On the daily chart below, we can see that the ADUUSD pair has finally broken out of the 3-month long range it’s been stuck in since the Silicon Valley Bank collapse. The big USD strength came from stronger than expected US economic data that made the market to reprice interest rates expectations on the hawkish side.
There’s a feeling that the Fed may need to get to 6% FFR before really pausing as the data has shown data that the economy is not weak enough to bring inflation back to the 2% target. The price has recently pulled back to the broken support turned resistance in what looks like a retest before a continuation to the downside.
AUDUSD Technical Analysis
On the 4 hour chart below, we can see that AUDUSD pulled back last week into the 0.6563 resistance where we also find the confluence from the trendline and the 38.2% Fibonacci retracement level. This will be a key resistance zone and the buyers will need the price to break above it before getting the conviction for a rally towards the 0.66 handle or beyond. The sellers, on the other hand, will lean on this resistance with a defined risk above it to target a break below the recent low and then the 0.63 handle.
On the 1 hour chart below, we can see that right now we have this consolidation beneath the 0.6563 resistance. As previously mentioned, the buyers will need a break above the strong resistance zone and the trendline to target new higher highs as at the moment the technicals and the fundamentals are skewed heavily to the downside.
If the sellers missed the short from the resistance, we may see more of them coming in once the price breaks below the 0.65 swing low. The main event of this week is the US NFP report and the market may even trade into it given the strong labour market data we got up to now. Nevertheless, higher than expected figures should support the USD, while lower than expected readings should weaken the greenback.
