AUDUSD Technical Analysis – The bearish bias remains intact

The AUDUSD resumes its fall as the US data remains

The Fed raised rates by 25 bps as expected and kept the policy
statement unchanged. The market was eager to see if the Fed Chair Powell could
offer some forward guidance but got disappointed as he just reaffirmed their
data dependency. Yesterday, the US Jobless Claims beat expectations across the board
by a big margin giving the US Dollar a boost.

The RBA, on the other hand,
kept its cash rate unchanged with the usual hawkish comments and the promise of
doing more if the data suggests so. In fact, the recent RBA meeting minutes showed that there was a strong case
for a rate hike but the central bank decided that holding steady was a better
choice and they will reconsider at the August meeting. The data makes their job
harder as the Australian Jobs report surprised again to the upside but
the Inflation report missed expectations.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that AUDUSD has been
falling pretty hard since rejecting the 0.69 resistance. The
price has broken below many key support levels and the natural target now
should be the 0.6563 level.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have a
strong resistance level now around the 0.67 handle where we can find the 38.2% Fibonacci retracement level
and the blue 8 moving average for confluence. The
sellers are likely to lean on this resistance with a defined risk above and
target the 0.6563 support. The buyers, on the other hand, will want to see the
price breaking above the resistance to pile in and target the 0.69 handle.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the bearish setup but if the selling momentum remains strong and the
economic data today surprises, we might see the sellers leaning already on the
black trendline. The
buyers should nevertheless wait for the break above the resistance to have more

Upcoming Events

Today the market will
be focused on the US PCE and ECI reports. Given that the PCE is less timely
than the CPI and the market is already looking forward to the next CPI, only a
big upside surprise in the data can be market moving. In fact, it’s more likely
that the market will pay closer attention to the ECI as the Fed is focused on
the wages data. A higher-than-expected figure should be bullish for the US
Dollar, while a lower-than-expected one should weigh on the greenback in the
short term.

This article was written by FL Contributors at Source