Fundamental
Overview
The USD weakened across the
board last Friday following the soft US NFP report. The data showed some more labour
market cooling with an increase in the unemployment rate and a decrease in wage
growth. We basically have an economy that is slowing but still growing.
We will
see if the market will be able to keep the positive sentiment on soft landing
hopes or start to worry about a recession.Yesterday, Fed Chair Powell testified to Congress but he didn’t offer anything in terms of forward guidance as they want to see more data before signalling any action.
The AUD, on the other hand,
gained last week against the US Dollar mainly because of the risk-on sentiment
as the US data continued to support at least two rate cuts from the Fed but
didn’t send recessionary signals. This week, we are seeing a consolidation as the market awaits the US CPI and Jobless Claims figures tomorrow.
On the monetary policy front, the Aussie got a boost from another
hot monthly CPI report last month which raised the chances of
a rate hike, although RBA’s Hauser poured some cold water on the
expectations as he said that he would rather hold rates steady for longer.
AUDUSD
Technical Analysis – Daily Timeframe
AUDUSD Daily
On the daily chart, we can
see that AUDUSD broke out of the two-month long range last week and consolidated
just above it ever since. The resistance
around the 0.6713 level has
now become support.
That’s where we can expect
the buyers to keep piling in with a defined risk below it to position for a
rally into the 0.6870 level next. The sellers, on the other hand, will want to
see the price falling back below the 0.6713 level to regain some control and
position for a drop into the 0.66 handle.
AUDUSD Technical
Analysis – 4 hour Timeframe
AUDUSD 4 hour
On the 4 hour chart, we can
see more clearly the consolidation just above the 0.6713 level as the market awaits
the key economic data tomorrow with the release of the US CPI and Jobless Claims
figures. For now, we will likely keep ranging here until we get a breakout on
either side.
AUDUSD Technical
Analysis – 1 hour Timeframe
AUDUSD 1 hour
On the 1 hour chart, we can
see that we now have a good resistance zone around the 0.6750 level. The buyers
will want to see the price breaking higher to increase the bullish bets into new
highs, while the sellers will likely keep on leaning on the resistance to
position for a break below the 0.6713 level. The red lines define the average daily range for today.
Upcoming
Catalysts
Tomorrow will be the most important day of the week as we get the US CPI and the
US Jobless Claims figures. On Friday, we conclude the week with the US PPI and
the University of Michigan Consumer Sentiment survey.
