The AUDUSD resumes its fall as the US data remains hot.
The Fed raised rates by 25 bps as expected and kept the policy statement unchanged. The market was eager to see if the Fed Chair Powell could offer some forward guidance but got disappointed as he just reaffirmed their data dependency. Yesterday, the US Jobless Claims beat expectations across the board by a big margin giving the US Dollar a boost.
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 makes their job harder as the Australian Jobs report surprised again to the upside but the Inflation report missed expectations.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD has been falling pretty hard since rejecting the 0.69 resistance. The price has broken below many key support levels and the natural target now should be the 0.6563 level.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a strong resistance level now around the 0.67 handle where we can find the 38.2% Fibonacci retracement level and the blue 8 moving average for confluence. The sellers are likely to lean on this resistance with a defined risk above and target the 0.6563 support. The buyers, on the other hand, will want to see the price breaking above the resistance to pile in and target the 0.69 handle.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the bearish setup but if the selling momentum remains strong and the economic data today surprises, we might see the sellers leaning already on the black trendline. The buyers should nevertheless wait for the break above the resistance to have more conviction.
Upcoming Events
Today the market will be focused on the US PCE and ECI reports. Given that the PCE is less timely than the CPI and the market is already looking forward to the next CPI, only a big upside surprise in the data can be market moving. In fact, it’s more likely that the market will pay closer attention to the ECI as the Fed is focused on the wages data. A higher-than-expected figure should be bullish for the US Dollar, while a lower-than-expected one should weigh on the greenback in the short term.