Fundamental Overview
The USD continues to remain under pressure amid positive risk sentiment and the imminent rate cuts from the Fed which should help global growth. These are generally bearish drivers for the greenback.
In fact, the appreciation of the AUD has been mostly driven by the US Dollar side of the equation, although it outperformed the other major currencies due to the hawkish RBA. In fact, the market pared back more aggressive rate cuts expectations and it’s now seeing just one cut by the end of the year.
The focus will be on tomorrow’s Flash PMIs and then Fed Chair Powell speech at the Jackson Hole Symposium on Friday.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD had an incredible rally from the lows set at the beginning of August as the market erased the growth scare and added to the gains as the risk sentiment kept on improving. The next target for the buyers should be the high at the 0.68 handle. The sellers, on the other hand, will want to see the price falling back below the key 0.67 handle to start target new lows.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we now have a good support zone around the 0.67 handle where we can find also the trendline for confluence. This is where we can expect the buyers to step in with a defined risk below the trendline to position for new highs with a better risk to reward setup. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop into the 0.6550 level next.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can glean from this timeframe other than waiting for a pullback into the key support zone where the buyers will look for a bounce, while the sellers will look for a break. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow we get the Australian PMIs, the US Jobless Claims and US PMIs. On Friday we conclude the week with Fed Chair Powell speaking at the Jackson Hole Symposium.