Fundamental
Overview
The bullish momentum in the
US Dollar seems to be waning despite the recent higher-than-expected US CPI and PPI reports. One caveat is that the market has now
priced out the aggressive rate cuts expectations and it’s almost perfectly in
line with the Fed’s projections.
Therefore, we will likely
need more strong US data to see the market pricing in an earlier pause in the
Fed’s easing cycle and give the US Dollar a further boost. The next big risk
events will be in November when we get the October data, the FOMC policy decision
and the US election.
On the AUD side, the RBA
continues to maintain its hawkish stance although that was toned down a bit in
the last meeting. Tomorrow, we get the Australian labour market report but unless
we get big deviations from the expectations, it’s unlikely to influence the
current pricing.
AUDUSD
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that AUDUSD continues to drop although the momentum slowed down. The target
for the sellers should be the 0.6622 level. That’s where we can expect the
buyers to step in with a defined risk below the level to position for a rally
back into the 0.68 handle.
AUDUSD Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that we have a downward trendline defining the current bearish
momentum. The sellers will likely keep on leaning on it to position for further
downside, while the buyers will want to see the price breaking higher to pile
in for a rally into new highs.
AUDUSD Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see more clearly the recent price action with the trendline acting as a strong
barrier. We have now a strong resistance around the 0.67 handle that the buyers
will need to break to start targeting new highs, while the sellers will look
for a rejection to pile in for new lows. The red lines define the average daily range for today.
Upcoming
Catalysts
Tomorrow we have the Australian Labour Market report, the US Retail Sales and
the US Jobless Claims data.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
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