Before the European market on Tuesday (February 25th), with the gradual stabilization of the AUD/USD exchange rate, the focus of market attention has shifted to the upcoming Australian monthly inflation report and the dynamics of US economic policies. These factors will undoubtedly affect the trend of the Australian dollar, especially against the backdrop of the recent weakening of the US dollar.

Recently, the Australian dollar (AUD) has experienced a short-term correction, but with the decline in the yield of US treasury bond bonds, the US dollar continues to weaken, and the Australian dollar has found support again. The market is eagerly anticipating the upcoming monthly inflation report for Australia, which is expected to provide key guidance for the future direction of the Reserve Bank of Australia's monetary policy. Given the recent hawkish interest rate cuts implemented by the Reserve Bank of Australia, inflation data will become an important basis for the market to determine whether further tightening of monetary policy is needed.

However, external risk factors cannot be ignored. As trade tensions escalate, risk sentiment in the global market may react, leading to fluctuations in the AUD/USD exchange rate.

Technical analyst interpretation:

From a technical perspective, the Australian dollar/US dollar has shown a clear upward trend in recent times. The exchange rate is currently trading around 0.6340 and operating within an upward channel, indicating a relatively optimistic market sentiment. Especially on the 14th, the relative strength index (RSI) remained above 50, providing the possibility for further market growth.

Resistance level analysis: Currently, the short-term resistance level facing the Australian dollar/US dollar is at 0.6350, close to the 9-day moving average (EMA) of the index. If the price successfully breaks through this level, it may open up further upward space. The next major psychological resistance level is 0.6400, and if this price is breached, the exchange rate may test the upper boundary of the channel at 0.6440.

Support level analysis: From the perspective of downside risk, the support level for AUD/USD is at 0.6326, which coincides with the lower boundary of the 14th EMA and uptrend channel. If the price falls and breaks through this support level, it may lead to a short-term pullback, and further support levels can be monitored around 0.6300.

Short term trend outlook: Based on current technical charts, the short-term trend of AUD/USD remains bullish. There is ample room for upward movement, and if the resistance level of 0.6350 is broken, the exchange rate is expected to further rise to 0.6400 or even higher. But if there is a drastic change in market sentiment leading to a rebound of the US dollar, the Australian dollar/US dollar may briefly retreat to the lower support level.

Overall judgment: Overall, the technical outlook for the Australian dollar/US dollar remains optimistic, especially against the backdrop of a weak US dollar, with strong rebound momentum for the Australian dollar. The market is paying attention to the upcoming Australian inflation report and the potential impact of changes in US economic policies on the Australian dollar. If the Australian dollar can break through the recent key resistance level, it is expected to further rise.

conclusion

Overall, although external risk factors still exist, technically speaking, the Australian dollar/US dollar has significant short-term upward potential. After breaking through the key resistance level of 0.6350, it may lay the foundation for further upward movement, with a target of 0.6400 or even higher.