AUDUSD Technical Analysis | Forexlive

USD

• The Fed left interest rates unchanged as
  expected at the last meeting with basically no change to the statement.
• Fed Chair Powell stressed
  once again that they are proceeding carefully as the full effects of policy
  tightening have yet to be felt.
• The recent US CPI missed
  expectations across the board bringing the expectations for rate cuts
  forward.
• The labour market is
  starting to show weakness as Continuing Claims are now
  rising at a fast pace and the recent NFP report
  missed across the board. Last week though, the US Jobless Claims beat
  forecasts by a big margin, although volatility in the data is normal.
• The latest US PMIs came
  basically in line with expectations with a miss in the Manufacturing index and
  a beat in the Services measure.
• The recent Fedspeak has been leaning on
  the hawkish side, but the recent data suggest that the Fed is likely done for
  the cycle.
• The market doesn’t
  expect the Fed to hike anymore.

AUD

• The
  RBA raised the cash rate by 25 bps as expected as the central bank
  judged that the move was warranted to be more assured that inflation would
  return to target in a reasonable timeframe.
• The
  CPI report recently surprised to the upside
  prompting the market to price in a higher chance of another rate hike from the
  RBA in November, which is what we eventually got.
• The
  RBA Governor Bullock has been leaning on a more hawkish side recently, but the
  central bank remains optimistic on the future outlook.
• The
  labour market continues to weaken as seen also
  recently with the bulk of jobs added being part-time.
• The
  wage price index surprised to the upside as wage
  growth in Australia remains strong.
• The
  recent Australian PMIs fell further into contraction for
  both the Manufacturing and Services sectors.
• The
  RBA Meeting Minutes released last week were more
  hawkish than expected and showed that the central bank is now more worried
  about inflation expectations getting out of hand.
• The
  market expects the RBA to hold rates steady at the next meeting.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that AUDUSD is
getting closer to the key trendline around
the 0.6660 level where we can also find the 61.8% Fibonacci retracement level
for confluence. We can
expect the sellers to step in around the trendline more aggressively with a
defined risk above it to position for a drop back into the support zone at
0.65 and upon a further break, target new lows.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price has
been diverging with the
MACD for
quite some time right as it approaches the key trendline. This is generally a
sign of weakening momentum often followed by pullbacks or reversals. In this
case, it might be another confirmation for the sellers that we could see at
least a deeper pullback soon. More conservative sellers might want to wait for
the price to break the rising wedge pattern to the
downside before piling in and target the support at 0.65.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price bounced on the bottom trendline as the buyers stepped in to position for
a rally into the key trendline. The sellers, on the other hand, will want to
see the price breaking lower to invalidate the bearish setup and position for a
drop into the support zone.

Upcoming Events

Today, we will get the latest US Consumer Confidence
report and it will be interesting to see how the US consumers see the labour
market. Tomorrow, we will see the Australian Monthly CPI report which is going
to be important for the RBA given the recent hawkish stance. On Thursday, we
will see the US PCE and US Jobless Claims data with the market likely focusing
more on the latter given that we already saw the latest inflation data with the
US CPI report just two weeks ago. Finally, on Friday, we conclude the week with
the US ISM Manufacturing PMI which missed expectations by a big margin the last
time.