AUDUSD Technical Analysis | Forexlive

The miss in the US CPI report caused a heavy depreciation in the US
Dollar as the market saw the Fed done with the tightening soon. In fact, the market
priced out the hawkish expectations for futures rate hikes but kept the July
hike chances unchanged as the labour market remains tight and the Fed speakers
didn’t hint to any skip or pause following the CPI release.

The RBA kept its cash rate
unchanged with the usual hawkish comments and the promise of doing more if the
data suggests so. They repeated their determination of bringing the inflation
rate to target and that they will do what is necessary to achieve that. Central
banks are seeing the end of the hiking cycle, so they are guided by the
incoming economic data.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the miss in the
US CPI report led to a big and fast rally back into the 0.69 handle. The
sellers are likely to step in here with a defined risk above the level to
target a pullback into the 0.6781 level and then upon a break lower, the 0.6563
level. The buyers, on the other hand, will want to see the price breaking higher
to pile in even more and extend the rally into the 0.7139 high.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that after the
consolidation beneath the 0.67 handle the price broke out after the CPI release
and continued to rally with almost no pullback. From a risk management
perspective, a good spot for the buyers to position long again would be the 0.6781
support where we
can also find the 38.2% Fibonacci retracement level
and the red 21 moving average for confluence.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the price
is already reacting to the 0.69 resistance zone. There are two possible
scenarios here:

• The price breaks to the upside and the
  buyers pile in to extend the rally towards the 0.71 handle.
• The sellers pile in and the price starts
  to roll over towards the 0.6781 support.

Upcoming Events

Today the only notable
data on the agenda is the University of Michigan Consumer Sentiment report. The
data is unlikely to move the market much unless there are big deviations, the
market will likely focus more on the inflation expectations figures.