The Australian dollar fell back to 0.78 zone in early European session and erased overnight gains on upbeat Australian trade balance data. Trade surplus widened to A$1.05 billion in January, overshooting forecast for A$200 million surplus and against December’s gap of A$ 1.14 billion. Strong data little helped the Aussie to extend recovery, which was repeatedly capped by sideways-moving 20SMA at 0.7836. Fresh weakness returned below the base of thick daily cloud (0.7817) weakening immediate structure, but was so far contained by 10SMA (0.7796), keeping intact key supports at 0.7784/71 (200/100SMA’s). However, the downside remains at risk after Wednesday’s Hanging Man which signaled reversal and requires strong bearish close today to confirm the pattern. The notion is supported by negative momentum studies and thick daily cloud which so far limited upside attempts and weighs heavily. On the other side, hopes for fresh attempts higher will remain in play while 200/100 SMA supports hold, with focus on US jobs data which could boost the Aussie on weaker than expected release. Also, signals that the US may exclude some countries from their tariff plan would be further support. Bullish scenario needs firm break into daily cloud and lift above 20SMA to signal fresh advance.
Res: 0.7817, 0.7836, 0.7879, 0.7893
Sup: 0.7796, 0.7784, 0.7771, 0.7756
