AUD/USD Recovery Could Gain Momentum Above 0.677013 February, 2020 by Aayush Jindal in Market Analysis
- 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.
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.
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.