AUD/USD signal as Australia trade surplus spikes

The Australian dollar (AUD/USD) is hovering near its highest level since January this year after the latest interest rate decision and positive economic data. It is trading at 0.7287, which is about 4.60% above the lowest level this year.

Australia’s trade surplus grows

The AUD/USD pair has been in the spotlight this week as investors reflect on the RBA interest rate decision and key economic data. 

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On Tuesday, the RBA delivered a mild interest rate decision that was in line with what analysts were expecting. It left interest rates unchanged and insisted that a rate hike will only come when real inflation moves solidly above the 2% target.

Australia has also published several important economic data. On Tuesday, data by Markit and AIG showed that the country’s manufacturing PMI jumped to the highest level in months in February.

On Wednesday, data revealed that the Australian economy did well in the fourth quarter even amid the Omicron variant. Precisely, it expanded by 3.4% on a quarter-on-quarter basis and by 4.2% on a year-on-year basis. The two were better than the median estimates. The statistics agency attributed the situation on the strong consumer spending.

On Thursday, the AUD/USD pair reacted to the latest trade numbers. The commerce department said that exports jumped by 8% in January while imports fell by about 1%. As a result, the total trading surplus widened to more than A$12 billion from the previous A$8.36 billion. This situation will likely continue as commodity prices rise.

The next key catalysts for the AUD/USD pair will be the upcoming US jobs numbers scheduled for Friday this week. Analysts expect the data to show that the labor market did well in February this year.

AUD/USD forecast

The daily chart shows that the AUD/USD pair has been in a strong bullish trend in the past few days. The pair is trading at 0.7287, which is slightly below the key resistance at 0.7315, which was the highest point on January 14th. 

The Aussie has also moved above the 25-day and 50-day moving averages. Therefore, there is a likelihood that the pair will maintain its bullish trend as bulls target the 38.2% Fibonacci retracement level at 0.7400.