AUDUSD Technical Analysis – Another opportunity for sellers: The AUDUSD pair tests some key boundaries but eventually gets stuck within the triangle.
Us
- At its most recent meeting, the Fed kept interest rates unchanged, as expected.
- The macroeconomic projections were raised, and the Dot Plot revealed that the FOMC still expects another rate hike by the end of the year, with fewer rate cuts in 2024.
- Fed Chair Powell reaffirmed the Fed’s reliance on data but added that they will proceed with caution.
- The most recent US CPI exceeded expectations on the headline figures, but the core measures were in line with forecasts, and market pricing remained stable.
- The labor market remains fairly resilient, but there are some signs of softening, as evidenced by another miss in Continuing Claims yesterday.
- Positive revisions to the previous figures indicate that the US Retail Sales last week exceeded expectations by a significant margin, indicating that consumer spending is still stable.
- This week’s US PMIs indicated that the economy now appears to be more resilient and balanced.
- Fed Chair Powell and other FOMC members are expected to maintain rate stability in November because they continue to emphasize that the rise in long-term yields is the Fed’s job.
- The market no longer anticipates a rate increase from the Fed.
Australia
- The RBA kept interest rates unchanged, as expected because the current level of interest rates is causing inflation to return to target.
- This week’s CPI report surprised to the upside, prompting the market to price in a higher likelihood of another RBA rate hike in November.
- The labor market continues to deteriorate, as evidenced by last week’s miss in employment change and losses in full-time employment.
- The RBA Governor Bullock downplayed the CPI data beat, prompting the market to reduce rate hike bets.
- The Australian Manufacturing PMI fell further into contraction, while the Services PMI also declined.
- Surprisingly hawkish were the recent RBA Minutes, but as this week has shown, the RBA needs more information before deciding whether to raise interest rates again.
- At their next meeting, the RBA is expected by the market to keep rates unchanged.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that the AUDUSD pair continues to massively diverge from the MACD, which is usually a sign of weakening momentum, which is frequently followed by pullbacks or reversals. In this case, we are still seeing pullbacks into the trendline, but an upside breakout would confirm a reversal and trigger a rally toward the 0.65 handle.
