The AUDUSD has decreased by nearly 0.9%, marking its largest decline of 2025 and the most substantial drop since December 2024. This decline follows President Trump’s announcement of 25% tariffs on Mexico and Canada, with an additional 10% tariff on Chinese goods.

Amid Australia’s close economic ties to China, negative developments impact the AUD and NZD, contributing to notable decreases today. The AUDUSD has approached the 50% retracement of the February range at 0.62474, with the day’s low at 0.62495.

Price action near 0.62474 indicates a balance between buying and selling, with a potential break below this level leading to further declines. Target levels for downside pressure include 0.62348 and 0.62097.

Conversely, should buyers defend 0.62474, initial upside targets are set at 0.62743 and 0.6285. The AUDUSD remains under pressure, with further declines possible if risk-off sentiment continues.

This sharp drop in the AUDUSD reflects how external trade policies directly affect investor sentiment and market positioning. With Donald’s tariff announcement targeting three of the United States’ largest trading partners, risk-sensitive currencies, including Australia’s, have felt the weight of the shift almost immediately. Given the country’s deep economic reliance on Chinese demand, fresh trade barriers have only amplified pressure on an already struggling currency.

The technical positioning of the pair is now highly relevant for the coming sessions. The dip towards 0.62474 signals that traders are weighing whether this level serves as a holding point or merely a temporary pause. Price action around this area suggests buyers and sellers are testing each other’s conviction. A decisive drop below would likely trigger further losses with the next downside focus landing at 0.62348. Beyond that, 0.62097 may follow should bearish pressure remain unchallenged.

However, stability at 0.62474 would offer a reprieve for those looking for an upward move. If buying interest strengthens, we would then turn towards 0.62743 as an area of interest, followed by 0.6285. Any recovery will likely depend on a shift in market sentiment or a pullback in the broader risk-off movement that is currently gripping markets.

Risk appetite remains fragile, and with fresh trade tensions dictating flows, the coming weeks could see increased volatility. Traders will need to remain focused on key technical levels while also monitoring potential responses from policymakers. A continuation of negative trade rhetoric or intensifying headwinds from China would lean heavily against any sustained recovery attempts.