AUD/USD Shows Signs of Recovery Amidst Softening US Dollar

AUD/USD Shows Signs of Recovery Amidst Softening US Dollar

The Australian Dollar is experiencing a mild recovery on Thursday, benefiting from a weakened US Dollar. The currency pair has managed to trim some losses, reclaiming levels above 0.6550. This article delves into the technical and fundamental aspects influencing the Australian Dollar's recent performance.

Technical Analysis:

From a technical standpoint, the price has undergone a retracement to a critical support zone around 0.6520/0.6525. Within this area, key levels include the 50% and 61.8% Fibonacci retracement levels, along with the dynamic trendline of a potential bullish channel. This convergence of technical factors suggests the possibility of a bullish push-up in the near term.

Fundamental Insights:

On the macroeconomic front, Australian economic indicators present a mixed picture. Consumer Inflation Expectations remained stable at 4.5% in January, indicating a level of inflationary expectations among consumers. However, concerns arise as the number of employed workers unexpectedly declined, pointing towards potential challenges in the labor market and a loss of momentum.

Conclusion:

The Australian Dollar's recovery is underpinned by a softer US Dollar, offering traders an opportunity to reassess their positions. The technical analysis highlights a significant support zone, suggesting a potential bullish move. However, the mixed macroeconomic data, particularly the unexpected decline in employed workers, introduces an element of caution.

Our preference

Long positions above 0.64 with targets at 0.68 & 0.69 in extension.

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