- AUD/USD has corrected marginally to near 0.6950, however, the upside looks favored.
- The upward-sloping trendline placed from 0.6629 is providing a cushion to the Australian Dollar.
- A 40.00-60.00 range oscillation by the RSI (14) indicates an absence of a potential trigger.
The AUD/USD pair is looking for demand after a minor correction to near 0.6950 in the Tokyo session. The Aussie asset is expected to display a sideways auction as investors are awaiting the release of the US Inflation for fresh impetus. The US Dollar Index (DXY) is not demonstrating any action as the inflation data might surprise investors.
A mix of indicators in their December report called for further inflation softening, however, January’s upbeat Nonfarm Payrolls (NFP) data has dampened the expectations of further deceleration in the living cost index. S&P500 futures have recovered some losses reported in the Asian session, indicating that the risk appetite is recovering again.
The Australian Dollar will display action after the speech from Reserve Bank of Australia (RBA) Governor Philip Lowe, which is scheduled for Wednesday.
AUD/USD has rebounded after sensing firmer buying interest around the upward-sloping trendline placed from December 20 low at 0.6629 on a four-hour scale. The movement in the Aussie asset has bounded in the 0.6886-0.6992 range, portraying a sheer contraction in volatility.
The 50-period Exponential Moving Average (EMA) at around 0.6960 is acting as a major barricade for the Australian Dollar.
Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00, which indicates that investors await a potential trigger for a decisive move.
A breakdown below January 10 low at 0.6860 will drag the asset toward December 28 high around 0.6800. A slippage below the latter will further drag the asset toward December 22 high at 0.6767.
In an alternate scenario, a decisive break above the psychological resistance of 0.7000 will drive the asset towards January 18 high at 0.7064 followed by January 26 high at 0.7143.
AUD/USD four-hour chart
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