USD

  • The Fed left interest rates unchanged as expected at the last meeting 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.
  • The US CPI beat expectations for the third consecutive month, while the US PPI came in line with forecasts.
  • The US NFP beat expectations across the board although the average hourly earnings came in line with forecasts.
  • The US ISM Manufacturing PMI beat expectations by a big margin with the prices component continuing to increase, while the US ISM Services PMI missed with the price index dropping to the lowest level in 4 years.
  • The US Retail Sales beat expectations across the board by a big margin with positive revisions to the prior figures.
  • The market now expects the first rate cut in September.

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.
  • The wage price index surprised to the upside as wage growth in Australia remains strong.
  • The latest Australian PMIs showed the Manufacturing PMI almost jumping back into expansion while the Services PMI ticked slightly lower remaining in expansion.
  • The market expects the first rate cut in February 2025.

AUDUSD Technical Analysis – Daily Timeframe

AUDUSD Technical Analysis
AUDUSD Daily

On the daily chart, we can see that AUDUSD fell below the 0.64 handle but eventually bounced back to retest the previous lows where we can also find the 38.2% Fibonacci retracement level for confluence. This is where we can expect the sellers to step in with a defined risk above the Fibonacci level to position for a drop into the 0.6272 level. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 0.65 resistance zone where we have also the red 21 moving average for confluence.

AUDUSD Technical Analysis – 4 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 4 hour

On the 4 hour chart, we can see that the latest leg lower diverged with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it led to a pullback into the resistance around the 0.6475 level. If the price were to break higher, the chances for a reversal will increase and we could see a quick rally into the 0.6520 resistance.

AUDUSD Technical Analysis – 1 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 1 hour

On the 1 hour chart, we can see that we have a minor upward trendline defining the current bullish momentum with the red 21 moving average acting as dynamic support. The buyers are leaning on this trendline to keep bidding up the pair into new highs. The sellers, on the other hand, will want to see the price breaking lower to pile in and position for a drop into new lows.

Upcoming Events

Today we get the US Flash PMIs. Tomorrow, we have the Australian CPI data. On Thursday we will see the latest US Jobless Claims figures, while on Friday we conclude the week with the US PCE report.