As the Fed members continue to stress that further rate hikes are on the cards if the data remains strong, the market has started to price in a more hawkish scenario as the data since the last FOMC meeting kept on surprising to the upside leading to US Dollar strength. A lot will depend on the next NFP and CPI reports, but a July hike seems already baked in and only big misses may change that outcome.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that since tapping into the 0.69 handle, AUDUSD just kept on falling and has almost erased all the rally seen since the beginning of June. Both the buyers and sellers were faked out by the breakouts which shows how uncertain and hard to trade the current market is. The target now should be the 0.6563 support where the buyers are likely to step in to target a rally towards the 0.6781 resistance, while the sellers will want to see a break lower to pile in even more aggressively and look forward to a new low.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that since breaking out of the rising channel and the moving averages crossover, the sellers just kept on piling in aggressively at every pullback. We have the downward trendline and the red 21 moving average acting as resistance and we are likely to see the sellers to step in again here targeting another lower low at the 0.6563 support. The buyers will need a breakout to the upside to find some conviction and start positioning for a rally towards the 0.6781 resistance.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the resistance zone at the trendline where there’s also the 38.2% Fibonacci retracement level and a round 0.6650 number. This zone will be key and the only two scenarios are:
- A break to the upside leading to a rally towards the 0.6781 resistance.
- A rejection leading to a new lower low into the 0.6563 support.
Today, we have the US PCE report and higher than expected figures are likely to lead to US Dollar strength while lower than expected data should weaken the greenback.
