AUDUSD Technical Analysis – The bears are looking to sell the rally

The Fed raised rates by 25 bps as expected and kept everything
unchanged. Fed Chair Powell didn’t hint to anything and just reaffirmed their
data dependency keeping all the options on the table. The data since the FOMC
meeting has been support the soft-landing narrative as the labour market data
remained strong and the inflation data missed expectations.

The RBA, on the other hand,
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 data makes their job harder as the Australian Jobs report surprised again to the upside but
the Inflation report missed expectations. Nonetheless,
they will see more data now before the next meeting and can make a better
informed choice.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that AUDUSD has
eventually reached the 0.6563 support where we
can now expect the buyers stepping in with a tight risk below the level. In
fact, the recent selloff got a bit overstretched as depicted by the price
distance from the blue 8 moving average. In such
instances, we can generally see pullbacks or some consolidation before the next

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the first
target for the buyers should be the resistance at 0.6630 where we can find the
previous swing low level, the 38.2% Fibonacci retracement level
and the daily blue 8 moving average for confluence. This is
also the resistance zone where the sellers are likely to pile in with a defined
risk above the level and target a break below the 0.6563 support.

AUDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have a divergence with
the MACD which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. This setup increases the chances of getting the pullback into the
resistance zone, but if it fails and the price falls with conviction below the
support, the sellers are likely to pile in and increase the bearish momentum.

Upcoming Events

Today the only notable
event will be the US ADP report, which is generally a less reliable report than
the NFP, but it can still be market moving. Tomorrow, the market will be
focused on the US Jobless Claims and the ISM Services PMI data. On Friday, we
will finally see the latest NFP report. Strong data should support the USD,
while weak figures are likely to weigh on the greenback in the short-term.

This article was written by FL Contributors at Source