expect two or more rate hikes this year if the economic data remains strong as
Fed Chair Powell has also reiterated at the ECB forum last week. In fact, the
data has been consistently surprising to the upside since the last FOMC meeting
and that led to a more hawkish market’s pricing.
The RBA decided to keep its
cash rate unchanged today accompanied by the usual hawkish comments and the
promise of doing more if the data suggests so. They repeated their
determination of bringing the inflation rate to target and will do what is
necessary to achieve that.
AUDUSD Technical Analysis –
Daily Timeframe
On the daily chart, we can see that since the tap
into the 0.69 handle, AUDUSD sold off pretty heavily with almost no pullbacks
into the 0.66 handle where we got a bounce. The price is now probably pulling
back as the selloff overstretched. We should start to see sellers piling back
in shortly as the price is approaching resistances like the moving averages and previous
swing points.
AUDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that the divergence with the
MACD was
already signalling a loss of bearish momentum and what follows is generally a
pullback or a reversal. In this case, the price broke out of the trendline,
consolidated a bit and now we are likely to see an extension to the 0.67 handle
where we can find the previous swing high level and the 38.2% Fibonacci retracement level of
the entire selloff since 0.69.
AUDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that the
price found a strong support at the
0.6640 level and bounced from it after the downward spike after the RBA’s
decision. We should now see a rally towards the 0.6710 resistance. The sellers
are likely to step in there with a defined risk above the resistance zone and
target the 0.6563 support. Alternatively, if the price breaks the 0.6640
support without getting first to the 0.6710 resistance, the sellers should pile
in anyway and ride the bearish wave after the breakout. The buyers, on the
other hand, should pile in even more aggressively if the price breaks above the
0.6720 level.
Upcoming Events
Today the US is on
holiday for Independence Day, so the we see a choppy price action or nothing at
all as liquidity is thinner. Nonetheless, we’ll have some important economic
releases in the following days like the US Jobless Claims and the ISM Services
PMI on Thursday and the main event of the week: the US NFP on Friday.
This article was written by FL Contributors at www.forexlive.com.