USD
- The Fed left interest rates unchanged as
expected with basically no change to the statement. - Fed Chair Powell stressed
once again that they are proceeding carefully as the full effects of policy
tightening have yet to be felt. - The recent US CPI missed
expectations across the board bringing the expectations for rate cuts
forward. - The labour market is
starting to show weakness as Continuing Claims are now
rising at a fast pace and the recent NFP report
missed across the board. - The US Consumer
Confidence and University of
Michigan Consumer Sentiment continue to fall. - The latest US ISM
Manufacturing PMI missed expectations by a big margin,
followed by a disappointing ISM Services PMI,
although the latter remained in expansion. - The recent US Retail Sales beat
expectations, while the US PPI missed
forecasts by a big margin. - The recent Fedspeak has been leaning on
the hawkish side, but last week’s inflation report pretty much confirmed that
the Fed might be done for the cycle. - The market doesn’t
expect the Fed to hike anymore.
AUD
- The
RBA raised the cash rate by 25 bps as expected as the central bank
judged that the move was warranted to be more assured that inflation would
return to target in a reasonable timeframe. - The
CPI report recently surprised to the upside
prompting the market to price in a higher chance of another rate hike from the
RBA in November, which is what we eventually got. - The
RBA Governor Bullock has been leaning on a more hawkish side recently, but the
central bank remains optimistic on the future outlook. - The
labour market continues to weaken as seen also
recently with the bulk of jobs added being part-time. - The
wage price index surprised to the upside as wage
growth in Australia remains strong. - The
recent Australian Manufacturing PMI fell further into contraction with
the Services PMI plummeting back into contraction as well. - The
RBA Meeting Minutes released today were more hawkish
than expected and showed that the central bank is now more worried about
inflation expectations getting out of hand. - The
market expects the RBA to hold rates steady at the next meeting.
AUDUSD Technical Analysis –
Daily Timeframe
On the daily chart, we can see that AUDUSD finally
broke above the key 0.65 resistance and
extended the rally towards the 0.66 handle. The next target for the buyers
should now be the major trendline around
the 0.6650 level where we can also find the 61.8% Fibonacci retracement level.
That’s where we can expect the sellers to step in more aggressively with a
defined risk above the trendline.
AUDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see more closely the
breakout but we can also notice the divergence with the
MACD. This is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we could see a pullback into the broken resistance now turned support where
the buyers will have a better risk to reward setup to target the major
trendline. The sellers, on the other hand, will want to see the price falling
back below the 0.65 level to pile in and target the lows.
AUDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that the
breakout of the descending
triangle led to an increase in the bullish momentum which was
enough to finally break above the key resistance zone. More aggressive buyers
continue to lean on the red 21 moving average but
from a risk management perspective, the trendline offers a better risk to
reward opportunity.
Upcoming Events
This week is pretty empty on the data front with the US
on holiday for Thanksgiving Day in the final part of the week. Today, we have
the FOMC Meeting Minutes but it’s unlikely to be market moving given that it’s
three-weeks old data. Tomorrow, we have the US Jobless Claims report which is
probably going to be the most important release of the week. On Thursday, we
have the Australian PMIs while on Friday we conclude the week with the latest
US PMIs.
This article was written by FL Contributors at www.forexlive.com.