AUDUSD Technical Analysis – The pair is at a key resistance ahead of the RBA

The USD weakened across the board last week due to a more dovish than
expected FOMC decision where the Fed decided to signal a bigger QT taper
beginning in June and the Fed Chair Powell pushed back repeatedly
against rate hike expectations. Moreover, the data on Friday showed that the Fed might indeed just keep rates higher for longer as job and wage growth soften.

The AUD has been gaining ground against many major currencies following the latest Australian Q1 CPI report where the data beat expectations by a big margin pushing rate cuts expectations further away to Q2 2025 and raising the chances of a rate hike.

AUDUSD Technical Analysis – Daily Timeframe

On the daily chart, we can see that the price has now reached a key resistance zone around the 0.6650 level where the pair got rejected several times in the past few months. This is where we can expect the sellers to step in with a defined risk above the resistance and position for a drop into new lows. The buyers, on the other hand, will want to see the price breaking to the upside to pile in with more conviction and start targeting the cycle highs.

AUDUSD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a trendline defining the current uptrend on this timeframe with a minor support zone around the 0.66 handle. If we get a pullback into the trendline, we can expect the buyers leaning on it to position for a hawkish RBA decision and targeting a break above the resistance zone. The sellers, on the other hand, will want to see the price breaking lower to start piling in and increase the bearish bets in case the RBA disappoints. A break below the 0.6577 level should technically reverse the trend and open up room for a drop into the 0.6465 swing low.

Upcoming Catalysts

This week is pretty bare on the data front as we have just the RBA decision tomorrow, the
US Jobless Claims on Thursday and the University of Michigan Consumer Sentiment
survey on Friday being the only notable releases. We might see some risk-on sentiment this week following the US data on Friday, so even if the RBA disappoints, the USD could still remain under pressure.

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