AUDUSD may survive trend reversal and resume growth

AUDUSD seems to be showing signs of stabilization after its recent decline. Since the 20th of February, the price has fallen by 2.4% to the level of 0.62045. On Tuesday morning the pair opened at 0.62055.

The decline in the exchange rate followed the confirmation of U.S. President Donald Trump on the introduction of trade restrictions on Canada, Mexico and China. This news caused the U.S. dollar (USD) to strengthen. The increase in the general tariff on Chinese goods to 20% had a particular impact on the Australian dollar (AUD), as China is Australia's most important trading partner.

The AUD also faced headwinds after Australia's private investment data released on Thursday unexpectedly showed a 0.2% quarter-on-quarter contraction in Q4, missing market expectations for 0.8% growth. This followed a revised 1.6% growth in the previous quarter.

The attractiveness of the USD may diminish in the near term as investors worry about the impact of protectionist policies in the United States on the country's economic development, as well as the increased likelihood of interest rate cuts by the Federal Reserve (Fed). However, the upside potential for AUDUSD remains limited.

On Wednesday, the AiG manufacturing activity index and the Australian GDP will be released. According to the forecast, the Australian economy is expected to grow by 0.5%, which may have a strengthening effect on the current exchange rate. Thursday will also see the release of the Australian and US Trade Balance data. The figure is expected to increase for both countries compared to the previous period.

Technical analysis shows the presence of a downtrend. The Chaikin oscillator indicates the predominance of sellers in the market and the continuation of the increase in their number. The RSI has dropped to the oversold level, indicating a bearish trend. 

The daily chart of AUDUSD shows a bullish divergence on the Chaikin Oscillator, indicating a possible upward trend reversal. However, other indicators do not support this divergence.

Current recommendation:

Buy at the current price. Take profit - 0.63130. Stop Loss - 0.61400.