Fundamental Overview
The US CPI report yesterday came in line with expectations and sealed the 25 bps cut next week with the probabilities standing around 97%. Overall, the market’s pricing remained largely unchanged around three rate cuts by the end of 2025.
This contributed to some US Dollar weakness although we are still consolidating around the highs. The market will likely need stronger evidence of inflation re-accelerating to price out the remaining rate cuts. For now, we reached the peak in the repricing.
On the AUD side, the RBA kept the cash rate unchanged as expected this week but toned down further its language as we slowly move towards the first rate cut in 2025. The Australian labour market report today came out much better than expected which pushed out the probabilities for the first cut to April instead of February.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD bounced around the key support around the 0.6360 level as the buyers stepped in to position for a rally back into the highs. The sellers will need to see the price breaking lower to increase the bearish bets into the 0.6267 level next.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the sellers will have a better risk to reward setup around the major trendline. The buyers, on the other hand, will want to see the price breaking above the trendline and the 0.6471 swing level to shift the bias to bullish and increase the bets into new highs.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor upward trendline defining the current bullish momentum on this timeframe. The buyers will likely lean on it to keep pushing higher, while the sellers will look for a break lower to target new lows. The red lines define the average daily range for today.
Upcoming Catalysts
Today, we get the latest US Jobless Claims figures and the US PPI data.
