AUDUSD Technical Analysis – We are back at the key resistance zone

Fundamental
Overview

The USD has come under
strong pressure recently as the weaker US data finally triggered a deeper
pullback in the greenback from the stretched long positions accumulated in the
past two quarters. The market pricing switched pretty fast from expecting just
one cut a couple of weeks ago to three now.

The main event this week is
the US CPI report. Higher than expected data will likely give the greenback a
boost in the short term as markets pare back their rate cuts expectations.
Conversely, a soft report could see more weakness for the US Dollar ahead of
the FOMC decision next week.

On the AUD side, the Aussie
Dollar has been under some pressure recently amid the Trump’s tariffs threats
and general risk-off flows. On the domestic front, the RBA cut interest rates by 25 bps as expected at the last
meeting bringing the Cash Rate to 4.10% but it was accompanied by a more
hawkish than expected guidance.

After the rate decision, we
got a strong Australian Employment report and the monthly Trimmed-Mean CPI ticked higher to 2.8% remaining
near the upper bound of the 2-3% target range.

AUDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that AUDUSD bounced around the 0.62 handle and rallied back into the key
0.6350 resistance. This is where we can expect the
sellers to step in with a defined risk above the resistance to position for
another drop 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.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor support around the 0.6250 level. If we get a pullback
into it, we can expect the buyers to step in with a defined risk below the
level 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 upward trendline defining the current pullback into
the resistance. The buyers will likely continue to lean on the trendline to
push into new highs, while the sellers will look for a break lower to increase
the bearish bets into the 0.6250 level next. The red lines define the average daily range for today.

Upcoming Catalysts

Today we have the NYFed Consumer Inflation
Expectations. Tomorrow, we get the US Job Openings data. On Wednesday, we have
the US CPI report. On Thursday, we get the US PPI data and the US Jobless
Claims figures. On Friday, we conclude the week with the University of Michigan
Consumer Sentiment report.

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