AUD/USD, NZD/USD, and USD/JPY Analysis: Supported by Trade Surplus and Inflation Data

Inflation and Trade Data Boost the Australian Dollar

The chart below shows that the trade surplus in March was AUD 6.9 billion, significantly higher than the expected AUD 3.13 billion. Moreover, the exports increased by 7.6%, while imports declined by 2.2%. This sharp improvement strengthened AUD/USD and signalled solid external demand. This data indicates a sign of resilience in Australia’s economy.

The chart below shows that the quarterly CPI rose 0.9% in Q1 2025, higher than the previous 0.2% and above the forecast of 0.8%. Similarly, the annual CPI also reached 2.4%, beating the 2.2% expectation. On the other hand, the trimmed Mean CPI stood at 2.9% year-over-year, confirming underlying inflation. These figures reduced the urgency for aggressive RBA rate cuts and helped AUD/USD hold gains.

However, markets still expect a 25-basis-point rate cut in May due to US tariff threats and broader trade risks. Treasurer Jim Chalmers confirmed that the inflation data did not significantly alter expectations. However, the strong CPI and trade surplus limited downside risk for the Australian Dollar. This balance kept AUD/USD supported even as the US Dollar improved.

US Dollar Index Recovery Lifts USD/JPY

The US dollar index trades near the 100 resistance level and is up for the third consecutive day. The dollar gained as traders reduced expectations for a full 1% rate cut by the Fed this year. Despite GDP contracting by 0.3% in Q1, core PCE rose 2.6% year-over-year in March, as shown in the chart below. This inflation reading reinforced the Fed’s cautious tone, which helped strengthen the US dollar.

Moreover, President Trump’s optimism over trade deals with China, Japan, and South Korea lifted sentiment. At the same time, Japan faces economic pressure from weakening Chinese data. China’s Manufacturing PMI fell to 49.0, returning to contraction territory. This raises concerns for Japan’s export outlook, potentially weighing on the Yen.

AUD/USD holds firm due to domestic strength, despite external uncertainties. USD/JPY may edge higher on improving US sentiment and Japan’s vulnerability to China’s slowdown. Market attention now turns to upcoming US NFP data for further confirmation of USD momentum.

AUD/USD Technical Analysis – Bullish Price Development

The 4-hour chart for AUD/USD shows that the price action remains strongly bullish as it consolidates near the resistance at $0.6450. A break above this level will sustain the strong bullish momentum in AUD/USD. The emergence of a symmetrical broadening wedge pattern, combined with Trump-related volatility, indicates that AUD/USD may break higher.

NZD/USD Technical Analysis – Ascending Broadening Wedge

The 4-hour chart for NZD/USD shows that the pair has broken out of the symmetrical broadening wedge pattern and is now correcting back to the support of the wedge. The pair hit support at $0.5890 and signalled a rebound. The recovery from the long-term support at $0.56, followed by the bullish formation, indicates that the pair may continue to move higher.

USD/JPY Technical Analysis – Descending Broadening Wedge

The 4-hour chart for USD/JPY shows that the pair failed to break below 140 and is building positive momentum at the support of a descending broadening wedge pattern. The pair is forming an inverted head and shoulders pattern at this support level, which suggests that a break above 144 could propel the pair higher. The strong resistance for USD/JPY remains at 149.