AUDUSD Technical Analysis – Reversal in play?


  • The Fed hiked by 25 bps as
    expected and kept everything unchanged.
  • Fed Chair Powell reaffirmed their data dependency
    and kept all the options on the table.
  • The US economic data keeps on surprising to the
    upside, but 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 and brought down Treasury yields weakening the US
    Dollar, but the US Jobless Claims came out
    better than expected once again and supported the USD.
  • At the moment, the market doesn’t expect another
    hike from the Fed, but the next NFP and CPI data will be crucial to confirm or
    change this view.


  • 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 rallied
back to retest the broken support now turned resistance and fell
as the sellers piled in to position for a selloff into the 0.6168 level. The
trend remains firmly bearish as the price continues to print lower lows and
lower highs with the moving averages being
crossed to the downside.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the pair has
been diverging with the
MACD for a
while. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, the price broke through a strong
resistance which points more towards a reversal rather than a pullback, but
soon after it got smacked back down into the lows. If the price falls back
below the trendline, then
the whole upside breakout was a faekout and we should see much lower prices,
but if we bounce strongly from here, the pair might be due for a bigger rally
into the 0.66 handle.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have the price now stuck between the broken counter trendline pointing to more
downside and the broken major trendline pointing to more upside. If the price
bounces and rallies, we can expect the buyers to pile in and start targeting the
0.66 handle. On the other hand, if the price falls below the major trendline,
then we can expect the sellers to jump onboard and ride the bearish wave
towards much lower lows.

Upcoming Events

Today the only major
event is Fed Chair Powell’s speech at the Jackson Hole Symposium. The
expectations though are for him to take a “wait and see” approach as we have
more key economic data ahead before the next FOMC meeting.

This article was written by FL Contributors at Source