US

  • The Fed left interest rates unchanged as expected with basically no change to the statement.
  • Fed Chair Powell stressed once again that they are proceeding carefully as the full effects of policy tightening have yet to be felt.
  • The US Core PCE last week came in line with expectations.
  • The labour market remains pretty resilient but we are starting to see some weakness as Jobless Claims missed expectations once again this week with Continuing Claims now rising at a fast pace.
  • The US Consumer Confidence fell for the third consecutive month although the data beat expectations.
  • The US ISM Manufacturing PMI this week missed expectations by a big margin.
  • 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 RBA Governor Bullock downplayed the beat in the CPI data and made the market to pare back the rate hike bets.
  • 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 Australian Manufacturing PMI fell further into contraction with the Services PMI plummeting back into contraction as well.
  • The market expects the RBA to hold rates steady at the next meeting.

AUDUSD Technical Analysis – Daily Timeframe

AUDUSD Technical Analysis
AUDUSD Daily

On the daily chart, we can see that following the breakout of the key trendline, the AUDUSD pair extended the rally towards the 0.64 handle and it’s now eyeing the resistance around the 0.65 level. That’s where we can expect the sellers to step in more aggressively with a defined risk above the level to position for a drop back to the lows.

AUDUSD Technical Analysis – 4 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 4 hour

On the 4 hour chart, we can see that the price found a resistance at the previous swing level around 0.6445. From a risk management perspective, the buyers will have a much better risk to reward setup around the upward trendline where they will find the confluence with the swing high support and the 50% Fibonacci retracement level. The sellers, on the other hand, will want to see the price breaking below the trendline to invalidate the bullish setup and pile in for new lows.

AUDUSD Technical Analysis – 1 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 1 hour

On the 1 hour chart, we can see that the price bounced on the most recent higher low following the pullback from the 0.6445 resistance. The buyers are likely to increase the bullish bets in case the AUDUSD pair continues higher and breaks above the recent high. The sellers, on the other hand, will want to see the price breaking below the higher low around the 0.6415 level to confirm a bigger correction and target the support around the 0.6380 level.

Upcoming Events

Today, we conclude the week with the US NFP report and the ISM Services PMI. If the data misses expectations we are likely to see more downside for the USD in the short-term.