AUDUSD Technical Analysis

Feb 24

The Fed left interest rates unchanged as expected at the last meeting while dropping the tightening bias in the statement but adding a slight pushback against a March rate cut.

• The US CPI beat expectations for the second consecutive month with the disinflationary trend reversing.
  
• The US PPI beat expectations across the board by a big margin.
  
• The US Jobless Claims beat expectations with the data remaining steady.
  
• The latest US PMIs increased further from the prior month with the Manufacturing PMI beating expectations and the Services PMI missing.
  
• The US Retail Sales missed expectations across the board by a big margin.
  
• The market now expects the first rate cut in June.
  

AUD
The RBA left interest rates unchanged as expected with the central bank maintaining the usual tightening bias and data-dependent language. The recent Monthly CPI report missed expectations across the board which was a welcome development for the RBA.
The latest labor market report missed expectations by a big margin. The wage price index surprised to the upside as wage growth in Australia remains strong. The latest Australian PMIs showed the Manufacturing PMI falling back into contraction while the Services PMI jumped back into expansion. The market expects the first rate cut in August.

AUDUSD Technical Analysis 1-Day Timeframe
On the daily chart, we can see that AUDUSD broke above the key resistance level where we had also the red 21 moving average for confluence and extended the rally to new highs. The buyers are targeting the next resistance at 0.6623 but the momentum seems to be waning a bit. The sellers, on the other hand, will likely wait for the price to reach the 0.6620 level before piling in for new shorts or looking for some key breakouts on the lower timeframes.

AUDUSD Technical Analysis 4-hour Timeframe
On the 4-hour chart, we can see that the price has been diverging with the MACD recently. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we got pullbacks into the red 21 moving average where the buyers kept on stepping in to target the 0.6620 level. The moving average and the black trendline will now be key levels for the sellers as they will need to break through them to gain more conviction for a bearish trend and target new lows.

AUDUSD Technical Analysis 1-hour Timeframe
Timeframe On the 1-hour chart, we can see that we have a resistance zone around the 0.6580 level which the buyers will need to break to increase the bullish bets into the 0.6620 level. There is no important data till next Tuesday, so the market will likely be driven by the technicals until then.
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