Fundamental
Overview
The USD last week lost
ground across the board following the soft US CPI report as the market priced back in two rate
cuts by the end of the year. The moves were reversed soon after though as we
got a bit more hawkish than expected FOMC decision where the dot plot showed that the Fed expected just one cut for
this year despite the soft US CPI report.
Fed Chair Powell backpedalled on the projections nonetheless
making them a bit less worrying as the central bank remains very data
dependent. The rally in the US Dollar eventually picked up steam as the risk
sentiment turned more cautious.
The AUD, on the other hand,
got pressured mainly because of the risk-off sentiment and the US Dollar
strength. This week, we have the RBA rate decision where the central bank is
expected to keep the Cash Rate unchanged and keep their hawkish stance.
AUDUSD
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that AUDUSD spiked into the top of the range around the 0.67 handle
following the soft US CPI release but eventually dropped back into the bottom
of the range following the more hawkish than expected FOMC decision and the
risk-off sentiment.
This is where we can expect
the buyers to step in with a defined risk below the support to position for a
rally back into the resistance. The sellers, on the other hand,
will want to see the price breaking lower to increase the bearish bets into the
0.65 handle next.
AUDUSD Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see more clearly the rangebound price action between the 0.67 resistance and
the 0.66 support. These will be the key levels that the market will likely need
to break to start a more sustained trend. For now, will could keep bouncing
around as the market awaits new catalysts.
AUDUSD Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see that we are starting to consolidate around the support as the price action
became more rangebound. The buyers will want to see the price breaking above
the trendline and the 0.6620 level to gain more
conviction and increase the bullish bets into the 0.67 handle.
The sellers, on the other
hand, will likely lean on the trendline to position for a break below the key
support with a defined risk. The red lines define the average daily range for today.
Upcoming
Catalysts
Tomorrow we have the RBA Policy Decision and later in the day the US Retail
Sales and US Industrial Production. On Thursday, we get the US Housing Starts,
Building Permits and US Jobless Claims figures. On Friday, we conclude the week
with the Australian and US PMIs.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
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