AUDUSD Technical Analysis – Awaiting the NFP


  • The Fed hiked by 25 bps as
    expected and kept everything unchanged at the last meeting.
  • Inflation expectations and CPI readings continue to
    show disinflation with the last two Core CPI M/M figures
    coming in at 0.16%.
  • The US PMIs missed
    expectations across the board last week.
  • Fed Chair Powell’s speech at the Jackson Hole Symposium was
    mostly in line with what he said previously but he stressed on the need to be
    careful going forward and that continued strength in the labour market may
    require further rate hikes.
  • The first half of the week saw US Job Openings and Consumer Confidence reports
    missing expectations by a big margin, followed by a miss in the US ADP data and
    a beat in the US Jobless Claims.
  • The market doesn’t expect another hike from the Fed
    anymore, but a lot will depend on the data going forward.


  • The
    RBA kept its cash rate unchanged with a slight tweak to a line in
    the policy statement that suggests that they are leaning more on the dovish
  • The
    RBA Minutes showed that the central bank indeed
    prefers to keep the cash rate steady.
  • The
    data is supporting the RBA’s stance as the Australian jobs, wages and inflation data all missed expectations.
  • The
    Australian PMIs also missed expectations remaining
    in contraction.
  • The
    market expects the RBA to hold the cash rate steady in September.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that AUDUSD is
bottoming out around the 0.64 handle and the price is now both above the resistance and the
red 21 moving average. This
might be an early sign of a bigger correction to the upside to come with the
0.66 handle as the first target. On the other hand, a fall below the support may
end up leaving behind a fakeout and trigger a selloff.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we had a divergence with the
MACD prior to
the breakout of the trendline. This is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, given the break of the trendline, the chances of a
reversal are higher, and the target should be the 0.66 handle. We can see that
the buyers are already stepping in around the 0.6459 support and the red 21
moving average to position for a rally into the resistance.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
0.6459 support has been quite strong as the price reacted to it multiple times
and it’s now bouncing off of it. The price action formed a descending
pattern and generally a breakout on either side leads
to a strong and sustained move. So, if the price breaks to the upside, we can
expect the buyers to pile in and target the 0.66 resistance. Vice versa, if the
price breaks through the support, the sellers will jump in and extend the fall
into new lows.

Upcoming Events

Today the market will
be focused on the main release of the week: the US NFP report. We will also
have the US ISM Manufacturing PMI an hour and a half later, but the labour
market data is the priority right now. A bad reading is likely to weaken the US
Dollar in the short term, but if the data is really bad, the market may start
to fear the recession and the greenback should come back soon after. A good
reading is likely to be linked with the soft-landing scenario and might be
bearish for the USD as well. Overall, it’s a mixed picture at the moment as the
Fed is expected to pause at the September meeting and we might get much worse
economic data before the next meeting in November.

This article was written by FL Contributors at Source