AUDUSD Technical Analysis – Reversal in play?

<p>US:</p><ul><li>The Fed <a href="https://www.forexlive.com/centralbank/federal-reserve-interest-rate-decision-25-bps-rate-hike-to-525-550-20230726/">hiked by 25 bps</a> as
expected and kept everything unchanged.</li><li>Fed Chair Powell reaffirmed their data dependency
and kept all the options on the table.</li><li>The US economic data keeps on surprising to the
upside, but inflation expectations and CPI readings continue to show
disinflation with the last two <a href="https://www.forexlive.com/news/us-june-cpi-02-mm-versus-02-mm-expected-20230810/">Core CPI M/M</a> figures
coming in at 0.16%. </li><li>The <a href="https://www.forexlive.com/news/us-august-sp-global-services-flash-pmi-510-vs-522-expected-20230823/">US PMIs</a> missed
expectations across the board and brought down Treasury yields weakening the US
Dollar, but the <a href="https://www.forexlive.com/news/us-initial-jobless-claims-230k-vs-240k-estimate-20230824/">US Jobless Claims</a> came out
better than expected once again and supported the USD.</li><li>At the moment, the market doesn’t expect another
hike from the Fed, but the next NFP and CPI data will be crucial to confirm or
change this view. </li></ul><p>Australia:</p><ul><li>The
RBA <a href="https://www.forexlive.com/news/forexlive-european-fx-news-wrap-aussie-knocked-lower-by-rba-yen-fall-extends-20230801/">kept its cash rate unchanged</a> with a slight tweak to a line in
the policy statement that suggests that they are leaning more on the dovish
side. </li><li>The
<a href="https://www.forexlive.com/centralbank/rba-minutes-credible-path-back-to-cpi-target-with-cash-rate-staying-at-its-present-level-20230815/">RBA Minutes</a> showed that the central bank indeed
prefers to keep the cash rate steady. </li><li>The
data is supporting the RBA’s stance as the Australian <a href="https://www.forexlive.com/news/australia-july-jobs-146k-vs-15k-expected-jobless-rate-37-vs-35-exp-20230817/">jobs</a>, <a href="https://www.forexlive.com/news/australian-wages-data-for-q2-08-qq-expected-10-20230815/">wages</a> and <a href="https://www.forexlive.com/news/australian-q2-headline-cpi-08-qq-vs-10-expected-20230726/">inflation</a> data all missed expectations. </li><li>The
<a href="https://www.forexlive.com/news/manufacturing-services-australian-preliminary-pmis-for-august-remain-in-contraction-20230822/">Australian PMIs</a> also missed expectations remaining
in contraction. </li><li>The
market expects the RBA to hold the cash rate steady in September.</li></ul><p>AUDUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that AUDUSD rallied
back to retest the broken <a href="https://www.forexlive.com/Education/technical-analysis-polarity-20220408/">support now turned resistance</a> and fell
as the sellers piled in to position for a selloff into the 0.6168 level. The
trend remains firmly bearish as the price continues to print lower lows and
lower highs with the <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving averages</a> being
crossed to the downside.</p><p>AUDUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the pair has
been <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">diverging</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a> for a
while. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, the price broke through a strong
resistance which points more towards a reversal rather than a pullback, but
soon after it got smacked back down into the lows. If the price falls back
below the <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a>, then
the whole upside breakout was a faekout and we should see much lower prices,
but if we bounce strongly from here, the pair might be due for a bigger rally
into the 0.66 handle. </p><p>AUDUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that we
have the price now stuck between the broken counter trendline pointing to more
downside and the broken major trendline pointing to more upside. If the price
bounces and rallies, we can expect the buyers to pile in and start targeting the
0.66 handle. On the other hand, if the price falls below the major trendline,
then we can expect the sellers to jump onboard and ride the bearish wave
towards much lower lows. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">Today</a> the only major
event is Fed Chair Powell’s speech at the Jackson Hole Symposium. The
expectations though are for him to take a “wait and see” approach as we have
more key economic data ahead before the next FOMC meeting. </p>

This article was written by FL Contributors at www.forexlive.com.