US:

• The Fed hiked by 25 bps as
  expected and kept everything unchanged at the last meeting.
• Fed Chair Powell reaffirmed their data dependency
  and kept all the options on the table.
• Inflation measures
  since then showed further disinflation.
• The labour market
  displayed signs of softening although it remains fairly solid.
• Overall, the economic data started to surprise to
  the downside lately.
• Last week the ISM Services PMI and Jobless Claims
  surprised to the upside.
• The Fed members are leaning more towards a pause in
  September.
• The market doesn’t expect the Fed to hike at the
  September meeting, but there’s now a 50/50 chance of a hike in November.

Australia:

• The
  RBA kept its cash rate unchanged as widely expected as they are
  seeing signs that the economy is indeed slowing and that will help to return
  inflation back to target.
• The
  data is supporting the RBA’s stance as the Australian jobs, wages and inflation data all missed expectations
  lately.
• The
  Australian PMIs also missed expectations remaining
  in contraction.
• RBA
  Governor Lowe in his speech reaffirmed that if inflation remains sticky, they
  will have to tighten more.
• The
  market expects the RBA to hold rates steady at the next meeting as well.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that AUDUSD seems to
be stuck in a range between the 0.6370 support and the
0.6500 resistance. The recent bounce is getting rejected by the red 21 moving average as the
sellers are stepping in here to position for further downside. A break above
the moving average should lead to a rally into the 0.65 resistance.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we had a divergence with the
MACD recently
which is usually a sign of weakening momentum often followed by pullbacks or
reversals. The target of the pullback should be the 0.66 handle but if the US
data comes out much stronger than expected, then the pair should keep on
dropping and make new lower lows.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have clear levels where the price should react to. A break above the current
resistance around the 0.6440 level should see more buyers piling in to target
the 0.6500 resistance. Another option for the buyers with an even better risk
to reward ratio would be to wait for the price to pull back into the 0.6410
support and position for a rally into the 0.65 resistance with a defined risk
just below the level.

The sellers, on the other hand, are likely
to step in at the 0.6440 resistance with a defined risk above the level to
position for a break below the 0.6410 support and eventually a break below the
0.6370 level.

Upcoming Events

This week we have many important events beginning with
the US CPI tomorrow, which is expected to show an increase in headline
inflation but further disinflation in the core measure. On Thursday, we will
see the latest Australian Jobs report followed by US Jobless Claims, PPI and
Retail Sales data. Finally on Friday, we get the University of Michigan
Consumer Sentiment report.

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