AUDUSD Technical Analysis

Fundamental
Overview

The USD got a boost last
week from the strong US PMIs which lifted Treasury yields and put in
question the rate cut in September. Once the market digested the report and saw
that there was more good news on the growth side than bad news on inflation,
the USD strength faded fast.

The AUD, on the other hand,
has been supported by a slightly more hawkish RBA after the latest hot CPI
data and the positive risk sentiment due to the pickup in global growth.

AUDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that AUDUSD fell back below the key 0.6650 zone. The price is now retesting
the support-turned-resistance
and that’s where the sellers will likely step in with a defined risk above the resistance
to position for a drop into the 0.6464 level.

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 0.6870 high.

AUDUSD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price bounced just before the key support at 0.6580 where we had
the confluence of the previous swing low and the
38.2% Fibonacci retracement level. This is going to be the
first target for the sellers with a break below it opening the door for a fall
into the 0.6464 level.

If the price were to get
back into the 0.6580 support, the buyers will likely lean on it to position for
a breakout of the 0.6650 resistance with a better risk to reward setup.

AUDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have the upper limit of the average
daily range (marked by the red line) right at the resistance. Therefore, it’s
unlikely that we will get a breakout today, but this zone will be key in the
next few days.

Upcoming
Catalysts

Tomorrow we get the US Consumer Confidence report where the focus will likely be
on the labour market details. On Thursday, we will see the latest US Jobless
Claims figures. Finally on Friday, we conclude the week with the US PCE report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.