AUDUSD Technical Analysis | Forexlive

AUDUSD Fundamental Analysis

US

• The Fed left interest rates unchanged as
  expected at the last meeting.
• The macroeconomic projections were revised higher,
  and the Dot Plot showed that the FOMC still expects another rate hike by the
  end of the year with less rate cuts projected in 2024.
• Fed Chair Powell
  reaffirmed their data dependency but added that they will proceed carefully.
• The US Core PCE last
  week came in line with expectations, so the market’s pricing barely changed.
• The labour market remains
  pretty resilient but we are starting to see some weakness as Continuing Claims missed
  expectations once again last week pointing to an upward trend.
• The US Retail Sales
  recently beat expectations by a big margin with positive revisions to the prior
  figures, suggesting the consumers’ spending remains solid.
• The recent US PMIs showed
  that the economy now looks more balanced.
• Fed Chair Powelland other FOMC members continue
  to highlight
  the rise in long term yields as doing the job for the Fed and therefore they
  are expected to keep rates steady this week.
• The market doesn’t expect the Fed to hike anymore.

Australia

• The
  RBA kept interest rates unchanged as expected as they are seeing inflation
  returning to target with the current level of interest rates.
• The
  CPI report last week surprised to the upside
  prompting the market to price in a higher chance of another rate hike from the
  RBA in November.
• The
  labour market continues to weaken as seen also
  recently with the miss in the employment change and the losses in full-time
  employment.
• The
  RBA Governor Bullock downplayed the beat in the CPI data
  and made the market to pare back the rate hike bets.
• The
  Australian Manufacturing PMI fell further into contraction with
  the Services PMI plummeting back into contraction as well.
• The
  recent RBA Minutes were surprisingly hawkish but as we
  have seen last week, the RBA needs more data before deciding on another rate
  hike.
• 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 the AUDUSD pair
has been diverging with the
MACD for a
long time as the bearish momentum continues to weaken amid a prolonged
consolidation. Yesterday, the price broke above the upper bound of the triangle pattern, and
it’s now testing the key resistance zone
around the 0.6380 level. This is where the sellers are likely to step in and
defend the level as a further extension to the upside might trigger a rally
back to the 0.65 handle.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more closely the
recent breakout with the price retesting the broken trendline and
continuing higher. Here’s where the battle is going to be more tough, but the
odds are now skewed towards the upside unless we see the AUDUSD pair falling
back below the trendline leaving behind a fakeout.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
are starting to see a divergence with the MACD right around the resistance
zone. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, we might see another push to the upside
into the 0.64 handle where the price will complete the rising expanding wedge
pattern. This is a reversal pattern, so the sellers will want to wait around
the highs to position for another drop with a great risk to reward setup. If
the price were to break to the upside anyway though, the bearish setup would be
invalidated and the buyers will have a free road to target the 0.65 handle.

Upcoming Events

This week, we will get lots of tier one data points with
the US labour market and the FOMC decision in focus. Today, we have the US
Employment Cost Index and the Consumer Confidence report. Tomorrow, it will be
the time for the US ADP, the ISM Manufacturing PMI, the Job Openings data and
the FOMC rate decision. On Thursday we will have the US Jobless Claims data,
while on Friday we conclude the week with the US NFP report and the ISM Services PMI.