AUD/USD, NZD/USD, and USD/JPY Analysis: Key Breakouts and Fed-Driven Volatility

USD/JPY Consolidates as Fed Signals Rate Cuts

The US Dollar weakened against the Japanese Yen after the Federal Reserve held interest rates steady and signalled two rate cuts this year. The decision aligned with expectations but triggered a dovish market reaction. The 2-year Treasury yield dropped nearly 5 basis points to 3.9%.

The pair hits the 144.50 but recovers and trades above 145 as the US dollar rebounds from the 98 support region.

The Fed’s statement removed prior warnings about inflation and labour market risks. Policymakers now describe the labour market as “solid,” with a projected unemployment rate of 4.5% by year-end.

Markets focused on the dot plot, which still shows two expected cuts by the end of 2025. Seven FOMC members support this view, while four members expect one cut. The Fed’s cautious tone further supported risk-off sentiment.

AUD/USD Pressured by Weak Jobs Data and Global Uncertainty

The Australian Dollar remains under pressure, trading just below 0.6500 in Thursday’s Asian session. The pair showed little reaction to disappointing Australian jobs data for May. Broader risk aversion weighed on the Aussie.

Australia’s employment dropped by 2,500 in May, missing expectations for a 25,000 increase. This marks the first decline since February and follows a downwardly revised surge in April. Moreover, the number of part-time employees fell sharply by 41,200.

The weak labour data, combined with escalating geopolitical risks and a hawkish Fed pause, has limited upside for AUD/USD. Risk sentiment remains fragile, and the lack of local momentum may keep the pair subdued.

Moreover, Australia’s unemployment rate held steady at 4.1% in May 2025, matching market expectations. The jobless population decreased by 2,600 to 618,300. Full-time job seekers declined by 16,100 to 415,200, while part-time job seekers rose by 13,500 to 203,000.

The chart below shows that Australia’s unemployment rate has remained steady at 4.1% since January 2025. Therefore, this stability in the unemployment rate reflects a resilient labour market despite recent fluctuations in employment figures.

AUD/USD Technical Analysis – Ascending Broadening Wedge Pattern

The chart for AUD/USD shows that the pair is trading within an ascending broadening wedge pattern. Short-term price action indicates strong consolidation between the 0.6550 and 0.6460 levels. A break below 0.6450 could initiate a move to the downside. However, a break above the 0.6600 area is required to confirm further upside. Despite these consolidations, the RSI has reached the mid-level and continues to move lower. The drop from the mid-level suggests that AUD/USD may continue to decline.

NZD/USD Technical Analysis – Consolidation.

The 4-hour chart for NZD/USD shows that the pair is forming positive price action between the 0.55 and 0.56 area. Moreover, the formation of a rounding bottom near 0.5850 indicates a bullish outlook. As a result, any correction in the pair is considered a buying opportunity for further upside in NZD/USD. The recent pullback is driven by short-term strength in the US Dollar Index, which is pressuring the pair to the downside.

USD/JPY Technical Analysis – Descending Broadening Wedge

The 4-hour chart for USD/JPY shows that the pair is trading within a descending broadening wedge pattern and is approaching the resistance of this formation. A break above 148.30 is required to confirm further upside. Until this breakout occurs, the pair remains in tight consolidation. A break below 142.00 would indicate further downside within the current range.