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 NFP report beat expectations on the headline number, but the unemployment rate and the average hourly earnings missed notably.
- The latest US ISM Manufacturing PMI missed expectations by a big margin remaining in contraction with the US ISM Services PMI following suit but holding on in expansion.
- 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 last 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 eventually pulled back from overstretched levels as the price got too far from the blue 8 moving average. In such instances, we can generally see a pullback into the moving average or some consolidation before the next move. In this case, we can expect the buyers to step in around the moving average to position for a rally into new highs.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a support zone around the 0.6590 level where we can find the confluence of the previous swing high level, the 38.2% Fibonacci retracement level and the daily 8 moving average. This is where the buyers will likely step in with a defined risk below the zone to position for new highs. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and position for a drop into the 0.6520 support.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the market now awaiting the US CPI release. The data will likely set the trend for the next few weeks, so watch carefully the market’s reaction at the key levels.
Upcoming Events
Today we have the main event of the week, that is the US CPI report. On Thursday we get the US PPI, the US Retail Sales and the US Jobless Claims figures. On Friday, we conclude the week with the University of Michigan Consumer Sentiment survey.
