AUDUSD Technical Analysis | Forexlive

The miss in the US
CPI report triggered a heavy US Dollar selling across the board as the
market started to see the end of the Fed tightening cycle. Moreover, the soft-landing
narrative caused a strong positive risk sentiment in the markets as the labour
market remains strong and the consumer
sentiment keeps on rising.

The RBA, on the other hand,
kept its cash rate unchanged with the usual hawkish comments and the promise of
doing more if the data suggests so. In fact, the recent RBA
meeting minutes showed that there was a strong case for a rate hike but the
central bank decided that holding steady was a better choice and they will
reconsider at the August meeting.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the recent
rally out of the US CPI report got rejected again at the 0.69 resistance.
The price was anyway overstretched at that point as depicted by the distance
from the blue 8 moving
average. In such instances, we can generally see some consolidation or a
pullback into the moving average before another major move.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the pullback
has made the moving averages to crossover and the sellers are already leaning
on the red 21 moving average to position for a bigger downside move. The buyers
are likely to step in at the 0.6781 level where we can also find the 38.2% Fibonacci
retracement level for confluence.
A break below this support would see more sellers piling in and extend the
selloff into the 0.6563 level.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price has been making higher highs and higher lows since bouncing near the
38.2% Fibonacci retracement level. We might be already seeing the bullish
momentum increasing and the buyers getting back control. The buyers will need
the price to break above the recent higher high at 0.6838 to confirm the
restart of the bullish trend and position for a breakout. The sellers, on the
other hand, will want to see the price breaking below the 0.6781 support to
pile in and target the 0.6563 level.

Upcoming Events

Today the main event
will be the US Retail Sales report. We are likely to see some US Dollar selling
in case the data beats expectations as the market is increasingly confident
that we will get a soft-landing. On the other hand, if the data misses
expectations by a low margin, we should see some short term USD strength that
is likely to be faded soon after. At the moment, the only scenario where the
USD appreciates substantially seems to be the one where the data misses by a
big margin causing some risk off sentiment. After the Retail Sales the market
will be keeping an eye on the US Jobless Claims on Thursday.

See also the video below: