Bullish Momentum Poised for Resumption Following Shallow Technical Pullback

Forex

Economic

Summary:

This technical setup validates the thesis of a potential reversal from this support cluster, as the path of least resistance remains to the upside.

BUY AUDUSD

Close Time

CLOSED

0.70604

Entry Price

0.72750

0.69000

0.70767 +0.00206 +0.29%

14.5

Pips

Profit

0.69000

0.70749

Exit Price

0.70604

Entry Price

0.72750

The United States labor market continues to exhibit profound structural integrity, defying broader cooling expectations. Initial jobless claims retreated to 206,000 for the week concluding February 14—a figure that notably undercut the market consensus of 225,000. According to the Department of Labor (DOL), the four-week moving average also trended lower to 219,000, reinforcing a narrative of stabilization despite a marginal uptick in continuing claims, which currently stand at 1.869 million.

This data introduces further complexity into the Federal Reserve’s policy deliberations. Internal rhetoric remains starkly polarized: San Francisco Fed President Mary Daly maintains a resolute hawkish posture, arguing that inflationary pressures remain uncomfortably elevated. In contrast, Governor Michael Barr advocates for a more measured, patient approach, suggesting that borrowing costs should remain restrictive until definitive evidence confirms a sustainable move toward the 2% target. Meanwhile, Chicago Fed President Austan Goolsbee acknowledged the progress made on disinflation but warned of a "neutral-loose" policy environment should price levels remain sticky, framing a 3% rate as a potential benchmark for neutral policy.

Simultaneously, the Australian Bureau of Statistics reported that the national unemployment rate held steady at 4.1%, outperforming the forecasted increase to 4.2%. While the addition of 17.8K new jobs fell slightly short of the 20K estimate and the previous reading of 68.5K, the underlying conditions remain remarkably tight.

These signs of stability in the Australian labor market have solidified expectations of a more hawkish Reserve Bank of Australia (RBA). Market participants have now fully priced in a 25-basis point (bps) hike in the Official Cash Rate (OCR) to 4.1% by the August meeting. This sentiment is bolstered by Governor Michele Bullock, who has repeatedly emphasized that the RBA will not hesitate to act if data warrants further tightening. Her warnings regarding structural inflation suggest that future hikes will be strategic anchors for carry-trade flows, provided the global risk environment remains favorable. Bullish Momentum Poised for Resumption Following Shallow Technical Pullback_1

Bullish Momentum Poised for Resumption Following Shallow Technical Pullback_1

Technical Analysis

From a technical perspective, the AUD/USD pair remains firmly ensconced in a primary uptrend, characterized by a consistent series of higher highs and higher lows. While the price has recently undergone a modest corrective phase, the broader bullish trajectory remains unchallenged.

The pair recently retraced toward the 100-period Moving Average, currently situated at 0.7039, which is acting as a primary zone of interest. Further down, the 200-period Moving Average sits at 0.6898, representing the ultimate dynamic support floor. A failure to hold above this level would be required to signal a structural shift in the current trend.

Our momentum analysis via the RSI indicates that this brief pullback has pushed the indicator to the 38 level, nearing oversold territory despite a relatively small move in price. This suggests that bearish conviction is dissipating rapidly. Furthermore, the MACD histogram is printing progressively smaller bearish bars, signaling a loss of downward velocity. While the signal lines have dipped slightly below the neutral threshold, an imminent bullish crossover in the histogram would likely propel the signal lines back into positive territory. This technical setup validates the thesis of a potential reversal from this support cluster, as the path of least resistance remains to the upside.

Trading Recommendations

Trading direction: Buy

Entry price: 0.7060

Target price: 0.7275

Stop loss: 0.6900

Validity: Mar 04, 2026 15:00:00

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Bullish Momentum Poised for Resumption Following Shallow Technical Pullback

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