Fundamental
Overview
The USD started the week on
the backfoot as the new month begins. The last week’s strength might have been
influenced more by quarter-end flows rather than something fundamental as the
economic data didn’t change interest rates expectations. Nonetheless, the data should
continue to support the risk sentiment amid a pickup in growth without
inflationary pressures.
The AUD, on the other hand,
should be favoured in such environment as it’s also backed by a slightly more
hawkish RBA. Last week, the Aussie got a boost from
another hot monthly CPI report which raised the chances of
a rate hike, although RBA’s
Hauser poured some cold water on the expectations as he would rather hold rates
steady for longer.
AUDUSD
Technical Analysis – Daily Timeframe
AUDUSD Daily
On the daily chart, we can
see that AUDUSD is getting close to the key resistance zone around the 0.6713 level. All
else being equal, the fundamentals are in place for an upside breakout. That’s
what the buyers will want to see to increase the bullish bets into the 0.6870
level next.
The sellers, on the other
hand, will likely step in around the 0.6713 resistance zone with a defined risk
above it to position for a drop back into the bottom of the range at 0.66.
AUDUSD Technical
Analysis – 4 hour Timeframe
AUDUSD 4 hour
On the 4 hour chart, we can
see more clearly the rangebound price action between the 0.67 resistance and
the 0.66 support. These will be the key levels that the market will need to
break to start a more sustained trend. For now, we could keep bouncing around until
we get a clear breakout.
AUDUSD Technical
Analysis – 1 hour Timeframe
AUDUSD Technical Analysis
On the 1 hour chart, we can
see that the recent price action has formed another minor range between the 0.6625
support and the 0.6680 resistance. From a risk management perspective, the
buyers will definitely have a better risk to reward setup around the supports,
while the sellers will want to lean on the resistances.
Nevertheless, if the
price stays above the 0.6680 resistance, the buyers should remain in control and
extend the rally into the 0.6713 resistance. The red lines define the average daily range for today.
Upcoming
Catalysts
This week is full of important events. We begin today with the release of the US
ISM Manufacturing PMI. Tomorrow, we have the US Job Openings and Fed Chair
Powell speaking. On Wednesday, we get the US ADP, the US Jobless Claims, the US
ISM Services PMI and the FOMC Meeting Minutes. Thursday is going to be a US
Holiday for Independence Day. Finally, on Friday, we conclude the week with the
US NFP report.