USD
- The Fed left interest rates unchanged as expected at the last meeting and dropped the tightening bias in the statement.
- The US PCE came in line with expectations.
- The US Jobless Claims missed expectations although the data is still in the recent ranges.
- The latest US ISM Manufacturing PMI missed expectations by a big margin.
- The US Consumer Confidence missed expectations across the board.
- The market expects the first rate cut in June.
AUD
- The RBA left interest rates unchanged as expected with the central bank maintaining the usual tightening bias and data dependent language.
- The recent Monthly CPI report missed expectations across the board which was a welcome development for the RBA.
- The latest labour market report missed expectations by a big margin.
- The wage price index surprised to the upside as wage growth in Australia remains strong.
- The latest Australian PMIs showed the Manufacturing PMI falling back into contraction while the Services PMI jumped back into expansion.
- The market expects the first rate cut in August.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD is now falling back below the key support zone around the 0.6520 level. This is opening the door for a drop into the lows around the 0.6272 level with the sellers now looking to sell the rallies at key levels. There’s not much else we can glean from this chart, so we need to zoom in to see some more details.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that this latest leg lower is diverging with the MACD which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we might get a pullback into the trendline where the sellers will look to short from with a defined risk above it and target the 0.6272 level. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and position for a rally into the 0.6623 level.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the pair erasing all of the gains from the miss in the US ISM Manufacturing PMI. If the bearish momentum remains strong, we can expect the sellers to lean on the support turned resistance at 0.6490 to target new lows. The buyers, on the other hand, will want to see the price breaking higher to pile in and target the trendline around the 0.6510 level.
Upcoming Events
This week we have lots of important events on the agenda with the release of the US labour market data and the Fed Chair Powell testifying to Congress. We begin today with the US ISM Services PMI. Tomorrow, we have the US ADP, the US Job Openings and the Fed Chair Powell speaking. On Thursday, we get the latest US Jobless Claims figures, while on Friday we conclude the week with the US NFP report.
