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 US Core PCE
  yesterday came in line with forecasts with the disinflationary progress
  continuing steady.
• 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.
• 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 US Consumer
  Confidence this week beat expectations although the
  details about the labour market continued to weaken.
• The hawkish Fed members recently shifted
  their stance to a more neutral position.
• 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
  recent Monthly
  CPI report missed expectations across the board which is a welcome development
  for the RBA.
• The
  RBA Governor Bullock has been leaning on a more hawkish side recently, although she 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
  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 rejected
perfectly the key trendline around
the 0.6675 level where we had also the 61.8% Fibonacci retracement level
for confluence. The
sellers piled in with a defined risk above the trendline to position for a drop
into new lows with the first target being the support zone
around the 0.65 handle.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price has
been diverging with the
MACD into the
key trendline. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, it was another bearish confluence for the
sellers which was further supported by the rising wedge
formation, which is considered as a reversal pattern. The breakout of the wedge
might be another confirmation for the sellers that we will likely see at least
a deeper pullback into the 0.65 handle. The buyers, on the other hand, will
likely lean on the support to position for a rally with a better risk to reward
setup and target the break above the trendline.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price yesterday pulled back from the selloff following the breakout of the
wedge. The sellers leant on the downward minor trendline as they keep targeting
the support around the 0.65 handle. A break below the current minor support
around the 0.66 handle is likely to trigger another wave of selling as the
sellers will increase their bearish bets into the support. The buyers, on the
other hand, will want to see the price breaking higher to invalidate the
bearish setup and target a break above the major trendline.

Upcoming Events

Today, the main event will be the release of the US
ISM Manufacturing PMI which missed expectations by a big margin the last time.
A strong report is likely to give another boost to the US Dollar while weak
figures could weigh on the greenback in the short term.

See the video below