AUD/USD Recovery Stalls Ahead of January High

US Dollar Outlook: AUD/USD

AUD/USD holds below the 50-Day SMA (0.6291) as it gives back the recovery from the start of the week, and the exchange rate may track the negative slope in the moving average as it appears to be reversing ahead of the January high (0.6331).

AUD/USD Recovery Stalls Ahead of January High

AUD/USD struggles to extend the recent series of higher highs and lows as it pulls back from the weekly high (0.6297), and the exchange rate may consolidate over the remainder of the week as the change in US trade policy clouds the outlook for the global economy.

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US Economic Calendar

In turn, data prints coming out of the US may sway AUD/USD as the Non-Farm Payrolls (NFP) report is anticipated to show the economy adding 170K jobs in January, while the Unemployment Rate is expected to hold steady at 4.1% during the same period.

Signs of a strong labor market may spur a bullish reaction in the Greenback as it encourages the Federal Reserve to keep US interest rates on hold at its next meeting in March, but a weaker-than-expected NFP report may fuel the recent recovery in AUD/USD as it puts pressure on the Fed to further unwind its restrictive policy.

With that said, AUD/USD may no longer track the negative slope in the 50-Day SMA (0.6291) should it close above the moving average for the first time since October, but the exchange rate may give back the recovery from the start of the week as it appears to be reversing ahead of the January high (0.6331).

AUD/USD Price Chart – Daily

Chart Prepared by David Song, Senior Strategist; AUD/USD on TradingView

The recent recovery in AUD/USD appears to be stalling ahead of the January high (0.6331) as it struggles to extend the series of higher highs and lows from the start of the week, and lack of momentum to hold above the 0.6240 (61.8% Fibonacci extension) to 0.6270 (2023 low) zone may push the exchange rate back towards the 0.6130 (23.6% Fibonacci retracement) to 0.6170 (2022 low) region.
A breach below the monthly low (0.6088) opens up the 0.5980 (April 2020 low) to 0.6020 (38.2% Fibonacci extension) zone, but AUD/USD may stage further attempts to test the January high (0.6331) as it continues to gut-check the negative slope in the 50-Day SMA (0.6291).
A move/close above 0.6318 (November 2023 low) may push AUD/USD to fresh yearly highs, with a breach above 0.6410 (50% Fibonacci extension) bringing the December high (0.6515) on the radar.

Additional Market Outlooks

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USD/JPY Pushes Below January Range Ahead of US NFP Report

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--- Written by David Song, Senior Strategist

Follow on X at @DavidJSong

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