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

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.