USD

  • The Fed left interest rates unchanged as expected with basically no change to the statement. The Dot Plot still showed three rate cuts for 2024 and the economic projections were upgraded with growth and inflation higher and the unemployment rate lower.
  • Fed Chair Powell maintained a neutral stance as he said that it was premature to react to the recent inflation data given possible bumps on the way to their 2% target.
  • The US CPI and the US PPI beat expectations for the second consecutive month.
  • The US Jobless Claims beat expectations last week.
  • The US ISM Manufacturing PMI beat expectations by a big margin with the prices component continuing to increase.
  • The US Consumer Confidence missed expectations although the labour market details improved.
  • The market now sees basically a 50/50 chance of a cut in June.

AUD

  • The RBA left interest rates unchanged as expected at the last meeting and finally dropped the tightening bias.
  • The last Monthly CPI report came in line with expectations although the underlying inflation measure increased from the prior month.
  • 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 further into contraction while the Services PMI continue to increase and remain in 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 broke again below the key 0.65 support zone and it’s now looking towards the 0.6443 low. That’s where we can expect the buyers to step in with a defined risk below the level to position for a rally back into the 0.6623 level. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 0.63 handle.

AUDUSD Technical Analysis – 4 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 4 hour

On the 4 hour chart, we can see that the pair seems to be trading inside a falling channel. If we get a bigger pullback from the current levels, we can expect the sellers to lean on the upper bound of the channel to position for a drop into the lows with a better risk to reward setup. The buyers, on the other hand, will need the price to break above the upper bound of the channel to invalidate the bearish setup and trigger a rally 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 more closely the recent price action with the pair now getting rejected from the resistance zone. The sellers might pile in around these levels already if we get strong US data or wait for a pullback into the top trendline in case the data misses estimates.

Upcoming Events

Today we have the US Job Openings and tomorrow the US ADP and the US ISM Services PMI. On Thursday, we get the latest US Jobless Claims figures while on Friday we conclude with the US NFP report.