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 US PCE came in line with expectations.
  • 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 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 erase most of the losses from the US CPI release and almost reached the trendline resistance around the 0.66 handle. The price couldn’t push right into it as the pair rolled over before that. We are now back at the key support zone around the 0.6520 level where the buyers will look to step in with a defined risk below it to position for a break above the trendline and a rally 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 0.6272 level.

AUDUSD Technical Analysis – 4 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 4 hour

On the 4 hour chart, we can see that the price broke below the upward trendline and the red 21 moving average that were defining the short term bullish trend. This breakout should give the sellers a bit more conviction for a resumption of the major downtrend although they will need also a break below the key support to confirm it. We will also have many key US economic data this week and another set of hot releases will likely be a tailwind for the greenback.

AUDUSD Technical Analysis – 1 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 1 hour

On the 1 hour chart, we can see that the price has been diverging with the MACD for some time. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we got a breakout of the trendline which should point to a reversal although we will also need a break below the key support zone to confirm it. The buyers will likely pile in here to position for a break above the major downward trendline, while the sellers will wait for a break below the support to position for a drop into the 0.6272 level or use this pullback into the broken trendline to position into the break of the support with a better risk to reward setup.

Upcoming Events

Today, we have the US Q1 Employment Cost Index and the Consumer Confidence report. Tomorrow, we get the US ADP, the ISM Manufacturing PMI, the Job Openings and the FOMC rate decision. On Thursday, we will see the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP and ISM Services PMI.