Fundamental
Overview
Since last Friday, the USD
has been mostly weak as Fed Chair Powell delivered a more dovish than expected speech at the Jackson Hole Symposium where
he basically kept the door open for a 50 bps cut at the September meeting. In
fact, the line saying that they will do everything they can to support a strong
labour market was key.
That pushed Treasury yields
lower and weighed on the greenback across the board. In fact, the recent
appreciation of the AUD has been mostly driven by the US Dollar side of the equation,
but it outperformed its peers due to the hawkish RBA stance.
Today, we got the monthly Australian
CPI report where the data showed further easing in the underlying inflation
measures which is going to be good news for the RBA. The market expects the
central bank to cut rates by 25 bps in December.
AUDUSD
Technical Analysis – Daily Timeframe
AUDUSD Daily
On the daily chart, we can
see that AUDUSD probed above the 0.68 handle tonight following the Australian
CPI data but failed to keep the gains as the details in the report showed an
easing in underlying inflation.
We can expect the sellers
to step in around these levels with a defined risk above the 0.68 handle to
position for a drop into the 0.67 handle. The buyers, on the other hand, will
want to see the price breaking higher to increase the bullish bets into the
0.6870 high.
AUDUSD Technical
Analysis – 4 hour Timeframe
AUDUSD 4 hour
On the 4 hour chart, we can
see that we have a trendline defining the current bullish
momentum. We can expect the buyers to lean on it with a defined risk below it
to position for a break above the 0.68 handle and a rally into the 0.6870 high.
The sellers, on the other hand, will want to see the price breaking lower to increase
the bearish bets into the 0.67 handle.
AUDUSD Technical
Analysis – 1 hour Timeframe
AUDUSD 1 hour
On the 1 hour chart, there’s
not much else we can glean from this timeframe other than waiting for a reaction
around the key levels where the buyers will look for a bounce on the trendline
and a break above the resistance,
while the sellers will look for a break below the trendline and a drop into the
0.67 handle. The red lines define the average daily range for today.
Upcoming
Catalysts
Tomorrow we get the latest US Jobless Claims figures, while on Friday, we
conclude the week with the US PCE report.