AUDUSD Technical Analysis – The pair seems to be bottoming out

Fundamental
Overview

The USD has been marginally
weaker recently due to lower than expected US inflation figures last week that
sent Treasury yields lower and made the market to price in higher chances of a
second rate cut by the end of the year.

We’ve also got lots of
whipsaws in the last couple of days caused by tariffs headlines. On Monday, the
greenback weakened across the board following a WSJ report saying that Trump would lay out the
trade vision but won’t impose tariffs yet.

Yesterday, on the other
hand, the US Dollar strengthened as Trump spoke to the media and said that he intends to impose 25% tariffs on Canada and Mexico next week.
Those gains were later erased, but Trump definitely brought more volatility.

On the AUD side, as a
reminder, the RBA softened
further its stance
at the last policy decision as it nears the first rate cut. The market is
seeing a 65% chance of a 25 bps cut in February although the first fully priced
cut is seen in April.

The latest Australian
Employment report came in a touch softer than expected but didn’t change much
in terms of market pricing which was influence more by the recent Australian Monthly CPI that showed core inflation
easing with the Trimmed Mean CPI Y/Y coming in at 3.2%.

AUDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that AUDUSD broke above the major trendline recently and it’s now near a
key swing level at 0.63. The sellers will likely step in around these levels to
position for a drop back into the lows. The buyers, on the other hand, will
want to see the price breaking higher to increase the bullish bets into the
0.65 handle next.

AUDUSD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have now an upward trendline defining the current bullish momentum.
If we get a pullback into it, we can expect the buyers to lean on the trendline
to position for the break above the resistance. 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 that we have a minor support zone around the 0.6250 level. If the price
pulls back, we can expect the buyers to step in there to position for the break
above the resistance, while the sellers will look for a break lower to target
the upward trendline. The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow we get the latest US Jobless Claims figures, while on
Friday we conclude the week with the Flash Australian and US PMIs.

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