Australian Dollar slips as weak consumer confidence offsets strong China trade data

• Australia’s Westpac Consumer Sentiment Index fell to -2.9% in June from 3.5% previously.
• China’s May trade data exceeded expectations, with Exports rising 19.4% YoY and Imports increasing 27.4% YoY.
• Despite the upbeat Chinese figures, concerns over weaker non-tech exports and fragile domestic consumption in China limited support for the AUD.

The AUD/USD pair falls to near 0.7040 on Tuesday, as the Australian Dollar (AUD) failed to gain support from stronger-than-expected Chinese trade data released earlier in the Asian session.

The pair trimmed gains following the release of Australia's Westpac-Melbourne Institute Consumer Sentiment Index, which fell to -2.9% in June from the previous 3.5.

China’s May Exports surged 19.4% YoY, beating expectations, while Imports jumped 27.4%, signaling stronger external and domestic demand. The figures initially supported sentiment around China-linked currencies such as the Aussie, as China remains Australia’s largest trading partner.

The improvement was led by strong demand for high-tech goods, semiconductors, and AI-related products, helping China’s trade surplus rise to $105.43 billion in May.

However, concerns remain over weaker momentum in non-tech exports and China’s still-fragile domestic consumption outlook.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7042, maintaining a bearish near-term bias as it remains below both the 20- and 100-period Simple Moving Averages (SMAs) at 0.7080 and 0.7136, respectively. The Relative Strength Index (RSI) hovers in the mid-30s, hinting at lingering downside pressure, although it is attempting to stabilize after recent oversold-like readings.

On the topside, immediate resistance emerges at 0.7047, with a stronger cap at 0.7063, ahead of the clustered 20-period SMA near 0.7080 and the higher 100-period SMA around 0.7136. On the downside, initial support sits just below at 0.7041, with a more significant floor at 0.7033; a clear break beneath this band would open the way for further losses in line with the prevailing bearish structure.

(The technical analysis of this story was written with the help of an AI tool.)