AUDUSD Technical Analysis: Pair Reacts to Strong US Data

AUDUSD technical analysis: The pair reacts to strong US data and tests key levels. Traders analyze technical patterns for potential opportunities.

The AUDUSD pair encountered significant movements in response to robust US economic data, witnessing a bounce above a pivotal resistance level before succumbing to selling pressure. The Federal Reserve’s decision to maintain unchanged interest rates and tighter bias alterations influenced market sentiments.

In the US, the Consumer Price Index (CPI) and the Producer Price Index (PPI) surpassed expectations for the second consecutive month. The Non-Farm Payrolls (NFP) report exceeded headline forecasts, although unemployment and average hourly earnings disappointed. The US Jobless Claims also surpassed expectations, alongside a notable positive revision to Continuing Claims. However, the US ISM Manufacturing PMI fell short of expectations, remaining in contraction, while the Services PMI remained in expansion territory. Despite US Retail Sales missing projections, data improved compared to the previous month.

Meanwhile, in Australia, the Reserve Bank of Australia (RBA) maintained interest rates as anticipated, retaining its customary tightening bias and data-dependent stance. The latest Monthly Consumer Price Index (CPI) report missed expectations, a development welcomed by the RBA. However, the latest labor market report significantly undershot forecasts, although the Wage Price Index surprised positively, reflecting robust wage growth. Australian Purchasing Managers’ Index (PMI) data indicated a mixed picture, with Manufacturing PMI slipping into contraction while Services PMI rebounded into expansion.

AUDUSD Technical Analysis: Pair Reacts to Strong US Data

Technical Analysis Overview

Daily Timeframe

• The daily timeframe provides a broader perspective on price movements, capturing longer-term trends and significant support/resistance levels.
• This indicates that AUDUSD briefly breached a significant resistance level of 0.6623 before encountering selling pressure.
• Presently, the price is testing the red 21-day moving average, suggesting a potential area for buyers to intervene for a rally toward previous highs.
• Conversely, a break below key support levels could signal increased bearish momentum.

4-Hour Timeframe

• The 4-hour timeframe offers a more detailed view of price action, suitable for identifying shorter-term trends and potential entry/exit points.
• It highlights a break below the support zone near the 0.6590 level, indicating aggressive selling pressure and targeting the 0.65 handle.
• The price appears overstretched, indicating a need for a pullback or consolidation phase before the next move, potentially forming a break-and-retest pattern.

1-Hour Timeframe

• The 1-hour timeframe provides even finer granularity, which helps refine entry and exit strategies and identify short-term price patterns.
• It identifies a robust resistance zone around 0.6585, where sellers will likely intervene, targeting a decline towards 0.65.
• Buyers anticipate a breakout above this resistance level to initiate a rally towards previous highs, with defined risk positioned above the resistance.

In conclusion, the AUDUSD pair navigates key technical levels amidst shifting market dynamics influenced by US economic data and central bank policies. Traders closely monitor price actions for potential trading opportunities.

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