AUDUSD Technical Analysis

USD

• The Fed left interest rates unchanged as expected at the last meeting with basically no
  change to the statement. The Dot Plot still showed three rate cuts for 2024 and
  the economic projections were upgraded with growth and inflation higher and the
  unemployment rate lower.
• Fed Chair Powell maintained a neutral stance as he said that it was
  premature to react to the recent inflation data given possible bumps on the way
  to their 2% target.
• The US CPI and the US PPI beat expectations for the second
  consecutive month.
• The US Jobless Claims yesterday missed expectations slightly
  although Continuing Claims improved.
• The US ISM Manufacturing PMI beat expectations by a big margin with
  the prices component continuing to increase, while the US ISM Services PMI missed with the price index dropping to
  the lowest level in 4 years.
• The US Consumer Confidence missed expectations although the labour
  market details improved.
• The market still expects the first cut in June, but
  the probability stands at just 60%.

AUD

• The
  RBA left interest rates unchanged as expected at the last meeting and
  finally dropped the tightening bias.
• The
  last Monthly CPI report came in line with
  expectations although the underlying inflation measure increased from the prior
  month.
• 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
  further into contraction while the Services PMI continue to increase and remain
  in expansion.
• The
  market expects the first rate cut in August.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that AUDUSD eventually
bounced around the key 0.65 support zone and
rallied all the way back to the key resistance at 0.6623. The sellers stepped
in with a defined risk above the resistance to position for a drop into the
lows. The buyers, on the other hand, will want to see the price breaking higher
to start targeting the next resistance around the 0.69 handle.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that as soon as the
price broke out of the falling channel, the buyers piled in strongly supported
by the disappointing US ISM Services PMI and pushed the price back into the
resistance. We now have a strong support zone around the 0.6560 level where we
can find the confluence of the
previous swing high level, the red 21 moving average and the
38.2% Fibonacci retracement level.
This is where the buyers stepped in with a defined risk below the support to
position for a rally into the resistance targeting a breakout. 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 – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the bounce today on the support zone. We now
have some resistance around the 0.6590 level where we can find the confluence
of the red 21 moving average and the 50% Fibonacci retracement level. This is
where the sellers might step in with a defined risk above the Fibonacci level
to position for a break below the 0.6560 support with a better risk to reward
setup. A lot will depend on the US NFP report today as strong data across the
board will likely trigger a strong selloff in the pair.

Upcoming Events

Today we conclude the week with the US NFP report.

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