- The Fed left interest rates unchanged as expected with a shift in the statement that
indicated the end of the tightening cycle. - The Summary of Economic Projections showed a
downward revision to Growth and Core PCE in 2024 while the Unemployment Rate
was left unchanged. Moreover, the Dot Plot was revised to show three rate cuts
in 2024 compared to just two in the last projection. - Fed Chair Powell didn’t push back against the strong dovish pricing
and even said that they are focused on not making the mistake of holding rates
high for too long, which implies a rate cut coming soon. - The US CPI this week came in line with expectations
with the disinflationary progress continuing steady. This was also confirmed by
the US PPI the day after where the data missed
estimates. - The labour market has been showing signs of
weakening lately but we got some strong releases recently with the US Jobless Claims and the NFP coming
in strongly. - The latest ISM Manufacturing PMI missed expectations falling further into
contraction, while the ISM Services PMI beat forecasts holding on in expansion. - The market expects the Fed to start cutting rates
in Q1 2024.
AUD
- The
RBA left interest rates unchanged as expected at the last meeting with
the central bank maintaining the usual data dependent language. - The
recent Monthly CPI report missed expectations across
the board which is a welcome development for the RBA. - The
RBA Governor Bullock has been leaning on a more hawkish side recently, although
she remains optimistic on the future outlook. - The
latest labour market report beat forecasts across the
board although the unemployment rate rose more than expected. - The
wage price index surprised to the upside as wage
growth in Australia remains strong. - The
recent Australian PMIs fell further into contraction for
both the Manufacturing and Services sectors. - The
market expects the RBA to start cutting rates in Q4 2024.
AUDUSD Technical Analysis –
Daily Timeframe
On the daily chart, we can see that AUDUSD recently
broke above the key trendline
following the surprisingly dovish FOMC meeting. This has opened the door for a
rally into the 0.68 resistance where we
can expect the sellers to step in with a defined risk above the level to target
a drop back into the 0.65 support.
AUDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that the pair
started to consolidate just above the recent high at the 0.6680 level. This is
where the buyers are piling in with a defined risk below the level to position
for another rally into the 0.68 handle. The sellers, on the other hand, will
want to see the price breaking lower to invalidate the bullish setup and
position for a drop into the 0.65 support.
AUDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see more
closely the rangebound price action between the 0.6680 support and the 0.6730
resistance. This gives us a clear playbook as a break to the upside should lead
to a rally into the 0.68 handle, while a break to the downside could trigger a
selloff into the 0.65 support.
Upcoming Events
Today the only notable event on the agenda is the
release of the US PMIs.
This article was written by FL Contributors at www.forexlive.com.