AUD/USD stages modest recovery to 0.7050 area ahead of US data

• Trade surplus widens more than expected in Australia.
• US Dollar Index struggles to find direction.
• Coming up: Weekly jobless claims, Q4 nonfarm productivity & labour costs from the U.S.

After slumping to its lowest level in more than 2-months at 0.7020 yesterday amid the disappointing GDP data from Australia, the AUD/USD pair is correcting this week’s losses and hopes to snap the 7-day losing streak. As of writing, the pair was trading at 0.7048, adding 0.22% on a daily basis.

Earlier today, the data published by  the Australian Bureau of Statistics showed that the trade surplus in January rose to AUD 4.55 million from AUD 3.8 million and surpassed the market expectation of AUD 3 million to help the currency shake off the bearish pressure. Additionally, retail sales, which declined by 0.4% in December, rebounded in January and increased by 0.1% to provide additional support to the pair.

In the meantime, the US Dollar Index is moving up and down in a tight range below the 97 handle for the second day in a row suggesting that investors are waiting for the next catalyst before deciding where the currency is likely  to go next. Later in the session, weekly jobless claims and fourth quarter unit  labour costs & nonfarm productivity data from the U.S. will be looked upon for fresh impetus.

Key technical levels