This week brings several key economic updates that could influence market sentiment. U.S. CPI and Crude Oil Inventories are set for Wednesday, followed by UK GDP, Swiss CPI, and U.S. PPI and Unemployment Claims on Thursday. The week wraps up with U.S. Retail Sales on Friday. The Australian Dollar (AUD) has rebounded against the U.S. Dollar (USD) after a recent dip, supported by bullish technical signals. However, new U.S. tariffs and ongoing trade developments may add uncertainty, with markets keeping an eye on potential impacts for both the AUD and USD.
Overview
This week brings several key economic updates that could influence market sentiment. U.S. CPI and Crude Oil Inventories are set for Wednesday, followed by UK GDP, Swiss CPI, and U.S. PPI and Unemployment Claims on Thursday. The week wraps up with U.S. Retail Sales on Friday. The Australian Dollar (AUD) has rebounded against the U.S. Dollar (USD) after a recent dip, supported by bullish technical signals. However, new U.S. tariffs and ongoing trade developments may add uncertainty, with markets keeping an eye on potential impacts for both the AUD and USD.
Key Economic Events
Wednesday 15:30 (GMT+2) - USA: CPI m/m (USD)
Wednesday 17:30 (GMT+2) - USA: Crude Oil Inventories (USD)
Thursday 09:00 am (GMT+2) - UK: GDP m/m (GBP)
Thursday 09:30 am (GMT+2) - Switzerland: CPI m/m (CHF)
Thursday 15:30 (GMT+2) - USA: PPI m/m (USD)
Thursday 15:30 (GMT+2) - USA: Unemployment Claims (USD)
Friday 15:30 (GMT+2) - USA: Retail Sales m/m (USD)
Technical Analysis
Following the announcement of President Trump's tariffs, the Australian Dollar (AUD) against the US Dollar (USD) initially fell to a low of 0.60866. However, it subsequently rebounded, driven by a blend of technical and fundamental factors. Prices have risen above the 50-period Exponential Moving Average, signaling a shift in market sentiment and alleviation of tariff-related concerns. Additionally, the upward trend is corroborated by bullish indicators from both the Momentum oscillator and the Relative Strength Index (RSI). The Momentum oscillator has surpassed the 100 baseline, and the RSI is positioned above 50, suggesting a continued potential for further gains in the near term.
Potential Upside Targets
Should the bulls maintain market control, traders may direct their attention toward the four potential resistance levels below:
0.63298: The initial resistance is 0.63298, which represents the daily high from January 24.
0.64016: The second price target is identified at 0.64016, corresponding to the 261.8% Fibonacci Extension drawn from the high point, 0.62997, to the low point, 0.62367.
0.64314: The third target is established at 0.64314, aligning with the weekly resistance, R1, estimated using the standard Pivot Points methodology.
0.65036: An additional price target is estimated at 0.65036, which corresponds to the 423.6% Fibonacci Extension drawn from the high point, 0.62997, to the low point, 0.62367.
Potential Downside Targets
Should the sellers take market control, traders may consider the four potential support levels listed below:
0.62183: The first level of support is identified at 0.62183, representing the weekly Pivot Point, PP, calculated using the standard methodology.
0.61368: The second support level is 0.61368, reflecting the weekly support, S1, calculated using the standard Pivot Points methodology.
0.60866: The third support level is identified at 0.60866, corresponding to the daily low marked February 3.
0.60052: An additional downward target is observed at 0.60052, corresponding to the 423.6% Fibonacci Extension drawn from 0.62367 to 0.63085.
Fundamentals
Analysts believe that RBA Governor Michele Bullock might have to consider President Donald Trump's new 25% tariff on steel and aluminum imports when making decisions on interest rates. While some experts expect an interest rate cut by the Reserve Bank of Australia (RBA) next week, concerns about the impact of these tariffs could delay mortgage relief. Australian Prime Minister Anthony Albanese has discussed potential exemptions with Trump, but if Australia is not exempted, the Aussie dollar could weaken against the US dollar, affecting the RBA's decisions. The RBA takes international factors into account, and a lower Australian dollar could impact inflation rates and the cost of imported goods.
On the other hand, the U.S. dollar fell on Tuesday as Federal Reserve Chair Jerome Powell indicated that the central bank was in no hurry to cut interest rates again. Powell's comments, which affirmed the strength of the U.S. economy with low unemployment and inflation above the Fed's 2% target, were largely anticipated by traders. Meanwhile, traders awaited further details on potential trade tariffs by President Donald Trump. The dollar index dropped 0.37% to 107.96. Powell emphasized that the Fed's role is to react to economic impacts of tariffs, not comment on trade policies. Trump's recent tariff announcements have caused market volatility, with traders adopting a wait-and-see approach. The euro rose 0.49% to $1.0357, and the Australian dollar gained 0.29% to $0.6293 amid talks of possible exemptions from U.S. tariffs.
Conclusion
In conclusion, this week's economic data releases and ongoing trade developments are set to shape market sentiment, with a particular focus on U.S. inflation figures and Australia's response to new tariffs. While the Australian Dollar shows signs of recovery, external pressures from trade policies and central bank decisions could introduce further volatility. Traders will remain cautious, watching both technical signals and fundamental shifts for direction.