AUD/USD ANALYSIS & TALKING POINTS
- All eyes on Fed Chair Jerome Powell today.
- RBA and Fed guidance diverging?
- Golden cross the focus on the daily AUD/USD chart.
AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP
The Australian dollar remains on the backfoot this Thursday morning after Fed Chair Jerome Powell’s hawkish first day Testimony before Congress. That being said, the Fed’s Bostic pushed for rates to remain on hold for the rest of 2023 and may be on of the two doves revealed in the revised 2023 Dot Plot revision chart. The recent divergence between the two central banks with the Reserve Bank of Australia (RBA) minutes slightly more dovish than the Fed, may be contributing to AUD weakness. In addition, there is still a disconnect between the Fed’s guidance and money market pricing in terms of rate hike expectations and upcoming economic data next week should provide some valuable input as a gauge to determine how rates may unfold.
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Today’s schedule is centered firmly around the US dollar with initial jobless claims, Fed speak and Fed Chair Powell’s second day of Testimony.
AUD/USD ECONOMIC CALENDAR (GMT +02:00)
Source: DailyFX economic calendar
TECHNICAL ANALYSIS
AUD/USD DAILY CHART
Chart prepared by Warren Venketas, IG
Daily AUD/USD price action continue on the short-term downtrend after Aussie bulls failed to break above the long-term trendline (black) for the second time coinciding with an overbought signal via the Relative Strength Index (RSI). There is unlikely to be too much volatility prior to Mr. Powell’s Testimony but the golden cross potential is still very much in play and could result in another AUD rally.
Key resistance levels:
- 0.6900
- Trendline resistance
- 0.6856
- 0.6800
Key support levels:
- 0.6772
- 0.6700/50- day MA (blue)
- 200-day MA (yellow)
IG CLIENT SENTIMENT DATA: BEARISH
IGCS shows retail traders are currently net LONG on AUD/USD, with 53% of traders currently holding long positions. At DailyFX we typically take a contrarian view to crowd sentiment resulting in a short-term downside disposition.
Contact and followWarrenon Twitter:@WVenketas
