[MARKET ANALYSIS] Aussie outperforms on base metals and Chinese trade data, DXY takes a breather after yesterday’s slide

• DXY initially traded flat, before slipping a touch as the morning progressed. This follows the volatility in the prior session, which kicked off with haven/inflationary flows but ended with outflows after US President Trump signalled a nearing end to the Iranian war. That being said, rhetoric from Iran has continued to be confrontational. To recap yesterday’s price action, DXY opened at 98.855 and hit a peak of 99.695 before hitting a 98.698 low later in the session. Today’s current range is a lot more contained, within 98.492-98.939 at the time of writing. The day ahead of the US sees weekly ADP and Existing Home sales, although price action will likely be dictated by sentiment surrounding geopolitics.
• EUR/USD is flat with a mild upward bias, but consolidating after yesterday’s Trump-led slide in the USD, with the pair notching a 1.1507-1.1637 range on Monday, vs the current 1.1606-1.1636 range thus far on Tuesday. No move was seen to the German Trade Balance data. As above, price action will likely be dictated by geopolitical and/or energy updates.
• GBP/USD is among the better performers with Cable rising above its 200 DMA (1.3443) to a current high of 1.3483 (vs low 1.3413). This follows yesterday’s surge above its 100 DMA (1.3398) amid the aforementioned USD price action, with Tuesday’s range between 1.3282 and 1.3446.
• USD/JPY lacked direction overnight, and continues to trade sideways this morning after slipping beneath the 158.00 level yesterday, with little reaction to a batch of data releases from Japan, including Q4 GDP revisions that either matched or exceeded the preliminary numbers, while Household Spending surprisingly contracted. USD/JPY currently resides within 157.27-157.96 vs Monday’s 157.63-158.90 range.
• Antipodeans are mixed with AUD/USD outperforming amid firmer copper prices and better-than-expected Chinese trade data overnight, which showed double-digit percentage jumps in exports and imports for Australia and New Zealand's largest trading partner. AUD/NZD, meanwhile, has risen back above 1.1950 and edges closer to 1.2000.
• NOK weakened in the aftermath of softer-than-expected CPI data, with the pair, in a delayed reaction, lifting from 11.1350 to 11.1650 in the five minutes following the release, before hitting an 11.1825 peak around 20 minutes later. The pair made a session high at 11.2334, before pulling back towards the 11.1900 mark.

The Aussie dollar is strengthening on the back of rising copper prices and robust Chinese trade data, signaling a positive sentiment toward Australia's export outlook. Meanwhile, the DXY is stabilizing after recent fluctuations influenced by geopolitical tensions and U.S. economic expectations, suggesting that FX traders might be positioning for further shifts driven by upcoming data releases and sentiment surrounding U.S. policy developments.