Fundamental
Overview
The US Dollar continues to
consolidate around the highs as the market reached the peak in the repricing of
interest rates expectations and it will need stronger reasons to price out the
remaining rate cuts for 2025.
This was signalled by the
lack of US Dollar strength after lots of strong US data with the market’s
pricing remaining largely unchanged around three rate cuts by the end of 2025.
We might see the greenback remaining on the backfoot at least until the US CPI
due next week.
Yesterday, Fed’s Waller and Fed’s Williams sounded like a rate cut in December
is basically a done deal with the plan to slow the pace of rate cuts
considerably in 2025. We will likely need another hot CPI report to force them
to skip the December cut.
On the AUD side, the market
expects just two rate cuts by the RBA next year with the first one fully priced
in for May 2025. The Australian economic data remains solid while inflation
continues to fall slowly keeping the central bank in a neutral stance.
AUDUSD
Technical Analysis – Daily Timeframe
AUDUSD Daily
On the daily chart, we can
see that AUDUSD is stuck in a range between the 0.6440 support and the 0.6540 resistance. The market
participants will likely keep on playing the range until we get a breakout on
either side.
AUDUSD Technical
Analysis – 4 hour Timeframe
AUDUSD 4 hour
On the 4 hour chart, we can
see that we have a very strong resistance zone around the 0.6540 level where we
can also find the major trendline for confluence.
That’s where we can expect
the sellers to step in with a defined risk above the resistance to position for
the continuation of the downtrend. The buyers, on the other hand, will want to
see the price breaking higher to invalidate the bearish setup and position for
a rally into the next resistance at 0.6687.
AUDUSD Technical
Analysis – 1 hour Timeframe
AUDUSD 1 hour
On the 1 hour chart, we can
see that we have a minor upward trendline defining the current pullback into
the resistance. The buyers will likely lean on it to keep pushing higher, while
the sellers will look for a break lower to target a break below the support. The
red lines define the average daily range for today.
Upcoming
Catalysts
Today,
we get the US Job Openings data. Tomorrow, we have the US ADP, the US ISM
Services PMI and Fed Chair Powell speaking. On Thursday, we get the latest US
Jobless Claims figures. Finally, on Friday, we conclude the week with the US
NFP report.