AUD/USD, NZD/USD, and USD/JPY Analysis: Tariff and Fed Uncertainty Drive Diverging Trends

AUD/USD Rally as Fed Minutes and Tariffs Pressure the US Dollar

Australian Dollar is gaining ground against the US Dollar as trade tensions and political uncertainty in the US weigh on the Greenback. AUD/USD trades near 0.6540 and approaches key resistance at 0.6550. Market sentiment favours the Aussie amid rising expectations of a Fed rate cut.

The FOMC Minutes revealed policymakers remain cautious but are growing more open to easing policy. Many noted that tariffs could fuel inflation. This supports market expectations of a rate cut in September, which is bearish for the US Dollar.

President Trump’s criticism of Fed Chair Powell added to the uncertainty. His call for Powell’s resignation and demand for lower interest rates increases pressure on the Fed. Markets see this as political interference, which undermines confidence in the US central bank.

The AUD/USD pair benefits from this environment. The Aussie is sensitive to shifts in rate expectations and risk sentiment. With the US facing political and economic uncertainty, capital is flowing into relatively stable currencies, such as the AUD.

Tariff threats sent to multiple countries, including Libya and the Philippines, further weigh on the US Dollar. These new rounds of trade pressure highlight the unpredictability of US trade policy. The Australian economy, linked to global trade, could benefit if the US Dollar remains weak.

The combination of Fed uncertainty, Trump’s aggressive stance, and steady Aussie fundamentals supports further upside in AUD/USD. However, the pair must clear key resistance to confirm the next leg higher.

USD/JPY Faces Downside Risk as Tariffs and Yields Support the Yen

USD/JPY pair is trading near 146.50 after failing to break resistance at 147.15. The pair had gained earlier in the week, but trade headlines and falling US yields have capped further upside. The Yen has regained strength due to safe-haven demand.

President Trump’s announcement of 25% tariffs on Japanese products has increased market caution. The decision to delay the implementation to 1 August gives both sides time to negotiate. However, the uncertainty remains high.

Markets are hopeful about progress in talks. A US delegation, led by Secretary Scott Bessent, will visit Osaka this week. Meetings with Japanese officials could open the door for a potential trade agreement. This optimism supports the Yen and limits the upside of USD/JPY.

US Treasury yields are falling, narrowing the yield gap between Japan and the United States. The Yen, which is highly sensitive to interest rate differentials, benefits when US yields drop. This puts downward pressure on the USD/JPY.

Overall, the Yen is supported by safe-haven flows, falling US yields, and hopes for a trade resolution. If the Fed eases further or geopolitical risks rise, USD/JPY could decline further.

AUD/USD Technical Analysis – Ascending Broadening Wedge Pattern

The 4-hour chart for AUD/USD shows that the price is trading within an ascending broadening wedge pattern. Strong support lies at 0.64, and a rebound from this level has formed a strong bullish price action.

The sharp drop in the US Dollar Index, amid persistent bearish pressure, suggests an uptrend in AUD/USD toward the 0.6650 level. Moreover, the RSI indicator also shows a continuous upward trend above the midline.

NZD/USD Technical Analysis – Bullish Price Action

The 4-hour chart for NZD/USD shows that the pair has established strong bullish price action above the 0.5850 level. The increase in tariffs has triggered downward pressure on the US Dollar, fueling bullish momentum in NZD/USD.

The formation of multiple bottoms above 0.5850 indicates a solid bullish structure. The pair is now forming a strong base at 0.60, which could push the price toward the 0.61 level.

USD/JPY Technical Analysis – Neutral Zone

The 4-hour chart for USD/JPY shows that the pair is trading within a sideways range below the 148.30 level. Multiple attempts to rise from the long-term support at 142 toward 148.30 have failed to break above the 151 area, indicating continued bearish pressure. The negative trend in the US Dollar Index may lead to a decline in USD/JPY. A break below 142 would likely trigger a further decline in the pair.