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AUDUSD Market Analysis

2/9/2023 10:46 AM

The AUD/USD pair shows moderate growth, recovering from a very active decline the day before. The instrument is again testing the level of 0.6950 for a breakout, waiting for the emergence of new drivers for growth. Such data may be Friday's publications from China on consumer inflation, which will confirm the recovery of the national economy. Current forecasts assume the growth of the Consumer Price Index in January by 0.7% after the zero dynamics of the previous month, and in annual terms, the figure may accelerate from 1.8% to 2.1%. Also, market participants pay attention to some weakening of the American currency against the backdrop of softer rhetoric of US Federal Reserve Chairman Jerome Powell at a meeting of the Economic Club of Washington, D.C., where he confirmed that the process of reducing inflation in the country has begun, but it will be long and difficult. The target level of 2.0% is expected to be reached no earlier than 2024. During his speech, the official also showed a restrained reaction to Friday's publications in the US on the labor market, noting that the interest rate may have to be increased more than originally estimated.

In the meantime, investors continue to forecast further monetary policy moves by the Reserve Bank of Australia (RBA) after interest rates were adjusted again this week by 25 basis points to 3.35%, the highest since April 2012. Against the backdrop of unprecedented inflation pressure, the regulator has already changed the value nine times since May last year, but its Governor announced readiness to continue the current course of monetary policy. According to a survey of leading economists conducted by Bloomberg, the indicator could reach a peak value of 3.85% in May, and some even suggest a value of 4.1% if the upward dynamics of consumer prices strengthens.

Weak macroeconomic statistics from Australia exerted pressure on the instrument yesterday. Thus, the Australian Industry Group (AiG) Industry PMI in December showed a decrease by 11.6 points, and the AiG Manufacturing PMI fell by 17.1 points.

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is expanding from below, remaining spacious enough for the current activity level in the market. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic, which has rebounded from the level of "20", is trying to reverse upwards, signaling in favor of the development of the uptrend in the near future.

Resistance levels: 0.6950, 0.7000, 0.7050, 0.7100. | Support levels: 0.6900, 0.6850, 0.6800, 0.6750.

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