The Fed raised rates by 25 bps as expected and kept everything unchanged. Fed Chair Powell didn’t hint to anything and just reaffirmed their data dependency keeping all the options on the table. The data since the FOMC meeting has been support the soft-landing narrative as the labour market data remained strong and the inflation data missed expectations.
The RBA, on the other hand, 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 data makes their job harder as the Australian Jobs report surprised again to the upside but the Inflation report missed expectations. Nonetheless, they will see more data now before the next meeting and can make a better informed choice.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD has eventually reached the 0.6563 support where we can now expect the buyers stepping in with a tight risk below the level. In fact, the recent selloff got a bit overstretched as depicted by the price distance from the blue 8 moving average. In such instances, we can generally see pullbacks or some consolidation before the next move.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the first target for the buyers should be the resistance at 0.6630 where we can find the previous swing low level, the 38.2% Fibonacci retracement level and the daily blue 8 moving average for confluence. This is also the resistance zone where the sellers are likely to pile in with a defined risk above the level and target a break below the 0.6563 support.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a divergence with the MACD which is generally a sign of weakening momentum often followed by pullbacks or reversals. This setup increases the chances of getting the pullback into the resistance zone, but if it fails and the price falls with conviction below the support, the sellers are likely to pile in and increase the bearish momentum.
Upcoming Events
Today the only notable event will be the US ADP report, which is generally a less reliable report than the NFP, but it can still be market moving. Tomorrow, the market will be focused on the US Jobless Claims and the ISM Services PMI data. On Friday, we will finally see the latest NFP report. Strong data should support the USD, while weak figures are likely to weigh on the greenback in the short-term.
