AUDUSD is ready for a reversal with target 0.631

The AUD/USD indicates a slight uptick, trading around 0.6580 on Tuesday after registering losses in the previous session. The improvement in NAB's Business Confidence may have contributed to supporting the Australian Dollar. The evident resumption of the downward trend around the Australian dollar led the AUS/USD to leave behind a two-day recovery, remaining under pressure in the sub-0.6600 zone at the beginning of a new trading week. So far, dollar dynamics, coupled with the still-lacking convincing signs of an economic recovery in post-pandemic China, are expected to continue dictating the mood around the spot and keeping its price action subdued, all in combination with an anticipated steady hand by the RBA in its February meeting. Returning to the RBA, it is widely expected to leave its official cash rate unchanged at 4.35% next month. The downtick in inflation figures recorded in December, along with further cooling of the (still tight) labor market, have underpinned that consensus among market participants for the time being. That said, the near-term outlook for the AUD remains tilted to the dovish side, a view that could gain further traction if the Federal Reserve continues to push back bets for an interest rate cut in the next few months. On the daily chart, I have highlighted a possible short scenario likely to unfold if confirmation is received around the 0.66-0.6650 level, with a final target of 0.63 and the recapture of all sell-side liquidity. Greetings and have a good day of trading to everyone.