US:
- The Fed left interest rates unchanged as
expected at the last meeting. - 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 Core PCE
came
in line with expectations with disinflation continuing steady. - The labour market
displayed signs of softening although it remains fairly solid as seen also with
another strong beat in Jobless Claims
yesterday and with the beat in Job Openings. - 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 miss in the ADP report led to
some USD weakness which might continue if the NFP data misses forecasts. - The market doesn’t expect the Fed to hike again at
the moment.
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
recently broke out of the range and pulled back into the broken support now turned resistance which
might end up in a classic “break and retest” pattern. This is where the sellers
should step in with a defined risk above the resistance to
target the 0.6168 level.
AUDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that we have also
the 38.2% Fibonacci retracement level
for confluence and the
price is indeed reacting to the resistance as we already got a double
rejection, which might end up in a double top pattern.
The buyers will want to see the price breaking higher to invalidate the bearish
setup and position for a rally back into the 0.6500 resistance.
AUDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that we
have a trendline that
should confirm the bearish setup in case the price breaks below it. In fact, we
can expect more sellers to pile in on a break while the buyers should fold,
ultimately increasing the bearish momentum. The buyers, on the other hand, are
likely to lean on the trendline to position for a rally into the 0.65
resistance.
Upcoming Events
Today it’s all about the NFP report which is the only one the Fed will
see before its next rate decision. The US jobs data going into the NFP was
strong, so the expectations might be skewed to the upside.
This article was written by FL Contributors at www.forexlive.com. Source