Throughout the previous week, we heard from central bank speakers. The prevailing consensus remains the same: a cautious approach awaiting further data before determining the extent of additional tightening. While the majority of the FOMC members expect two additional rate hikes in the current year, they consistently highlight their data-dependent approach. The data from last week leans towards supporting a rate hike, as the housing market indicators surprised to the upside, the US Jobless Claims remained stable, and the US Services PMI were stronger than expected. Naturally, the upcoming NFP and CPI reports will have a crucial role in shaping future expectations but if we continue to see positive data, the market's expectation of a rate increase by the Fed in July appears highly likely.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that since tapping into the 0.69 handle, AUDUSD sold off pretty heavily into the 0.67 handle where we can also find the red 21 moving average and the 50% Fibonacci retracement level. This is where we should expect buyers to come in to try another rally towards the 0.69 high. A failure to do so, should lead to a depreciation into the 0.6563 support.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that after breaking below the rising channel, the bullish trend switched to a bearish one as the moving averages have also crossed to the downside. At the moment, the price is getting rejected by the strong resistance near the trendline as there is confluence with the 38.2% Fibonacci retracement level and the red 21 moving average.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the current price action and the clean rejection from the Fibonacci level. The buyers are likely to lean on the support zone near the 0.6680 level with a defined stop below the low and target the 0.69 handle again. More conservative buyers may want to wait for the price to first break above the trendline before piling in and extend the rally towards the 0.69 high. On the other hand, the sellers should pile in even more aggressively if the price break below the 0.6660 level and target the 0.6560 support.
The data calendar for this week is relatively light, featuring only the US Jobless Claims on Thursday, followed by the US PCE on Friday. However, despite the limited data releases, we will still hear from many central bank members throughout the week.
