The USD weakened across the board recently due to a more dovish than expected FOMC decision last week where the Fed decided to signal a bigger QT taper beginning in June and the Fed Chair Powell pushing back repeatedly against rate hike expectations. Moreover, the data on Friday showed that the Fed might indeed just keep rates higher for longer as job and wage growth soften.

The AUD, on the other hand, has been gaining ground against many major currencies following the latest Australian Q1 CPI report where the data beat expectations by a big margin pushing rate cuts expectations further away to Q2 2025 and raising the chances of a rate hike. The RBA today disappointed the hawks as it didn’t add any hawkish language in the statement and the RBA’s Governor Bullock sounded pretty neutral despite repeating the same old message that they are “not ruling anything in or out”.

AUDUSD Technical Analysis – Daily Timeframe

AUDUSD Technical Analysis

On the daily chart, we can see that the key resistance around the 0.6650 level held once again as the RBA disappointed the hawks. We might need a downside surprise in the US CPI report next week to see the AUDUSD pair breaking to the upside and extending the rally into new highs. For now, we remain in kind of a limbo where central banks keep rates higher for longer leading to big ranges across pairs with short term moves inside the ranges triggered by the repricing in expectations.

AUDUSD Technical Analysis – 1 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 1 hour

On the 1 hour chart, we can see that the price broke below the trendline and it’s now near the 0.6577 level as the sellers regained some short term control. If we extend into the 0.6577 level, we can expect the buyers to step in with a defined risk below the level and position for a rally back into the key resistance zone. The sellers, on the other hand, will want to see a clear break to the downside to pile in more aggressively and extend the drop into the 0.6464 swing low.

Upcoming Catalysts

This week is pretty empty on the data front with just the US Jobless Claims on Thursday and the University of Michigan Consumer Sentiment survey on Friday being the only notable releases left. It’s unlikely that they will change the market’s expectations that much though, so the price action might remain tentative heading into the US CPI next week, although the bias might remain generally bullish because of the risk-on sentiment.