AUDUSD Technical Analysis – The pair bounced from the key support

Fundamental
Overview

The USD remains on the
backfoot as the US data continues to point to resilient growth with falling
inflation. Yesterday, we got a good US
Retail Sales report suggesting that the stories of deteriorating consumer
spending have been exaggerated. Overall, this should support the soft-landing
narrative and be positive for the risk sentiment.

The AUD, on the other hand,
keeps on gaining against the US Dollar mainly because of the risk-on sentiment.
This morning we’ve been seeing even more weakness for the greenback which might
be due to the selloff in the USDJPY pair as flows there could have spilled over
into other markets.

On the monetary policy
front, the Aussie remains supported on the back of a hawkish RBA given the
sticky inflation. The next key event will be the Australian Q2 CPI report on
July 31st.

AUDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that AUDUSD pulled back into the support around the 0.6713 level and bounced off of it
as the buyers stepped in to position for the continuation of the uptrend. The
sellers will need the price to fall back below the 0.6713 level to regain some
control and position for a drop into the 0.66 handle next.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the bounce from the support level and the increase in momentum
this morning amid general US Dollar weakness.There’s not much else that we can glean from this timeframe, so we need to zoom in further to see some more details.

AUDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price has reached a key resistance around the 0.6750 level where
the price got rejected from several times in the past weeks. The buyers will
want to see the price breaking higher to increase the bullish bets into new
highs.

The sellers, on the other
hand, will likely step in around this level to position for a break below the
0.6713 level with a better risk to reward setup. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have Fed’s Waller speaking, while tomorrow we conclude with the
Australian Labour Market report and the latest US Jobless Claims figures.

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