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AUD/USD is forming higher lows after breaking a key trend support!

Can AUD regain its mojo against USD in the next trading sessions?

Before moving on, ICYMI, yesterday’s watchlist looked at USD/JPY’s break and retest opportunity ahead of FOMC members’ speeches. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Higher U.S. oil production helped send U.S. crude stocks 2.4M barrels higher in the week ended February 3, the highest since June 2021

Fed’s John Williams: 5.00% – 5.25% terminal rate projections still “reasonable”

Fed’s Waller: not seeing signals of “quick decline in the economic data,” prepared for a “longer fight”

Biden says he sees no recession in 2023 or 2024

RICS: Britain’s housing market suffered the most widespread price declines since 2009 in December

Disney to cut 7,000 jobs in major revamp by CEO Iger

Most Asian shares slid on Fed caution; China rebounds amid growth hopes

Germany’s inflation edged up from 8.6% to 8.7% y/y vs. 8.9% expected in January

Upcoming Potential Catalysts on the Forex Economic Calendar:

EU’s economic forecasts at 10:00 am GMT
US initial jobless claims at 1:30 pm GMT
US natural gas storage at 3:30 pm GMT
BUsinessNZ manufacturing index at 9:30 pm GMT
Japan’s PPI at 11:50 pm GMT
China’s CPI and PPI reports at 1:30 am GMT (Feb 10)

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: AUD/USD

AUD/USD 1-Hour Forex Chart

AUD/USD 1-Hour Forex Chart by TradingView

Risk-taking was the name of the game during the late Asian and early European trading session as investors weighed global inflation and growth prospects.

Markets are mostly shrugging off hawkish remarks from several Fed members in favor of pricing in (a) Biden’s belief that there won’t be a recession in 2023 and 2024, (b) Germany’s lower-than-expected annualized inflation, and (c) optimism over China’s reopening prospects.

The risk-friendly trading environment is helping AUD/USD’s recovery from its .6850 lows.

See, the pair recently broke below a trend line support but is now showing higher highs as more traders shrug off their high interest rate concerns.

Can AUD bulls maintain their momentum in the next trading sessions?

Uncle Sam won’t be releasing top-tier releases but China is printing its producer and consumer price numbers during the Asian session.

Growth-friendly producer and consumer activity for the world’s second-largest economy may push AUD/USD beyond its ascending triangle pattern in the 1-hour time frame.

AUD/USD could revisit its .7050 inflection point if not the .7100 previous high.

Don’t discount a downside breakout though! After all, the 100 and 200 SMAs are still signaling strong selling pressure. Ditto for Stochastic, which is flashing an “overbought” signal on the chart.

Watch out for another rejection at the triangle resistance that may drag AUD/USD to the .6920 or .6870 previous areas of interest.