expectations for the first time after 14 consecutive beats, but the inside data
remained solid with the average hourly earnings coming higher than expected,
which is something that the Fed don’t want to see. In fact, the market’s
probability for another 25 bps hike at the July FOMC meeting remained unchanged
at roughly 90%.
The RBA kept its cash rate
unchanged with 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 that they will do what is necessary to achieve that. Central
banks are seeing the end of the hiking cycle so they are guided by the incoming
economic data.
AUDUSD Technical Analysis –
Daily Timeframe
On the daily chart, we can see that after the big
selloff from the 0.69 handle, AUDUSD got stuck in a range between the 0.66 and
0.67 levels. The moving averages have
crossed to the downside but in a rangebound market they can give false signals.
The sellers should keep on piling in around the 0.67 level and the red 21
moving average for another big push to the downside. The buyers, on the other
hand, will need the price to break above the 0.67 handle with conviction to
start targeting the 0.69 resistance.
AUDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see more clearly the
rangebound price action between the 0.66 support and 0.67
resistance. There’s nothing to do here other than waiting for a breakout on
either side supported by a fundamental catalyst and then go with the flow. It’s
highly likely that tomorrow’s US CPI report will provide the breakout, so watch
out for that.
AUDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see how the
moving averages become pretty useless in a rangebound market. More aggressive
traders can “play the range” by buying at support and selling at resistance.
But the two main scenarios are clear:
- A break to the upside should see the
buyers piling in and target the 0.69 handle. - A break to the downside will give the
sellers control and lead to a selloff into the 0.6459 low.
Upcoming Events
The main event of the week is the US CPI report
tomorrow. If we see the data beating expectations, especially on the core
numbers, the USD should strengthen across the board and lead to a big selloff
in the AUDUSD pair. On the other hand, if the data misses expectations, particularly
on the core side, we should see the greenback under pressure and the AUDUSD
pair flying into the 0.69 handle. After the US CPI report, the attention will
switch to the US Jobless Claims on Thursday and the University of Michigan
Consumer Sentiment report on Friday.
This article was written by FL Contributors at www.forexlive.com.