US:
- The Fed hiked by 25 bps as expected and kept everything unchanged.
- Fed Chair Powell reaffirmed their data dependency and kept all the options on the table.
- The US economic data keeps on surprising to the upside, but inflation expectations and CPI readings continue to show disinflation with the last two Core CPI M/M figures coming in at 0.16%.
- The US PMIs missed expectations across the board and brought down Treasury yields weakening the US Dollar, but the US Jobless Claims came out better than expected once again and supported the USD.
- At the moment, the market doesn’t expect another hike from the Fed, but the next NFP and CPI data will be crucial to confirm or change this view.
Australia:
- The RBA kept its cash rate unchanged with a slight tweak to a line in the policy statement that suggests that they are leaning more on the dovish side.
- The RBA Minutes showed that the central bank indeed prefers to keep the cash rate steady.
- The data is supporting the RBA’s stance as the Australian jobs, wages and inflation data all missed expectations.
- The Australian PMIs also missed expectations remaining in contraction.
- The market expects the RBA to hold the cash rate steady in September.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD rallied back to retest the broken support now turned resistance and fell as the sellers piled in to position for a selloff into the 0.6168 level. The trend remains firmly bearish as the price continues to print lower lows and lower highs with the moving averages being crossed to the downside.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the pair has been diverging with the MACD for a while. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, the price broke through a strong resistance which points more towards a reversal rather than a pullback, but soon after it got smacked back down into the lows. If the price falls back below the trendline, then the whole upside breakout was a faekout and we should see much lower prices, but if we bounce strongly from here, the pair might be due for a bigger rally into the 0.66 handle.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have the price now stuck between the broken counter trendline pointing to more downside and the broken major trendline pointing to more upside. If the price bounces and rallies, we can expect the buyers to pile in and start targeting the 0.66 handle. On the other hand, if the price falls below the major trendline, then we can expect the sellers to jump onboard and ride the bearish wave towards much lower lows.
Upcoming Events
Today the only major event is Fed Chair Powell’s speech at the Jackson Hole Symposium. The expectations though are for him to take a “wait and see” approach as we have more key economic data ahead before the next FOMC meeting.
