Fundamental Overview
The USD remains on the backfoot as the US data continues to point to resilient growth with falling inflation. Yesterday, we got a good US Retail Sales report suggesting that the stories of deteriorating consumer spending have been exaggerated. Overall, this should support the soft-landing narrative and be positive for the risk sentiment.
The AUD, on the other hand, keeps on gaining against the US Dollar mainly because of the risk-on sentiment. This morning we’ve been seeing even more weakness for the greenback which might be due to the selloff in the USDJPY pair as flows there could have spilled over into other markets.
On the monetary policy front, the Aussie remains supported on the back of a hawkish RBA given the sticky inflation. The next key event will be the Australian Q2 CPI report on July 31st.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD pulled back into the support around the 0.6713 level and bounced off of it as the buyers stepped in to position for the continuation of the uptrend. The sellers will need the price to fall back below the 0.6713 level to regain some control and position for a drop into the 0.66 handle next.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the bounce from the support level and the increase in momentum this morning amid general US Dollar weakness.There's not much else that we can glean from this timeframe, so we need to zoom in further to see some more details.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price has reached a key resistance around the 0.6750 level where the price got rejected from several times in the past weeks. The buyers will want to see the price breaking higher to increase the bullish bets into new highs.
The sellers, on the other hand, will likely step in around this level to position for a break below the 0.6713 level with a better risk to reward setup. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have Fed’s Waller speaking, while tomorrow we conclude with the Australian Labour Market report and the latest US Jobless Claims figures.