Fundamental Overview
The US Dollar continues to consolidate around the highs as the market reached the peak in the repricing of interest rates expectations and it will need stronger reasons to price out the remaining rate cuts for 2025.
This was signalled by the lack of US Dollar strength after lots of strong US data with the market’s pricing remaining largely unchanged around three rate cuts by the end of 2025. We might see the greenback remaining on the backfoot at least until the US CPI due next week.
Yesterday, Fed’s Waller and Fed’s Williams sounded like a rate cut in December is basically a done deal with the plan to slow the pace of rate cuts considerably in 2025. We will likely need another hot CPI report to force them to skip the December cut.
On the AUD side, the market expects just two rate cuts by the RBA next year with the first one fully priced in for May 2025. The Australian economic data remains solid while inflation continues to fall slowly keeping the central bank in a neutral stance.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD is stuck in a range between the 0.6440 support and the 0.6540 resistance. The market participants will likely keep on playing the range until we get a breakout on either side.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a very strong resistance zone around the 0.6540 level where we can also find the major trendline for confluence.
That’s where we can expect the sellers to step in with a defined risk above the resistance to position for the continuation of the downtrend. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and position for a rally into the next resistance at 0.6687.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor upward trendline defining the current pullback into the resistance. The buyers will likely lean on it to keep pushing higher, while the sellers will look for a break lower to target a break below the support. The red lines define the average daily range for today.
Upcoming Catalysts
Today, we get the US Job Openings data. Tomorrow, we have the US ADP, the US ISM Services PMI and Fed Chair Powell speaking. On Thursday, we get the latest US Jobless Claims figures. Finally, on Friday, we conclude the week with the US NFP report.
