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    Aussie Surges After Bullish Breakout Amid Trade Optimism

    January 24, 2025

    Key Points:

    • The Aussie (AUD/USD) breaks out of its narrow range, closing at 0.63057, with a high of 0.63091, following bullish momentum.
    • Momentum indicators suggest further upside potential if sentiment remains positive.
    • Traders cautiously optimistic ahead of US trade policy updates and the Bank of Japan’s interest rate decision–a Trump policy shift or BoJ surprise could fuel market volatility.

    The AUD/USD pair surged on Thursday, breaking out of its recent consolidation phase and closing at 0.63057, marking a gain of 0.37% for the day. The pair reached an intraday high of 0.63091, as traders reacted to President Donald Trump’s softened stance on US-China trade relations and anticipation of the Bank of Japan’s policy decision.

    Earlier this week, AUD/USD managed to break above long-term downtrend resistance, but price action remained subdued within a narrow range. Despite the positive momentum, market participants remain cautious ahead of potential tariff announcements expected on February 1, which could influence further price action.

    Technical Analysis

    Picture: AUDUSD rises 0.37%, testing resistance at 0.63091 with strong bullish momentum, supported by positive technical indicators, as seen on the VT Markets app.

    The AUD/USD pair gained 0.37%, rising from an opening of 0.62827 to a session high of 0.63091, reflecting bullish momentum.

    The moving averages (MA 5,10,30) show a strong upward movement, with the short-term MAs crossing above the longer-term MA, suggesting continued bullish momentum. The price is trading above all moving averages, indicating buying pressure.

    The MACD (12,26,9) signals a bullish trend, with the MACD line crossing above the signal line and a rising histogram confirming increasing momentum. If momentum sustains, further upward movement could be expected.

    Resistance is currently seen around 0.63091, aligning with the recent high, while support is found near 0.62544, which has provided a solid base for the recent rally. A break above resistance may push the price higher, whereas a pullback to support could test buying strength.

    Trump Softens Trade Stance, Boosting Sentiment

    President Trump’s address at the World Economic Forum (WEF) in Davos struck a more conciliatory tone on the US-China trade relationship, easing market concerns. He remarked, “We don’t have to make it phenomenal. We have to make it a fair relationship,” signaling a possible shift from his previous hardline stance.

    These comments contrast sharply with his earlier campaign rhetoric, which floated the possibility of 60% tariffs on Chinese imports. The softer tone has lifted market sentiment, with AUD/USD benefiting from improved risk appetite as investors reassess the likelihood of aggressive trade measures.

    The Aussie’s Outlook

    Traders are keeping a close eye on developments surrounding US trade policy, with a particular focus on Trump’s next tariff moves. Additionally, the BoJ’s upcoming policy decision remains a key event risk, with any deviation from expected monetary policy potentially impacting risk-sensitive assets like AUD/USD.

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