Bullish Momentum Poised To Resume From Key Moving Average Support

Summary:

If this support level continues to show resilience and the bullish histogram gains depth, we expect the primary trend to recapture its momentum.

Buy AUDUSD

End Time

CLOSED

0.69581

ENTRY

0.70500

TGT

0.68800

-- -- --

919

Points

Profit

0.68800

0.70501

CLOSING

0.69581

ENTRY

0.70500

TGT

Market participants have almost entirely priced in a 25-basis point hike from the Reserve Bank of Australia (RBA), which would bring the official cash rate to 3.85%. This hawkish shift is underpinned by a resilient domestic growth profile and clear indications that inflationary pressures are regaining traction. Nevertheless, the central bank is expected to maintain a degree of prudence, likely avoiding explicit forward guidance regarding its next policy moves.

The official decision is scheduled for Tuesday at 03:30 GMT, accompanied by the Monetary Policy Statement (MPS) and updated quarterly economic projections. Following this, RBA Governor Michele Bullock will host a press conference at 04:30 GMT. A perennially tight labor market, with unemployment hovering near 4%, remains a primary pillar for the central bank's restrictive stance. Data from the Australian Bureau of Statistics (ABS) further supports this, showing the monthly Consumer Price Index (CPI) rebounding to 3.8% year-over-year in December, surpassing the 3.6% market consensus. Additionally, the trimmed-mean CPI—the RBA’s preferred core inflation gauge—rose 0.9% in Q4, exceeding the anticipated 0.8%.

On the macroeconomic front, broader indicators suggest persistent price pressures, with the TD-MI Inflation Lead Indicator rising to 3.6% in January. Attention has also turned toward China, Australia's largest trading partner, where the RatingDog Manufacturing PMI landed at 50.3, signaling a slight improvement in regional industrial activity.

Across the Pacific, the U.S. Bureau of Labor Statistics (BLS) recently reported that producer inflation climbed to 3%, while core inflation accelerated to 3.3%. These figures reinforce the "higher for longer" narrative, suggesting interest rates may remain stable unless the Producer Price Index (PPI) shows a significant deceleration. Furthermore, the ISM Manufacturing PMI surprised to the upside at 52.6, a sharp rebound from December's contraction. While the Prices Paid sub-index rose for the sixteenth consecutive month, the Employment component remains in contractionary territory.

Regarding U.S. monetary policy, the nomination of former Fed Governor Kevin Warsh as a potential future Chair has moderated concerns regarding central bank independence. Investors largely view Warsh as a seasoned institutional figure. Within the current Committee, however, a divide persists: Governor Christopher Waller recently advocated for a 25-basis point cut, arguing policy is overly restrictive, while Atlanta Fed President Raphael Bostic urged caution, demanding clearer evidence of inflation moving sustainably toward the 2% target. Bullish Momentum Poised To Resume From Key Moving Average Support_1

Bullish Momentum Poised To Resume From Key Moving Average Support_1

Technical Analysis

The AUD/USD remains entrenched in a definitive primary uptrend. Following a significant "gap up" on January 25th, the pair extended its rally to a local peak of 0.7095. Since then, the price has undergone a healthy technical correction, gravitating toward the 0.6904 support zone, which has remained resilient since the initial gap formation.

This support area is strategically significant as it converges with the 100-period Moving Average on the 2-hour chart, currently situated at 0.6936. Meanwhile, the 200-period MA remains lower at 0.6820. The 100-period MA is expected to act as a dynamic floor and a tactical "launchpad," potentially propelling the price back toward the 0.7050 handle.

Our momentum analysis via the MACD provides further confirmation of this potential rebound. The indicator is currently staging a bullish crossover as it exits the bearish histogram bars. Notably, while the signal lines retraced rapidly, the actual price correction was relatively shallow, suggesting that the bears are losing velocity.

If this support level continues to show resilience and the bullish histogram gains depth, we expect the primary trend to recapture its momentum. As long as the pair holds above the moving average cluster, the technical bias favors a continuation toward recent highs.

Trading Recommendations

Trading direction: Buy

Entry price: 0.6960

Target price: 0.7050

Stop loss: 0.6880

Validity: Feb 13, 2026 15:00:00

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