- The Fed left interest rates unchanged as expected while dropping the tightening bias in the statement but adding a slight pushback against a March rate cut.
- Fed Chair Powell stressed that they want to see more evidence of inflation falling back to target and that a rate cut in March is not their base case.
- The latest US GDP beat expectations by a big margin.
- The US PCE came mostly in line with expectations with the Core 3-month and 6-month annualised rates falling below the Fed’s 2% target.
- The US NFP report beat expectations across the board by a big margin.
- The ISM Manufacturing PMI surprised to the upside with the new orders index, which is considered a leading indicator, jumping back into expansion. Similarly, the ISM Services PMI beat expectations across the board with the employment sub-index erasing the prior drop and prices paid jumping above 60.
- The US Consumer Confidence report came in line with expectations but the labour market details improved considerably.
- The market now expects the first rate cut in May.
- The RBA left interest rates unchanged as expected with the central bank maintaining the usual tightening bias and data dependent language.
- The recent Monthly CPI report missed expectations across the board which was a welcome development for the RBA.
- The latest labour market report missed expectations by a big margin.
- The wage price index surprised to the upside as wage growth in Australia remains strong.
- The latest Australian PMIs improved with the Manufacturing measure bouncing back into expansion while the Services one remains in contraction.
- The market expects the RBA to start cutting rates in August.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD broke through the key support zone around the 0.65 handle and pulled back to retest it before moving lower again. The sellers took advantage of the rally and leant on the blue 8 moving average to position for a drop into new lows. The buyers, on the other hand, will need the price to break above the trendline to invalidate the bearish setup and start targeting new highs.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the recent price action with the pair breaking and retesting the support now turned resistance. The sellers are now leaning on the red 21 moving average, but the overall price action remains rangebound and it might continue to be so until the US CPI report next Tuesday.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price yesterday broke below the counter-trendline and triggered a selloff as the sellers increased their bearish bets. We then got a pullback and now we have another counter-trendline where the buyers will likely lean onto to keep targeting new highs, while the sellers will want to see the price breaking lower to further increase the bearish bets.