USD

  • The Fed left interest rates unchanged as expected with basically no change to the statement. The Dot Plot still showed three rate cuts for 2024 and the economic projections were upgraded with growth and inflation higher and the unemployment rate lower.
  • Fed Chair Powell maintained a neutral stance as he said that it was premature to react to the recent inflation data given possible bumps on the way to their 2% target.
  • The US CPI and the US PPI beat expectations for the second consecutive month.
  • The US Jobless Claims beat expectations across the board.
  • The latest US Manufacturing PMI beat expectations while the Services PMI missed slightly. Both the measures remain in expansion though.
  • The market expects the first rate cut in June.

AUD

  • The RBA left interest rates unchanged as expected and finally dropped the tightening bias.
  • The last 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 showed the Manufacturing PMI falling further into contraction while the Services PMI continue to increase and remain in expansion.
  • The market expects the first rate cut in August.

AUDUSD Technical Analysis – Daily Timeframe

AUDUSD Technical Analysis
AUDUSD Daily

On the daily chart, we can see that AUDUSD bounced on the key support zone around the 0.65 handle and rallied strongly into the 0.6623 resistance following the Fed decision before giving it all back the next day. The price is now back at the key support, so we can expect once again the buyers to step in with a defined risk below it to position for a rally into the resistance targeting a breakout. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and increase the bearish bets into the 0.63 handle.

AUDUSD Technical Analysis – 4 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 4 hour

On the 4 hour chart, we can see more closely the recent price action with the pair ranging between the 0.65 support and the 0.6623 resistance. There’s not much else to glean from this timeframe, so we need to zoom in to see some more details.

AUDUSD Technical Analysis – 1 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 1 hour

On the 1 hour chart, we can see that the sellers will have a much better risk to reward setup around the trendline where they will also find the red 21 moving average for confluence. The buyers, on the other hand, will want to see the price breaking above the trendline to invalidate the bearish setup and increase the bullish bets into the resistance.