Fundamental Overview
The USD continues to consolidate around the highs except against the commodity currencies where it’s been having the upper hand. The US inflation data last week was once again a disappointment although the data that feeds into the Core PCE was overall benign as forecasters expect a 0.13% M/M increase.
Nonetheless, the
Treasury yields continue to climb and are now back around the post-US election highs. There’s some understandable uneasiness in the bond market given the hot US data and the Fed continuing to cut into an accelerating economy.
On the AUD side, the
RBA kept the cash rate unchanged at the last policy decision but toned down further its language as we slowly move towards the first rate cut in 2025. The Australian
labour market report recently came out much better than expected which decreased the probabilities for the first cut in February to 64%. The first cut is fully priced in for April.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD is challenging the 2024 lows around the 0.6340 level. The sellers will likely keep on piling in around these levels to extend the drop into the 0.6267 level next. The buyers, on the other hand, will need a break above the
trendline to regain control and start targeting the 0.65 handle next.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the sellers will have a better risk to reward setup around the major trendline. The buyers, on the other hand, will likely step in around the 2024 lows to position for a pullback into the trendline and target a break above it.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor resistance zone around the 0.6380 level where the price got rejected from several times in the past days. The sellers will likely lean on that resistance to position for new lows, while the buyers will look for a break higher to increase the bullish bets into the major trendline. The red lines define the
average daily range for today.
Upcoming Catalysts
Today, we get the US Retail Sales data. Tomorrow, we have the FOMC Policy Decision. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US PCE data.
This article was written by Giuseppe Dellamotta at
www.forexlive.com.
