Fundamental Overview
The USD got a boost recently from another set of hot data as the US Job Openings surprised to the upside and the prices paid index in the ISM Services PMI jumped to the highest level since 2023.
The market’s pricing didn’t change much though and Fed’s Waller yesterday kept the rate cuts hopes alive saying that the pace will be driven by inflation progress. Since the central bank has switched its focus back to inflation, the US CPI report next week should have a bigger influence on interest rates expectations than the US NFP tomorrow (barring big deviations).
On the AUD side, the RBA softened further its stance at the last policy decision as it nears the first rate cut. The market is seeing a 57% chance of a 25 bps cut in February although the first fully priced in cut is seen in April.
The Australian Monthly CPI yesterday showed core inflation easing with the Trimmed Mean CPI Y/Y coming in at 3.2%. The RBA’s inflation target band is 2-3%.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD is bouncing from the 2022 lows. This is where the buyers are stepping in with a defined risk below the lows to position for a rally back into the 0.69 handle. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the sellers will have a better risk to reward setup around the major trendline and the 0.6270 resistance. The buyers, on the other hand, will want to see the price breaking above that zone to gain even more conviction and increase the bullish bets into new highs.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor downward trendline defining the current bearish momentum on this timeframe. The sellers will likely keep on leaning on it to position for the break below the lows, while the buyers will look for a break higher to increase the bullish bets into the 0.6270 resistance. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow, we conclude the week with the US NFP report.
