AUD/USD is at risk of a big selloff amid weakening Australia’s data, more hawkish Fed
FUNDAMENTAL OVERVIEW
USD:
The US dollar came under a little bit of pressure yesterday following claims from Al-Arabiya that a US-Iran draft agreement has been reached. It was expected to be announced in a few hours, yet here we are with still nothing concrete from either side and with reports of both parties still engaged in negotiations.
What is more important now is the US data showing resilience and the Fed slowly abandoning the easing bias with more and more policymakers talking about the need of keeping all options on the table, and some explicitly bringing up rate hike possibilities.
That was also signalled in the FOMC meeting minutes. These are generally subtle moves before a pivot in monetary policy. If nothing changes before the June meeting, we might be in for a hawkish surprise.
In the short-term, a resolution and the reopening of the Strait will likely weigh on the greenback on falling oil prices and increased rate cut bets. But if the Strait remains closed for longer and oil prices stay elevated, the risk of the Fed being forced to hike anyway increases.
Today, the focus will be on Fed’s Waller speech on Economic Outlook. The economic outlook speeches generally contain policy signals. Fed's Waller has been a great "leading indicator" for Fed policy in this cycle, and I think the market would react in a big way if he were to change his dovish stance now.
He's been worrying about the labour market, but the data has been pointing to resilient conditions. What is more in tension now is inflation and if he switches his focus back to that, it might be taken as a signal for potential rate hikes.
AUD:
On the AUD side, the RBA recently softened its tone following a rate hike that pushed the cash rate to 4.35% with one dissenter voting for keeping rates unchanged. The meeting minutes and recent remarks from Chief Economist Sarah Hunter indicate that policymakers are increasingly leaning toward a pause as they gauge the economic impact of previous hikes.
A surprise jump in Australia's unemployment rate to 4.5%, the highest level since late 2021, has led traders to scale back expectations of further rate hikes. Markets are now pricing in just one last hike in 2026 which is expected to come in September at the earliest. Australia's Flash PMIs have also showed significantly softer economic activity amid US-Iran conflict and RBA tightening.
AUDUSD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that AUDUSD is consolidating just above the 0.71 handle. We can expect the buyers to keep stepping in around this support with a defined risk below it to keep pushing into new highs. The sellers, on the other hand, will want to see the price breaking lower to position for a drop all the way down to the major trendline around the 0.69 handle.
AUDUSD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see more clearly the consolidation between the 0.7100 support and 0.7180 resistance. Market participants will likely continue to play the range until we get a breakout on either side.
AUDUSD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can see that the recent price action has formed a potential symmetrical triangle. Since it’s forming after a bearish impulse, it might signal the continuation of the bearish momentum, but we will need a downside breakout to confirm it.
More aggressive sellers will likely pile in on the break of the bottom trendline and increase the bearish bets on a break below the 0.71 support. The buyers, on the other hand, will look for a break above the top trendline and increase the bullish bets on a break above the 0.7180 resistance. The red lines define average daily range for today.
UPCOMING CATALYSTS
Today, we have Fed’s Waller delivering a speech on the Economic Outlook.
This article was written by Giuseppe Dellamotta at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
FX初心者には必須 無料のうちにGET！
