USD

  • The Fed left interest rates unchanged as expected at the last meeting while dropping the tightening bias in the statement but adding a slight pushback against a March rate cut.
  • The US CPI beat expectations for the second consecutive month with the disinflationary trend reversing.
  • The US PPI beat expectations across the board by a big margin.
  • The US Jobless Claims beat expectations with the data remaining steady.
  • The latest US PMIs increased further from the prior month with the Manufacturing PMI beating expectations and the Services PMI missing.
  • The US Retail Sales missed expectations across the board by a big margin.
  • The market now expects the first rate cut in June.

AUD

  • The RBA left interest rates unchanged as expected with the central bank maintaining the usual tightening bias and data dependent language.
  • The recent Monthly CPI report missed expectations across the board which was a welcome development for the RBA.
  • The latest labour market report missed expectations by a big margin.
  • The wage price index surprised to the upside as wage growth in Australia remains strong.
  • The latest Australian PMIs showed the Manufacturing PMI falling back into contraction while the Services PMI jumped back into expansion.
  • The market expects the first rate cut in August.

AUDUSD Technical Analysis – Daily Timeframe

AUDUSD Technical Analysis
AUDUSD Daily

On the daily chart, we can see that AUDUSD bounced on the key support zone around the 0.6520 level where we had also the confluence with the moving averages. This is where the buyers stepped in to target a rally into the 0.6623 level. The sellers, on the other hand, will need the price to break below the support zone to invalidate the bullish setup and position for a drop into new lows.

AUDUSD Technical Analysis – 4 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 4 hour

On the 4 hour chart, we can see that the price is now near a downward trendline where we can find the red 21 moving average for confluence. This is where the sellers will likely step in with a defined risk above the trendline to position for a break below the support zone with a better risk to reward setup. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 0.6623 level.

AUDUSD Technical Analysis – 1 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 1 hour

On the 1 hour chart, we can see that we have also the 61.8% Fibonacci retracement level adding extra confluence to the trendline. What happens here will likely decide where the pair will go in the next few days as a strong rejection should lead to a drop into new lows, while a break higher will likely trigger a rally into the 0.6623 level.

Upcoming Events

This week we have some important economic data on the agenda. We begin today with the release of the US Consumer Confidence report. Tomorrow we will get the latest Australian monthly CPI report. On Thursday, we will see the Australian Retail Sales and later in the day, the US PCE and the latest US Jobless Claims figures. Finally, on Friday, we conclude the week with the US ISM Manufacturing PMI.