AUD/USD spiked to 0.8105, lifted by the ECB meeting, where now?

• AUD/USD: headed to 0.8162 or back to 0.7730?
• All eyes are now on US and Aussie GDP.

AUD/USD spiked to 0.8105, lifted by the ECB meeting when Draghi did little to talk down the value of the euro which led to further slides in the dollar, where a low of 88.4380 was made from a high of 89.3300 earlier in the day and before the event. Currently, AUD/USD is trading at 0.8087, up 0.16% on the day, having posted a daily high at 0.8120 and low at 0.8043.

The weakness in the greenback has not been sudden and indeed, the rise in the AUD from USD 0.765 to USD 0.8118 the high since mid-December can be largely attributed to dollar weakness where the DXY was sat at 94.10. analysts at Westpac explained that most models attribute around 70% of the increase in the AUD/USD to USD weakness.

In most recent trade, the fall in the USD/CNY overnight put the USD under broad pressure again and enabled an extension from 0.8055 to the aforementioned highs of 0.8118 until Europe took over just before bulls could get a hold of the September 2008 trend high of 0.8125. A break of that level would likely have cemented the bullish case for another blue sky rally to 0.8160 May 2016 highs where a constructive technical case could start to build up for the 0.86 handle on the wider scope.

Instead, and ahead of the ECB where the market had been in anticipation of a strong possibility that Draghi would talk down the euro, AUD/USD retreated to 0.8069, between 0.8043 the Asia low and 0.8083 as Wednesday's high, a move influenced by profit-taking before the event. 

So where do es that leaves AUD/USD now?

At the current spot, a period of consolidation is likely between 0.8040/0.8100 in the absence of any significant and unforeseen market positioning until we get details of the US and Australian GDP data.  Later today, the Atlanta Fed will release the final update of its nowcast for Q4 US GDP growth. The January 18 update stood at 3.4%. The current Bloomberg consensus forecast is 3.0%. The official advance estimate of Q4 GDP growth will be published by the BEA tomorrow.

In respect of Australia's, analysts at Westpac explained, "The Q4 CPI release on Jan 31 is lining up as a key event for RBA expectations and the AUD/USD uptrend. A weaker-than-expected outcome would dash the view that the RBA will hike sooner rather than later and would likely see the AUD join the NZD at the back of the queue of currencies benefiting from the USD's decline."

AUD/USD levels

analysts at Commerzbank noted that AUD/USD had eroded the 55 month and 200 moving averages at 0.8025/61 and feel that there is still scope for the 0.8125 September high and the 0.8196 2016-2018 resistance line: 

"The 50% retracement is also found here at 0.8165 (of the move down from 2014) together with the May 2015 high at 0.8162 and we would allow for initial failure. It remains immediately bid above the accelerated uptrend at .7961..." that otherwise, "guards last weeks low at 0.7808 and this guards the 200-day ma at 0.7730.