Fundamental Overview
The US Dollar continues to consolidate despite the higher-than-expected inflation figures and a less dovish Powell last week. The market’s pricing remained largely unchanged at three rate cuts by the end of 2025.
This might be a signal that the market is now fine with the current pricing, and we will need stronger reasons to price out the remaining rate cuts. This could lead to some general US Dollar weakness in the short term.
On the AUD side, the market doesn’t expect the RBA to cut rates in December but sees two rate cuts in 2025. The Australian economic data remains solid while inflation continues to fall slowly keeping the RBA in a neutral stance.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD is now testing the key swing low level at 0.6540. This is where we can expect the sellers to step in with a defined risk above the level to position for a drop into the 0.6365 level next. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into new highs.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have also the 38.2% Fibonacci retracement level adding some confluence to the swing low level. This should technically strengthen this resistance zone. A break to the upside, will likely trigger a rally into the major trendline and the 61.8% Fibonacci retracement level around the 0.66 handle.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor support zone around the 0.6480 level. If we were to get a pullback, we can expect the buyers to step in around the support to position for a rally into the major trendline, 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
Tomorrow we get the latest US Jobless Claims figures, while on Friday we conclude the week with the Australian and US PMIs.