AUDUSD Technical Analysis

USD

• The Fed left interest rates unchanged as
  expected at the last meeting and dropped the tightening bias in the statement.
• The US CPI and
  the US PPI beat
  expectations for the second consecutive month.
• The NFP report beat
  expectations on the headline number, but the unemployment rate and the average
  hourly earnings missed notably. Moreover, the US Jobless Claims beat
  expectations across the board with a big positive revision to Continuing
  Claims.
• The latest US ISM
  Manufacturing PMI missed expectations by a big margin
  remaining in contraction with the US ISM Services
  PMI
  following suit but holding on in expansion.
• The US Retail Sales missed
  expectations across the board although the data improved from the prior month.
• The market sees basically a 50/50 chance of a hike
  in June now.

AUD

• The
  RBA left interest rates unchanged as expected and finally dropped the
  tightening bias.
• The
  last Monthly CPI report missed expectations across
  the board which was a welcome development for the RBA.
• The
  latest labour market report missed expectations by a big
  margin.
• The
  wage price index surprised to the upside as wage
  growth in Australia remains strong.
• The
  latest Australian PMIs showed the Manufacturing PMI falling
  back into contraction while the Services PMI jumped back into expansion.
• The
  market expects the first rate cut in August.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that AUDUSD fell all
the way back to the key support zone
around the 0.65 handle with the latest selloff coming after the RBA dropped the
tightening bias. This is where we can expect the buyers to step in with a
defined risk below the support to position for a rally back into the highs. The
sellers, on the other hand, will want to see the price breaking lower to
increase the bearish bets into the 0.63 handle.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have now a trendline where we
can also find the red 21 moving average for confluence. If we
were to get a pullback from here, we can expect the sellers to lean on the
trendline with a defined risk above it to position for the break below the
support with a better risk to reward setup. The buyers, on the other hand, will
want to see the price breaking higher to invalidate the bearish setup and
increase the bullish bets into the highs.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
latest leg lower is diverging with
the MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it might be a signal for a pullback into the trendline
where we can also find the Fibonacci
retracement levels for extra confluence.

Upcoming Events

Tomorrow we have the FOMC rate decision on the agenda
where the central bank is expected to keep rates unchanged. On Thursday, we get
the Australian PMIs and jobs data, while later in the day we will see the
latest US PMIs and Jobless Claims figures.

This article was written by FL Contributors at www.forexlive.com.