The miss in the US CPI report triggered a heavy US Dollar selling across the board as the market started to see the end of the Fed tightening cycle. Moreover, the soft-landing narrative caused a strong positive risk sentiment in the markets as the labour market remains strong and the consumer sentiment keeps on rising. This week though, the better-than-expected Retail Sales data on the Control Group, which is a better gauge of consumer spending, and the big beat in US Initial Claims gave the USD a tailwind and we saw most of the losses after the US CPI getting erased.
The RBA, on the other hand, kept its cash rate unchanged with the usual hawkish comments and the promise of doing more if the data suggests so. In fact, the recent RBA meeting minutes showed that there was a strong case for a rate hike but the central bank decided that holding steady was a better choice and they will reconsider at the August meeting. The data for now points to another rate hike as the Australian Jobs report this week surprised again to the upside.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD couldn’t break above the 0.69 resistance again and retreated into the 0.6781 support level. Looking at the bigger picture, we have been mostly ranging since March as the market is probably awaiting some big fundamental change to start trending again.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is now consolidating around the 0.6781 support and the moving averages have crossed to the downside. The bias at the moment is bearish and a break below the low should see more sellers piling in to extend the fall into the 0.6563 support. The buyers, on the other hand, are likely to defend this level and target a bounce into the 0.69 handle again.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a mini range around the support level and the buyers and sellers are likely to “play the range” until one side gives up and leads to a breakout. The sellers will want to see the price breaking below the 0.6750 swing low to extend the selloff into the 0.6563 support. The buyers, on the other hand, will want to see the price breaking above the 0.6837 swing high to target a break above the 0.69 handle.