The USD has been
generally under pressure since the benign US CPI report last week as the
hawkish expectations subsided and the market switched its focus from inflation
back to growth. This triggered a positive risk sentiment with risk assets like
stocks and bitcoin gaining ground.

Such an
environment is generally negative for the greenback and positive for commodity
currencies like the AUD which should also be supported by the positive
developments in China and the RBA likely on hold into 2025.

AUDUSD Technical
Analysis – Daily Timeframe

On the daily
chart, we can see that AUDUSD last week finally broke above the key resistance
zone around the 0.6650 level. The price pulled back soon after into the resistance-turned-support
in what could end up being a “break and retest” pattern.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour
chart, we can see that the price is consolidating at the support zone where we
can also find the confluence
of the trendline
and the 50% Fibonacci
retracement level. This is where the buyers are stepping in with a defined
risk below the trendline to position for a rally into the 0.6870 high. The
sellers, on the other hand, will want to see the price breaking lower to regain
control and push the pair into the 0.6579 level.

AUDUSD
Technical Analysis – 1 hour Timeframe

On the 1 hour
chart, we can see that the recent price action has been mostly rangebound as
the market awaits new catalysts to push it in either direction. From a risk
management perspective, the best spot for the buyers to go long would be right
at the support zone as they will have a defined risk just below the trendline
and a great risk to reward setup to target the 0.6870 high. The sellers should
wait for a break below the trendline before considering new short positions.

Upcoming
Catalysts

This week is basically empty on the data front with the only
highlights being the Australian and US PMIs on Thursday.

This article was written by Giuseppe Dellamotta at www.forexlive.com.