The AUD/USD pair traded in a narrow range, staying below the immediate resistance of 0.6300 during Thursday’s North American session. The market remains cautious as President Donald Trump has yet to unveil a comprehensive tariff plan, leaving investors to speculate on his intentions. While Trump has hinted at imposing 25% tariffs on Canada and Mexico and 10% on China starting February 1, the lack of a detailed policy keeps risk-sensitive assets like the Australian Dollar (AUD) subdued.

The cautious sentiment has bolstered safe-haven demand for the US Dollar. The US Dollar Index (DXY) rebounds from a two-week low near 107.75, though gains remain modest. Investors are also bracing for the Federal Reserve’s monetary policy announcement next Wednesday, where rates are expected to remain unchanged at 4.25%-4.50%. Markets will closely watch the Fed’s guidance for insights into future policy moves.

On the Australian side, traders are awaiting the Q4 Consumer Price Index (CPI) data, scheduled for release on Wednesday. This data will influence market expectations regarding the Reserve Bank of Australia’s (RBA) policy decisions. A 25-basis point rate cut is fully priced in for February, bringing the benchmark rate down to 4.10%.

For now, AUD/USD remains range-bound, with both tariff uncertainty and central bank expectations keeping volatility contained.

Trade Idea:
Consider selling AUD/USD on a break below 0.6250, targeting 0.6200, with a stop-loss at 0.6285. Watch for US CPI data and RBA developments for further direction.