Fundamental
Overview
The USD hasn’t done much
since the FOMC decision as the market awaits something new to push into either
direction. The Fed delivered on expectations with no surprises whatsoever. The
central bank kept rates steady, reduced the QT pace, revised growth lower and
inflation higher, and kept the dot plot mostly unchanged.
Fed Chair Powell
acknowledged the current uncertainty around Trump’s policies and the inflation
outlook but confirmed that the economy remains healthy, and the Fed is in a
good position to wait for more clarity.
The only noteworthy comment
was the dismissal of the rise in the long-term inflation expectations in the
University of Michigan Consumer Sentiment survey as he labelled it as an
outlier given that other metrics show long term expectations stable or even slightly
lower.
On the AUD side, the Australian
Employment report today was much weaker than expected and weighed on the
Aussie Dollar. The market pricing didn’t change much though as the market
continues to expect around 64 bps of easing by year end compared to 60 bps before
the data.
AUDUSD
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that AUDUSD couldn’t extend the recent rally above the 0.64 handle. The
buyers will want to see the price breaking to a new high to start targeting the
0.65 handle next. For now, there’s not much we can glean from this timeframe as
the pair continues to mostly range.
AUDUSD Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that we had an upward trendline
defining the bullish momentum. As the price broke below the trendline, the
sellers piled in for a drop into the 0.6270 level. The buyers, on the other
hand, will look to buy the dip around the 0.6270 level with a defined risk
below the level to position for a rally into the 0.65 handle next.
AUDUSD Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see that we have a minor downward trendline defining the current pullback into
the 0.6270 support zone. If the price rallies into the trendline, we can expect
the sellers to lean on it to position for the drop into the 0.6270 support with
a better risk to reward setup. The buyers, on the other hand, will look for a
break higher to start targeting new highs. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims
figures.
This article was written by Giuseppe Dellamotta at www.forexlive.com.