US:
- The Fed left interest rates unchanged as
expected. - The macroeconomic projections were revised higher
as the economy showed much stronger resilience than expected and the Dot Plot
showed that the majority of members still expects another rate hike by the end
of the year with less rate cuts in 2024. - Fed Chair Powell
reaffirmed their data dependency but added that they will proceed carefully as
they are trying to find the optimal level of rates. Powell also added that the
soft landing is not the base case at the moment, although they are aiming for
it. - The latest US CPI came
in line with expectations, so the market’s pricing remained roughly the same. - The labour market
displayed signs of softening although it remains fairly solid as seen also last
week with the strong beat in Jobless Claims. - The market doesn’t expect the Fed to hike again at
the moment.
Australia:
- The
RBA kept its cash rate unchanged as expected at the last meeting as
they are seeing signs that the economy is indeed slowing and that will help to
return inflation back to target. - The
data is supporting the RBA’s stance as the Australian jobs, wages and inflation data all remain lacklustre. - The
Australian Manufacturing PMI fell further into contraction while
the Services PMI jumped back into expansion. - RBA
Governor Lowe in his speech reaffirmed that if inflation remains sticky, they
will have to tighten more. - The
market expects the RBA to hold rates steady at the next meeting as well.
AUDUSD Technical Analysis –
Daily Timeframe
On the daily chart, we can see that the AUDUSD pair
eventually rallied back into the 0.65 resistance and then
sold off following the more hawkish than expected FOMC dot plot. The price
bounced on the support, but it’s now rolling over again as the sellers continue
to be in charge. A break below the support should open the door for a fall into
the 0.62 handle.
AUDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that the recent
bounce got rejected from a broken trendline which
acted as resistance and started to fall again. The moving averages are
crossed to the downside, so the momentum remains bearish, and the natural
target should be the support of the range at 0.6370. That’s where we can expect
the buyers to pile in again with a defined risk below the support to target a
rally into the 0.65 resistance. The sellers, on the other hand, will want to
see the price breaking below the support to pile in even more aggressively and
target the 0.62 handle.
AUDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that the
price got rejected from the downward trendline and the 61.8% Fibonacci
retracement level recently. The trend on this
timeframe is clearly bearish as the price has been printing lower lows and
lower highs. The break below the most recent lower low at 0.6404 suggests that the
sellers are likely to take the pair into the 0.6370 support. On the other hand,
if the price breaks above the trendline, we should see the buyers piling in to
target the 0.65 resistance.
Upcoming Events
Today we will see the latest US Consumer Confidence
report which surprised to the downside the last time and weighed on the USD in
the short term as Treasury yields fell. On Thursday, we will have another US
Jobless Claims data which keeps on showing strength in the labour market
maintaining the hawkish pricing in interest rates expectations. Finally, on
Friday, we will get the latest US PCE data.
This article was written by FL Contributors at www.forexlive.com. Source