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 Q1 GDP surprisingly missed expectations although the core components showed a strong economy, nonetheless. The Core PCE though surprised to the upside pushing rate cuts further away.
  • 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 PMIs missed expectations in April with the commentary citing lower inflationary pressures but also increased layoffs.
  • The market 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 CPI report beat expectations across the board with high underlying inflation measures.
  • 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 managed to rally all the way back to the key resistance zone around the 0.6520 level. This is where the sellers will look for shorting opportunities on the lower timeframes, while the buyers will want to see the price continuing higher to increase the bullish bets into the major trendline around the 0.66 handle.

AUDUSD Technical Analysis – 4 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 4 hour

On the 4 hour chart, we can see that we have a trendline defining the current bullish momentum with the red 21 moving average acting as dynamic support. If we get a pullback into the trendline, the buyers will likely lean on it with a defined risk below it to position for a rally into the 0.66 handle. 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.

AUDUSD Technical Analysis – 1 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 1 hour

On the 1 hour chart, we can see that the price is starting to diverge with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it might be a signal for a pullback into the trendline where the buyers will look to buy the dip. If the price were to break below the trendline, a reversal would be confirmed, and the sellers will have much higher chances to push the price into new lows.

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Today we conclude the week with the US PCE report.