AUDUSD Technical Analysis – Still stuck in a range

US:

• The Fed left interest rates unchanged as
  expected.
• 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 CPI came
  in line with expectations, so the market’s pricing remained roughly the same.
• The labour market
  displayed signs of softening although it remains fairly solid as seen also
  yesterday with the strong beat in Jobless Claims.
• The market doesn’t expect the Fed to hike again at
  the moment.

Australia:

• The
  RBA kept its cash rate unchanged as expected at the last meeting as
  they are seeing signs that the economy is indeed slowing and that will help to
  return inflation back to target.
• The
  data is supporting the RBA’s stance as the Australian jobs, wages and inflation data all remain lacklustre.
• The
  Australian Manufacturing PMI fell further into contraction while
  the Services PMI jumped back into expansion.
• RBA
  Governor Lowe in his speech reaffirmed that if inflation remains sticky, they
  will have to tighten more.
• 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
has eventually reached the upper bound of the range but sold off soon after
following the more hawkish than expected FOMC dot plot. The pair erased over a
week of gains in just a couple of days which might be a hint that the bearish
momentum is strong, and it takes just one good catalyst to make the pair fall
hard.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the pair is
still stuck in the range between the 0.6370 support and the
0.6500 resistance. The price has bounced near the support and it’s now pulling
back into the red 21 moving average where we
have also the confluence with the
50% Fibonacci retracement level.
This is where the sellers should step in again with a defined risk above the
Fibonacci level and target a break below the support.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the bearish setup with the previous lower low acting as resistance now
along with the 50% Fibonacci retracement level. The buyers will want to see the
price breaking above the resistance to invalidate the bearish setup and pile in
for a rally into the 0.6500 level again and aim for a breakout.

Upcoming Events

Today we only have the
US Flash PMIs left as we head to the weekend.