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USD

  • The Fed left interest rates unchanged as
    expected at the last meeting with a shift in the statement that indicated the
    end of the tightening cycle.
  • The US GDP beat
    expectations by a big margin.
  • The latest US CPI
    slightly beat expectations but analysts expect the Core PCE to print at 0.2%
    M/M again following the CPI data.
  • The labour market continues to soften but remains
    resilient with US Jobless Claims missing
    expectations this week but hovering around cycle lows.
  • The latest US PMIs beat
    expectations by a big margin for both the Manufacturing and Services
    measures.
  • The US Retail Sales beat
    expectations across the board.
  • The University of
    Michigan Consumer Sentiment
    report jumped to the highest
    levels since 2021.
  • The Fed members recently have been pushing
    back on the aggressive rate cuts expectations.
  • The market sees 50/50 chance of a rate cut in
    March.

AUD

  • The
    RBA left interest rates unchanged as expected at the last meeting with
    the central bank maintaining the usual data dependent language.
  • The
    recent Monthly CPI report missed expectations across
    the board which is another welcome development for the RBA.
  • The
    latest labour 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 improved with the Manufacturing
    measure bouncing back into expansion while the Services one remains in
    contraction.
  • The
    market expects the RBA to start cutting rates in Q3.

AUDUSD Technical Analysis –
Daily Timeframe

AUDUSD Daily

On the daily chart, we can see that AUDUSD bounced
on the key support zone
around the 0.65 handle as the price got overstretched on the downside as
depicted by the distance from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move. We indeed got a pullback into the moving
average where the sellers have been piling in for the last few days.

AUDUSD Technical Analysis –
4 hour Timeframe

AUDUSD 4 hour

On the 4 hour chart, we can see that we have a
strong resistance zone around the 0.66 handle as we have the confluence with the
downward trendline and the 38.2% Fibonacci retracement level.
This is where the sellers are piling in with a defined risk above the trendline
to position for a breakout below the key support. The buyers, on the other
hand, will want to see the price breaking above the trendline to invalidate the
bearish setup and position for a rally back into the 0.69 resistance.

AUDUSD Technical Analysis –
1 hour Timeframe

AUDUSD 1 hour

On the 1 hour chart, we can see that the
pair has been consolidating around the 0.66 handle as the buyers and sellers
continue to battle for key breakouts. In fact, a breakout above the downward
trendline should see the sellers folding and the buyers extending the rally
into new highs. Conversely, a breakout below the upward trendline should see
the sellers increasing the bearish bets into the key support and beyond.

Upcoming Events

Today the only notable release will be the US PCE
report.

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