Fundamental
Overview
The USD rise stalled last
week as the US government shutdown delayed many key US economic reports. The
dollar “repricing trade” needs strong US data to keep going, especially on the
labour market side, so any hiccup on that front is likely to keep weighing on
the greenback. The market pricing is now back to 45 bps of easing by year-end
and 110 bps by the end of 2026. This could still be too dovish, but we will
need strong data to reprice.
In the absence of the
government data, an October rate cut is now seen as a done deal. The reality is
that an October cut was never really in question. It’s the December cut that
could be priced out in case the data strengthens. We still have three NFP and
two CPI reports before the December meeting.
On the AUD side, not much
has changed in the meantime. The RBA kept everything unchanged at the last
meeting with RBA Governor Bullock not offering much in terms of forward
guidance other than the usual data dependency and meeting by meeting approach
to interest rate decisions. Traders are waiting for the next quarterly CPI
report and the employment data. At the moment, the market is pricing 14 bps of easing by year-end and 30 bps cumulatively by the end of 2026.
AUDUSD
Technical Analysis – Daily Timeframe
AUDUSD daily
On the daily chart, we can
see that AUDUSD pullback stalled at the most recent swing high at 0.6627. This
is where the sellers continue to step in with a defined risk above the level to
position for a drop back into the 0.6520 low. The buyers, on the other hand,
will want to see the price breaking higher to increase the bullish bets into
the top trendline next.
AUDUSD Technical Analysis – 4 hour Timeframe
AUDUSD 4 hour
On the 4 hour chart, we can
see that the pair got stuck in a range between the 0.6575 support and the
0.6627 resistance. Market participants will likely continue to play the range
until we get a breakout on either side.
AUDUSD Technical
Analysis – 1 hour Timeframe
AUDUSD 1 hour
On the 1 hour chart, there’s
not much else we can add here as the sellers will be better off leaning on the resistance
or wait for a break lower, while the buyers will have a better risk to reward
setup around the support. The red lines define the average daily range for today.
Upcoming Catalysts
On Thursday we have Fed Chair Powell speaking and the US Jobless
Claims (if the shutdown is lifted). On Friday, we conclude the week with the
University of Michigan Consumer Sentiment report.
