moving higher.

USD/JPY Technical Analysis – Inverted Head and Shoulders

The 4-hour chart for USD/JPY shows that the pair has broken out of the descending channel and formed a bullish price structure. This structure is confirmed by the formation of an inverted head and shoulders pattern. A break above $151 would likely trigger an upward move in USD/JPY.