US

• The Fed left interest rates unchanged as expected at the last meeting.
• The macroeconomic projections were revised higher,
  and the Dot Plot showed that the FOMC still expects another rate hike by the
  end of the year with less rate cuts projected in 2024.
• Fed Chair Powell reaffirmed their data dependency but added that
  they will proceed carefully.
• The recent US CPI beat expectations on the headline
  figures, but the core measures came in line with forecasts and the market’s
  pricing barely changed.
• The labour market remains pretty resilient but there are some signs
  of softness as seen yesterday with another miss in Continuing Claims.
• The US Retail Sales last week beat expectations by a big
  margin with positive revisions to the prior figures, suggesting the consumers’
  spending is still solid.
• The US PMIs this week showed that the economy now
  looks more balanced and resilient.
• Fed Chair Powelland other FOMC members continue to highlight the rise in long term yields as doing
  the job for the Fed and therefore they are expected to keep rates steady in
  November as well.
• The market doesn’t expect the Fed to hike anymore.

Australia

• The
  RBA kept interest rates unchanged as expected as they are seeing inflation
  returning to target with the current level of interest rates.
• The
  CPI report this week surprised to the upside
  prompting the market to price in a higher chance of another rate hike from the
  RBA in November.
• The
  labour market continues to weaken as seen also
  last week with the miss in the employment change and the losses in full-time
  employment.
• The
  RBA Governor Bullock downplayed the beat in the CPI data
  and made the market to pare back the rate hike bets.
• The
  Australian Manufacturing PMI fell further into contraction with
  the Services PMI plummeting back into contraction as well.
• The
  recent RBA Minutes were surprisingly hawkish but as we
  have seen this week, the RBA needs more data before deciding on another rate
  hike.
• 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 the AUDUSD pair
continues to massively diverge with the
MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we continue to just get the pullbacks into the trendline but
watch out for an upside breakout as it should confirm a reversal and trigger a
rally towards the 0.65 handle.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we got not
one, but two fakeouts in just two trading days. The price action remains messy
and erratic within the descending triangle and the
only possible levels to lean on are the trendline and the support around
the 0.6285 level. In fact, we can expect the sellers to step in again around
the trendline where we can also find the 61.8% Fibonacci retracement level
for confluence. The
buyers, on the other hand, will want to see a break above the trendline to pile
in and position for a rally back into the 0.65 handle.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
trend on this timeframe is bullish as the price continues to print higher highs
and higher lows with the moving averages being
crossed to the upside. More aggressive buyers might lean on the minor upward
trendline, where we have also the red 21 moving average for confluence, to
position for a break above the major trendline with a better risk to reward
ratio. The sellers, on the other hand, will want to see the price breaking
below the minor trendline to increase the bearish bets into the 0.6285 support,
ultimately targeting a breakout.

Upcoming Events

Todaywe will get the US PCE report which is unlikely
to change anything for the Fed at this point in time.

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