AUDUSD Technical Analysis | Forexlive

On the
daily chart below, we can see that after the big USD appreciation in May caused
by strong economic data and a hawkish repricing in interest rates expectations,
the AUDUSD pair broke out of the 3-month long range. At the start of the week,
it looked like the price pulled back to retest the broken support turned resistance and then
continued lower with the 0.6168 as the ultimate target.

Unfortunately,
some Fed members talked about a pause
in June to gather more data before deciding on a further increase. What we’ve
seen in the aftermath is a fast unwinding of hawkish expectations that were
also supported by soft data yesterday in the ISM Manufacturing PMI and Unit Labour Cost reports.
The price is now approaching the red 21 moving average and we
are likely to find sellers there targeting another breakout and eventually the
0.6168 low.

AUDUSD Technical Analysis

On the 4
hour chart below, we can see that AUDUSD has broken above the downward trendline
yesterday and the bullish momentum skyrocketed as the buyers jumped
aggressively on the bullish wave. This rally has overstretched a bit though as
depicted by the price distance from the blue 8 moving average.

Generally,
in such cases, the price consolidates or pulls back before the next move. We
can also notice that the last low into the 0.6450 level was diverging with the
MACD
suggesting that the bearish momentum was weakening. Divergences generally
signal a pullback or a reversal incoming.

On the 1
hour chart below, we can see that the sellers don’t have strong resistance levels
to lean on at the moment as the only good one comes at the 0.6680 level where
we can find the confluence of the
61.8% Fibonacci retracement level
and the previous swing resistance.

What the
sellers may want to see is a break below the 0.6563 support that would switch
the bullish short-term structure into a bearish one, and then pile in to target
the 0.6460 low first and the 0.6168 level next. The buyers, on the other hand,
will have the zone between the 0.6563 and 0.6580 as support for another push to
the upside into the 0.6680 resistance.

Today, all eyes will be on
the US Non-Farm Payrolls (NFP) report, with the potential for various outcomes:

• If
  the data exceeds expectations and is accompanied by higher-than-anticipated
  average hourly earnings, it is likely to raise the probability of a rate hike
  in June and possibly even indicate the likelihood of a rate hike in July. This
  particular scenario may raise concerns within the market regarding a potential
  spiral of wages and prices.
• Conversely,
  if the data is positive but falls short of expectations in terms of average
  hourly earnings, it is expected to further weaken the USD, as it would not
  significantly impact rate expectations. In this case, the market will eagerly
  await the Consumer Price Index (CPI) report scheduled for next week.
• If
  the data disappoints across all aspects, it will be seen as negative news and
  could potentially trigger risk aversion in the markets, leading to an increased
  demand for the USD. However, considering recent comments made by Federal
  Reserve officials, we might observe a weakening of the USD due to diminished
  expectations regarding future interest rate hikes.