The Australian Dollar (AUD) increased by 4% after the announcement of a 90-day pause on tariffs by Trump. The pair was last noted at 0.6170, according to FX analysts.
Regional equities also rose sharply, with Taiwan increasing over 9% and KOSPI, STI, and Nikkei rising by more than 5%. The AUD slightly strengthened following news of a China meeting on stimulus measures after the tariff news.
Bearish Momentum Diminished
Bearish momentum on the daily chart has diminished, with the RSI recovering from near oversold levels. Key resistance levels are noted at 0.6160, 0.6250/80, and 0.6310, while support is identified at 0.60 and 0.5915.
The earlier move in the Australian Dollar (AUD), gaining 4% following the announcement of a temporary freeze on trade tariffs, reflects a release in pressure that had been steadily building over prior weeks. Market participants have treated this as an opportunity to unwind short positioning, and we observed a reactive rather than sustained trend shift—at least for now. The FX value stabilised near 0.6170, although the tone remains especially alert to further guidance from both Beijing and Washington.
Equities across the Asia-Pacific region responded most strongly, with Taiwan leading—posting a gain upwards of 9%. South Korea’s KOSPI, Singapore’s STI, and Japan’s Nikkei each advanced beyond the 5% mark. The correlation here appears driven less by company-level expectations and more as a macro-driven relief across heavily export-oriented economies. With this environment, risk-sensitive currency pairs, like AUD/USD, benefited in tandem.
Charts have also begun to reflect a stalling in downside pressure. The bearish bias visible throughout October has waned. On the daily timeframe, we’ve observed Relative Strength Index values climbing back from near oversold readings, with a mid-range positioning now suggesting some breathing room—but not excess. That recovery in RSI isn’t deep enough to imply an overextension to the upside just yet.
Resistance is becoming more defined with the first near-term barrier around 0.6160, a level now acting less like a ceiling and more like a congestion zone. Further gains look increasingly tied to breaking through 0.6250/80 and then 0.6310. Each of these zones will likely need confirmation via either stronger Western buying interest or more pronounced shifts in commodity metrics, particularly iron ore and copper prices.
On the downside, the 0.60 level has proven reliable thus far—serving as a psychological as well as a chart-technical floor—while 0.5915 offers the next zone of deeper support. That lower area aligns with several weekly lows from earlier in the year and will become focal if another risk-off push emerges.
Market Sensitivity to News
Over the coming sessions, we expect price action to hinge more on directional conviction from broader macro developments rather than technicals alone. That’s especially true given the backdrop of still-soft Chinese demand data offset by intergovernmental fiscal signal noises. Traders with exposure here may want to pay more attention to intraday momentum fades or accelerations around those three upper resistance levels. It’s rarely the first test that holds or breaks—more often it’s the follow-up, when volume confirms intent.
It’s also worth noting that speculative net-short positioning in AUD futures had reached historical extremes as of last week, creating fertile conditions for a snapback. While we’ve likely already seen some of that squeeze, the data points toward more room if sentiment continues to unwind. That said, any hint that the 90-day hold is more symbolic than structural could bring sellers right back in.
Equity risks remain asymmetrical. Taiwan’s bounce, while impressive, relies on stateside tech flows which may not be sustained if US yields adjust upward sharply again. Similarly, the gains in Nikkei and KOSPI reflect reaction rather than recalibration. If earnings disappoint or US fiscal uncertainty returns to front pages, we need to be ready for that collective rally to falter.
For now, we expect an unusually high level of news-sensitivity—especially around Washington or Beijing dispatches. Moves may be compressed into single-session swings, narrowing opportunity windows. That skews preference toward short-duration strategies over trend-following until clearer signals appear.
