AUDUSD Technical Analysis | Forexlive
The NFP report released last Friday once again
surpassed expectations, extending its impressive streak of 14 consecutive
positive results on the headline number. However, upon closer examination of
the report, less promising aspects emerged.
The unemployment rate
witnessed a significant rise from 3.4% to 3.7%, marking the largest
month-over-month increase since the beginning of the pandemic. Additionally,
there was a slight decrease in the average weekly working hours, often
considered an indication of potential layoffs by employers. All in all, it was
mixed bag and there was something for everyone.
In a separate development,
the US ISM Services PMI fell well below expectations,
registering at 50.3 and narrowly missing the threshold for contractionary
territory. The employment sub-index contracted, and the prices paid sub-index
experienced a substantial decrease, returning to levels last observed in May
2020. As a consequence, the market adjusted its expectations, reducing the
probability of additional interest rate hikes by the Federal Reserve.
The Aussie jumped recently
as the RBA unexpectedly hiked rates by 25 bps again
stating that further tightening may be required. We also got a big miss in US Jobless Claims yesterday which have further
lowered the odds of a hawkish Fed. All else being equal, we should see the pair
trending upwards at least until the 0.6781 barring a hot CPI report next week.
AUDUSD Technical Analysis –
Daily Timeframe
On the daily chart, we can see that the failed
breakout and the pricing out of hawkish Fed expectations gave the AUDUSD a big
boost. Moreover, the recent surprising rate hike from the RBA helped the AUD to
make new highs and the big miss in US Jobless Claims yesterday just reinforced
the bullish bias. The natural target looks to be the key resistance at the
0.6781 level. The divergence with the
MACD between
the recent lows strengthens the case for the price testing the 0.6781
resistance again.
AUDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that after breaking
out of the downward trendline and the
0.6563 support turned resistance, AUDUSD
just kept on rallying with little pullbacks. Recently, the price pulled back
after the RBA hike into the swing support at the 0.6640 where the buyers found
also the red 21 moving average to lean
onto and resumed the rally towards the 0.6781 resistance. We should find
sellers leaning on that 0.6781 resistance but until then it looks like the
uptrend can continue.
AUDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we are starting to
see a divergence with the MACD right into the 0.6781 resistance. This is
generally a sign of a weakening momentum often followed by pullbacks or
reversals. For the buyers, a break above the recent high at the 0.6720 level
should lead to an extension to the upside. For the sellers, a downside break of
the rising channel should lead to a fall towards the 0.6580 level.