The dollar weakened as last week’s FOMC decision, in which the Fed decided to signal an expansion of QT taper starting in June, was more dovish than expected, and Fed Chairman Jerome Powell repeatedly rallied against expectations for rate hikes. There has been a general decline recently. Additionally, Friday’s data showed that the Fed may indeed keep interest rates high for an extended period of time as job and wage growth slows.
Meanwhile, the Australian dollar has strengthened against a number of major currencies following the latest Australian Q1 CPI report, with data coming in much better than expected and pushing interest rate cut expectations further away until Q2 2025. The possibility of interest rate hikes has increased. The RBA disappointed hawks today by not including any hawkish language in its statement, despite RBA President Bullock repeating the same old message that “nothing is ruled out”. , took a fairly neutral attitude.
AUDUSD Technical Analysis – Daily Timeframe
australian dollar dollar daily
On the daily chart, we can see that the major resistance around the 0.6650 level has once again held as the RBA has disappointed the hawkish expectations. A downside surprise in next week’s US Consumer Price Index (CPI) report may be needed for the AUD/USD to break higher and extend its gains to new highs. For now, we’re in a sort of deadlock where central banks keep interest rates high for long periods of time, resulting in large ranges between the pairs and, in the short term, re-pricing of expectations that can lead to range-bound movements. It will move.
AUDUSD Technical Analysis – 1 hour timeframe
Australian dollar usd 1 hour
On the hourly chart, we can see that the price has broken below the trend line and is currently sitting near the 0.6577 level as sellers have regained short-term control. If it extends to the 0.6577 level, we would expect buyers to intervene with a clear risk of falling below that level and positioning for a pullback to the key resistance zone. On the other hand, sellers would like to see a clear break to the downside in order to accumulate more aggressively and extend the decline to the swing low of 0.6464.
Future catalyst
This week has been pretty empty on the data front, with the only notable announcements being Thursday’s U.S. unemployment claims and Friday’s University of Michigan Consumer Sentiment Survey. However, price trends may remain tentative heading into next week’s US Consumer Price Index as market expectations are unlikely to change much, but overall bullish bias due to risk-on sentiment. may continue.
