Fundamental Overview
The USD has been marginally weaker recently due to lower than expected US inflation figures last week that sent Treasury yields lower and made the market to price in higher chances of a second rate cut by the end of the year.
We’ve also got lots of whipsaws in the last couple of days caused by tariffs headlines. On Monday, the greenback weakened across the board following a
WSJ report saying that Trump would lay out the trade vision but won’t impose tariffs yet.
Yesterday, on the other hand, the US Dollar strengthened as Trump spoke to the media and said that
he intends to impose 25% tariffs on Canada and Mexico next week. Those gains were later erased, but Trump definitely brought more volatility.
On the AUD side, as a reminder, the RBA
softened further its stance at the last policy decision as it nears the first rate cut. The market is seeing a 65% chance of a 25 bps cut in February although the first fully priced cut is seen in April.
The latest Australian Employment report came in a touch softer than expected but didn’t change much in terms of market pricing which was influence more by the recent
Australian Monthly CPI that showed core inflation easing with the Trimmed Mean CPI Y/Y coming in at 3.2%.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD broke above the major
trendline recently and it’s now near a key swing level at 0.63. The sellers will likely step in around these levels to position for a drop back into the lows. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 0.65 handle next.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have now an upward trendline defining the current bullish momentum. If we get a pullback into it, we can expect the buyers to lean on the trendline to position for the break above the resistance. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor
support zone around the 0.6250 level. If the price pulls back, we can expect the buyers to step in there to position for the break above the resistance, while the sellers will look for a break lower to target the upward trendline. 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 Flash Australian and US PMIs.
This article was written by Giuseppe Dellamotta at
www.forexlive.com.
