US:
- 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%. - 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.
Australia:
- 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
side. - 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
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 after the
breakout of the May low at 0.6459 the price fell a bit more, but then started
to pull back as the selloff got overstretched. We are now approaching the
broken level again in what could end up being a classic “break and retest”
price action. The sellers are likely to pile in around the level with a defined
risk above to target new lows with the ultimate target being the 0.6168 level.
AUDUSD Technical Analysis –
4 hour Timeframe
On the 4
hour chart, we can see that the price has been diverging with the
MACD for a
while and this is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, we are in fact seeing a pullback into the
broken May low where we can also find the confluence with the
downward trendline and the
38.2% Fibonacci retracement level. A
strong break above such a strong resistance should
give the buyers more conviction to target new highs with the first target
standing at 0.66 handle.
AUDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that the
price is indeed extending into the 0.6459 resistance where we are expecting the
sellers to come into the market more strongly. A break above the resistance, on
the other hand, should change the structure from bearish to bullish and give
the buyers more control. More conservative sellers may want to wait for the
price to break below the counter-trendline before joining the eventual selloff.
Upcoming Events
This week is
pretty empty on the economic data side as we will only have the PMIs tomorrow
and the US Jobless Claims on Thursday. Given the strong appreciation in the US
Dollar seen in the past weeks, we can expect some USD weakness if the data
misses expectations, and we will likely need much stronger than expected
readings to see another sustained rally in the greenback. Remember also that
this is the Jackson Hole Symposium week, so we will hear from many central
bankers including Fed Chair Powell, who is set to speak on Friday.
This article was written by FL Contributors at www.forexlive.com. Source