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.

Join David Song for the Weekly Fundamental Market Outlook webinar.

David provides a market overview and takes questions in real-time. Register Here

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

US Dollar Forecast: EUR/USD Snaps Back Ahead of January Low

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

Gold Record High Price Pushes RSI Into Overbought Zone

USD/CAD Clears 2020 High as Trump Tariff Looms

--- Written by David Song, Senior Strategist

Follow on X at @DavidJSong

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.