Fundamental
Overview
The US CPI yesterday came in line with expectations
leading to a bit of a “sell the fact” reaction in the US Dollar.
The bullish momentum picked
up a bit later though as Fed’s Logan delivered a hawkish comment saying that “models show that Fed funds could
be very close to neutral” basically implying a lot more cautious approach on
rate cuts in 2025.
The market is viewing all
of this in light of the recent US election as Trump’s policies are likely to
spur growth and potentially keep inflation above target for longer, making the
Fed’s job of bringing inflation back to target a bit harder.
AUDUSD
Technical Analysis – Daily Timeframe
AUDUSD Daily
On the daily chart, we can
see that AUDUSD broke through the recent low around the 0.6537 level and
extended the drop into the 0.6460 level as the US Dollar restarted its run on stronger
US data. The natural target should be around the 0.6362 level.
From a risk management
perspective, the sellers will have a better risk to reward setup around the trendline.
The buyers, on the other hand, will want to see the price breaking higher to
start targeting a rally into the top of the yearly range around the 0.69
handle.
AUDUSD Technical
Analysis – 4 hour Timeframe
AUDUSD 4 hour
On the 4 hour chart, we can
see that we have another minor downward trendline defining the current bearish momentum.
If we were to get a pullback, the sellers will likely lean on the trendline with
a defined risk above it to position for a drop into new lows. The buyers, on
the other hand, will want to see the price breaking higher to start targeting a
bigger pullback into the major trendline.
AUDUSD Technical
Analysis – 1 hour Timeframe
AUDUSD 1 hour
On the 1 hour chart, there’s
not much more we can add although we can see that we have a minor resistance
zone around the 0.65 handle. If the price gets there, we can expect the sellers
to pile in for move lower, while the buyers will look for a break higher. The
red lines define the average daily range for today.
Upcoming
Catalysts
Today we have the US PPI and the US Jobless Claims figures. Tomorrow, we
conclude the week with the US Retail Sales data.