FUNDAMENTAL
OVERVIEW
USD:
The US Dollar came under
some more pressure yesterday following soft US Retail Sales and US ECI data. We
got a slightly dovish repricing on the back of the weaker data with the market
now pricing 60 bps of easing by year-end compared to 58 bps before the data
release.
The focus today is solely
on the US NFP report as it could be pivotal for the US Dollar. Given the
current market pricing there’s a high risk of a hawkish repricing in case the
data comes out strong. In such a scenario, we will likely see the greenback
rallying across the board.
On the other hand, a weak
report should strengthen the case for more Fed easing and might even see
traders bringing forward rate cut bets as some Fed members expressed scepticism
about labour market stabilisation. In that case, the US Dollar will likely come
under renewed pressure on dovish Fed bets.
AUD:
On the AUD side, the currency
continues to gain ground on the back of the hawkish RBA. As a reminder, the RBA
hiked the Cash Rate by 25 bps at the last meeting bringing it back to 3.85%. The
central bank delivered a hawkish surprise as it signalled two more rate hikes
by year-end compared to just one expected by the market at the time.
Today, the AUD jumped on
the back of some hawkish comments from RBA’s Hauser where he reiterated that
policy bias remains hawkish and the central bank is prepared to tighten if needed.
That wasn’t really something new, but it shows the market eagerness in buying
the Australian Dollar.
AUDUSD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
AUDUSD – daily
On the daily chart, we can
see that AUDUSD has almost reached the major
swing level at 0.7150. We have a trendline defining the bullish momentum. From
a risk management perspective, the buyers will have a better risk to reward
setup around the trendline to keep pushing into new highs. The sellers, on the
other hand, will look for a break lower to pile in for a drop into the next
trendline around the 0.68 handle.
AUDUSD TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
AUDUSD – 4 hour
On the 4 hour chart, we can
see we have a minor support zone around the 0.7090 level. If we get a pullback,
we can expect the buyers to step in on the support with a defined risk below it
to target a rally into new highs. The sellers, on the other hand, will look for
a break lower to pile in for a drop into the trendline.
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 buyers would have a better risk to reward
setup around the 0.7090 support where we have also a minor trendline for
confluence. The sellers, on the other hand, should look for a break lower to
pile in for a drop into the major trendline around the 0.6950 level. The red
lines define average daily range for today.
UPCOMING CATALYSTS
Today we have the US NFP report. Tomorrow, we get the US Jobless Claims
figures. On Friday, we conclude the week with the US CPI report.
