Fundamental Overview
Yesterday, the USD weakened across the board following a benign US CPI report where the data came in line with expectations. The market firmed up the rate cuts expectations with September and December now fully priced in. We saw a general risk-on sentiment as a result and barring negative surprises in the following days and weeks, this trend might have some more legs.
The AUD, on the other hand, came a bit under pressure following the Australian labour market data tonight but this might be just a dip-buying opportunity for the bulls as the risk sentiment and general US Dollar weakness should support the pair into new highs.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD yesterday finally broke above the key resistance zone around the 0.6650 level following the US CPI report. The technical trend remains bullish as the price continues to print higher highs and higher lows.
The support from the benign US CPI figures and the breakout should see the buyers piling in to position for a rally into the 0.6870 level. A break below the trendline should invalidate the bullish case and see the sellers taking control.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price pulled back tonight following the disappointing Australian jobs data. We are now near the minor trendline and the resistance-turned-support. This is where the buyers will likely pile in with a defined risk below the support zone and position for a rally into the 0.6870 level.
The sellers, on the other hand, will want to see the price breaking below the support to start stepping in and increase the bearish bets in case the price falls below the major trendline around the 0.66 handle.
Upcoming Catalysts
Today the US Jobless Claims figures will take the centre stage as the market will want to see if the last week’s numbers were the start of a trend or just a blip.
