Fundamental Overview
The USD rise stalled last week as the US government shutdown delayed many key US economic reports. The dollar “repricing trade” needs strong US data to keep going, especially on the labour market side, so any hiccup on that front is likely to keep weighing on the greenback. The market pricing is now back to 45 bps of easing by year-end and 110 bps by the end of 2026. This could still be too dovish, but we will need strong data to reprice.
In the absence of the government data, an October rate cut is now seen as a done deal. The reality is that an October cut was never really in question. It’s the December cut that could be priced out in case the data strengthens. We still have three NFP and two CPI reports before the December meeting.
On the AUD side, not much has changed in the meantime. The RBA kept everything unchanged at the last meeting with RBA Governor Bullock not offering much in terms of forward guidance other than the usual data dependency and meeting by meeting approach to interest rate decisions. Traders are waiting for the next quarterly CPI report and the employment data. At the moment, the market is pricing 14 bps of easing by year-end and 30 bps cumulatively by the end of 2026.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD pullback stalled at the most recent swing high at 0.6627. This is where the sellers continue to step in with a defined risk above the level to position for a drop back into the 0.6520 low. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the top trendline next.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the pair got stuck in a range between the 0.6575 support and the 0.6627 resistance. Market participants will likely continue to play the range until we get a breakout on either side.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as the sellers will be better off leaning on the resistance or wait for a break lower, while the buyers will have a better risk to reward setup around the support. The red lines define the average daily range for today.
Upcoming Catalysts
On Thursday we have Fed Chair Powell speaking and the US Jobless Claims (if the shutdown is lifted). On Friday, we conclude the week with the University of Michigan Consumer Sentiment report.
