US:
- The Fed left interest rates unchanged as expected at the last meeting.
- The macroeconomic projections were revised higher,
and the Dot Plot showed that the FOMC 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. - The US CPI yesterday beat expectations on the
headline figures, but the core measures came in line with forecasts and the
market’s pricing barely changed. - The labour market remains fairly solid as seen last week with the NFP report
and yesterday’s Jobless Claims. - The ISM Manufacturing PMI beat expectations while the ISM Services PMI came in line with forecasts in another sign that
the US economy remains resilient. - The Fed members continue to cite elevated long-term
yields as a reason to proceed carefully and likely pause in November as well. - The market doesn’t expect the Fed to hike anymore.
Australia:
- The
RBA kept interest rates unchanged as expected as they are seeing inflation
returning to target with the current level of interest rates. - The
latest monthly CPI showed that core inflation is
slowing. - The
labour market is weakening as we got a big miss
in July and the bulk of jobs added in August were part time. - The
Australian Manufacturing PMI fell further into contraction while
the Services PMI jumped back into expansion. - 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
got rejected by the downward minor trendline and sold
off following the US CPI release. We continue to see a big divergence with the
MACD which is
usually a sign of weakening momentum, but the pattern of lower highs might be
an indication that the sellers are still stronger than buyers and that the bias
is skewed to the downside.
AUDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that the price
action in AUDUSD remains a real mess with erratic movements and spikes here and
there. This is what we can expect from rangebound markets, which is why the
best strategy is generally to sit out and wait for a clear fundamental catalyst
before getting back into the market. Yesterday’s US CPI doesn’t look like a
good reason as the pricing on interest rates expectations hasn’t changed as the
core measures came in line with expectations. Nevertheless, in case we see a
pullback, the sellers are likely to lean on the resistance around the
0.6360 level where we can also find the 38.2% Fibonacci retracement level.
AUDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see more
closely the bearish setup around the 0.6360 level. Alternatively, if the
bearish momentum remains strong, the sellers might already pile in on the break
of the recent low at 0.6312. The buyers, on the other hand, are likely to step
in around this low with a defined risk below it to position for a rally into
the trendline and completely erase the US CPI losses.
Upcoming Events
Today the only notable event on the agenda is the
University of Michigan Consumer Sentiment report although it has lost its
market moving ability lately. Only big surprises are likely to have an impact
on the market.
This article was written by FL Contributors at www.forexlive.com. Source