AUD/USD holds onto the previous day’s recovery moves from a one-week low while taking the bids to renew intraday high around 0.7160, up 0.13% on a day, amid Wednesday’s Asian session.

In doing so, the Aussie pair cheers the hopes of no further escalation in the Russia-Ukraine tussles after Moscow rolled back some of its troops from borders, while also ignoring China inflation data.

Given the downbeat China inflation figures, hopes that the People’s Bank of China (PBOC) will keep fueling markets seem to have underpinned the Asia-Pacific equities of late, in addition to Russia-linked headlines. However, the US 10-year Treasury yields and stock futures remain on the back foot by the press time.

Other than the mixed updates from Russia and downbeat China data, cautious mood ahead of January Retail Sales from the US and Federal Open Market Committee (FOMC) Minutes also should test AUD/USD bulls.

AUD/USD keeps the bounce off the 38.2% Fibonacci retracement (Fibo.) of January 13-28 downturn, around 0.7100, amid firmer MACD signals and a steady RSI line.

However, the Aussie pair remains below the previous support line from January 28, around 0.7185, which in turn suggests that buyers remain cautious below the stated hurdle. Also acting as an immediate upside hurdle is the convergence of the 50-DMA and a descending trend line from January 20, close to 0.7170.

Nevertheless, AUD/USD is breaking to the upside with the price holding above H4 21-EMA. This is seen as an encouraging development for the bulls ahead of the data. Eyes will be on 0.7180s and then 0.73 the figure as a critical milestone in the pursuit of a higher daily high.

AUDUSD Will Face A Bearish Pullback From 0.7180

Feb 16 2022