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AUDUSD Develops an Uptrend

1/24/2023 11:03 AM

The AUD/USD pair shows mixed trading dynamics during the Asian session, holding near 0.7030 and local highs from January 18. The day before, the instrument showed active growth, which allowed the Australian currency to almost completely win back the losses of the end of last week, while important macroeconomic statistics appeared closer to the opening of today's session.

The Services PMI from Commonwealth Bank in January corrected from 47.3 points to 48.3 points, which turned out to be worse than market expectations of growth to 49.7 points, and the Manufacturing PMI fell from 50.2 points to 49.8 points, also falling short of the predicted 50.3 points. At the same time, the Composite index of business activity strengthened from 47.5 points to 48.2 points. In addition, the National Australia Bank's Business Conditions in December fell from 20.0 points to 12.0 points with the forecast for a fall to 19.0 points, and the National Australia Bank's Business Confidence corrected from -4.0 points to -1.0 points with a forecast of growth up to 3.0 points.

Australian Prime Minister Anthony Albanese believes that the peak of inflation, which has risen from 0.85% to 7.30% since 2020, has been passed. Households, however, remain under pressure from the "hawkish" policy of the country's chief financial regulator in raising mortgage interest rates, as well as energy bill spikes and a cost-of-living crisis.

Tomorrow in Australia, data on the Consumer Price Index for the fourth quarter of 2022 will be released, forecasts for which suggest an increase from 7.3% to 7.5% in annual terms.

Bollinger Bands on the daily chart show a steady increase. The price range is narrowing from below, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD indicator is growing having formed a strong buy signal (located above the signal line). Stochastic, which reversed upwards last week, is again rapidly approaching its highs, indicating the risks of the Australian dollar being overbought in the ultra-short term.

Resistance levels: 0.7050, 0.7100, 0.7150, 0.7202. | Support levels: 0.7000, 0.6950, 0.6900, 0.6850.

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