AUD/USD Recovery Could Gain Momentum Above 0.6770

Key Highlights

  • AUD/USD started an upside correction after trading to a new 2020 low at 0.6663.
  • There was a break above a crucial bearish trend line with resistance near 0.6725 on the 4-hours chart.
  • The US CPI could increase 2.4% in Jan 2020 (YoY), up from the last 2.3%.
  • The US Initial Jobless Claims for the week ending Feb 08, 2020 could rise from 202K to 210K.

AUD/USD Technical Analysis

This past month, the Aussie Dollar declined heavily below the 0.6840 support against the US Dollar. AUD/USD traded below the 0.6800 support and even spiked below 0.6700.

AUD/USD Technical Analysis Aussie Dollar US Dollar

Looking at the 4-hours chart, the pair traded to a new 2020 low at 0.6663 and settled below both the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

Recently, the pair started a decent recovery wave above the 0.6700 resistance area. Furthermore, there was a break above the 50% Fib retracement level of the recent drop from the 0.6774 high to 0.6663 low.

More importantly, there was a break above a crucial bearish trend line with resistance near 0.6725. It opened the doors for more gains above the 0.6730 level.

The pair even climbed above the 61.8% Fib retracement level of the recent drop from the 0.6774 high to 0.6663 low. However, there is a major resistance waiting near the 0.6770-0.6780 area and the 100 SMA.

If AUD/USD gains pace above 0.6770-0.6780, it could accelerate its recovery above 0.6800. In the mentioned case, the pair could climb back towards 0.6840 and 0.6850.

Conversely, the pair might struggle to clear the 0.6770-0.6780 resistance area. In the mentioned case, there are chances of a fresh decline below 0.6700.

Looking at EUR/USD, the pair extended its decline below 1.0920. Conversely, GBP/USD climbed towards the 1.3000 resistance area.

Upcoming Economic Releases

  • German CPI for Jan 2020 (YoY) – Forecast +1.7%, versus +1.7% previous.
  • German CPI for Jan 2020 (MoM) – Forecast -0.6%, versus -0.6% previous.
  • US Initial Jobless Claims – Forecast 210K, versus 202K previous.
  • US CPI for Jan 2020 (MoM) – Forecast +0.2%, versus +0.2% previous.
  • US CPI for Jan 2020 (YoY) – Forecast +2.4%, versus +2.3% previous.
  • US CPI Ex Food & Energy for Jan 2020 (YoY) – Forecast +2.2%, versus +2.3% previous.


Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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