- AUD / USD appears poised for a third consecutive day of gains, driven by a weaker US Dollar.
- The pair is currently testing a downtrend linking the January highs, a break above which would be a bullish sign.
The AUD/USD appears poised for a third straight day of gains as the currency pair takes full advantage of a further decline in the US dollar; AUD / USD has convincingly regained the 0.7700 level on Tuesday and now appears to be testing a downtrend linking the downtrend highs touched in January. For the time being, gains have stalled at around 0.7730 and the pair is currently trading higher at about 30 pips or 0.4% on the day, but a break above this downtrend could open the door for an acceleration of appreciation. recent and perhaps a test of the 2021 highs just north of the 0.7800 level.
Correlated assets
Eyes will be firmly on price action in asset classes that are positively correlated to the Australian dollar, such as equity markets, copper and iron ore markets, as well as crude oil and gold. Stocks and crude oil have taken a breather after a recent solid earnings streak, but metals have seen strong gains, with iron ore boosted as the PBoC action eases China’s liquidity concerns, the Copper driven by the weaker US dollar and hopes for stimulus and precious metals driven as real US yields decline If these trends continue, as well as stocks and crude oil markets start to rise again, the Australian dollar would be a prime candidate for the G10 FX for more profit.
Basics of the Australian National
NAB released its latest business survey, collected in January, during the Asia Pacific session on Tuesday; The bank’s business confidence index rose to 10 from 4 in December, but the business conditions index fell to 7 from 14 last month. NAB Group Chief Economist Alan Oster commented that “business started the year on a more optimistic tone, even as conditions relaxed from the strength we saw in December … Importantly, employment conditions remain unchanged. positive territory, so companies in general are still expanding their workforce. “
In a good sign for the Australian job market, the NAB survey’s measure of capacity utilization rose to 81.0% in January, which is around its pre-Covid-19 levels. Oster was optimistic about the prospect of higher gains in capacity utilization; “We expect capacity utilization to increase further in the coming months as demand recovers, which, in turn, should prompt companies to consider expanding capacity through contracting or investment,” he said.
The AUD seemed not to pay much attention to the survey, with its focus much more on global risk and the dynamics of the US dollar and movements in correlated asset classes.
4 hour chart
Technical Levels
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