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After losing the 0.87 handle, AUD/USD managed to recover, enjoying some risk appetite and profit taking.

However, as the volatile month comes to an end, so does the recovery.

Here is the recent weakness on the 30 minute chart:

AUDUSD weaker after soft Australian PPI January 31 2014 technical forex chart

0.8825 was the high level seen by AUD/USD. The peak was reached as the crisis in emerging markets seemed to be under control with bold moves coming from central banks, especially from Turkey. The risk appetite atmosphere certainly helped the Aussie, and also provided an opportunity for a recovery.

The announcement of another QE tapering by the Federal Reserve didn’t hurt the pair, but after US GDP also came out as expected, but with a strong 3.2% value, the Aussie began to hesitate. A last move up followed, but the pair fell short of reaching the 0.8825 level.

From there, weak Australian PPI kicked in: it came out at only 0.2% in Q4, much lower than 0.7% expected. This contradicts the upbeat CPI level, and there are some doubts that the RBA will turn hawkish in the upcoming meeting on February 3. The RBA will probably remain open to any kind of moves.

In addition to the week PPI, end of month adjustments also weigh on the Australian dollar.

AUD/USD finds support above 0.8750, with additional support awaiting at the round number of 0.87. In case of a recovery, the week’s high of 0.8825 will serve as resistance.

For more levels, events and analysis, see the Aussie dollar forecast.