Fundamental Overview
Yesterday, we got two strong US data releases as the Jobless Claims and Retail Sales figures came out much better than expected. The initial reaction was US Dollar bullish, but after a while the market started to fade the move.
The reason is that the risk-on sentiment is generally negative for the greenback as the market focuses on positive global growth. Of course, the reasons to sell the USD are not that strong and that’s why in the big picture the major currency pairs have been mostly trading in a range for a year.
But in the short term, the changes in sentiment are influencing the price action and the US Dollar performance.
On the AUD side, this week we got a strong Australian labour market report which gave the Aussie a boost with the RBA keeping its hawkish stance.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD recently pulled back to test a key zone around the 0.6560 level and bounced strongly following the strong Australian labour market report. The next target for the buyers should be around the 0.6713 level where we will likely find the sellers stepping in with a defined risk above the level to position for a drop back into the 0.6560 level.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor resistance around the 0.6640 level where the price got rejected from several times in the past days. The buyers will want to see the price breaking higher to increase the bullish bets into the 0.6713 level. The sellers, on the other hand, will likely lean on the resistance with a defined risk above it to position for a break below the 0.6560 zone.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the recent price action which has been mostly rangebound. There’s not much else we can glean from this timeframe other than waiting for a breakout on either side. The red lines define the average daily range for today.
Upcoming Catalysts
Today we conclude the week with the University of Michigan Consumer Sentiment survey.