AUDUSD Technical Analysis – The market awaits a catalyst to break out

June 7, 2024 12:17 pm


The USD has been on the
backfoot since the beat in the US ISM Services PMI where the data showed that the last
month drop was just a blip and overall we have a resilient economy with lower
inflationary pressures.

The data continues to
reinforce the narrative that the next move is more likely to be a rate cut, and
that inflation is likely to keep coming back to target. This could keep
weighing on the greenback as the positive risk sentiment due to the pickup in
global growth is generally a headwind.

The AUD, on the other hand,
has been supported by a slightly more hawkish RBA after the latest hot CPI data and the positive risk sentiment due to
the pickup in global growth. Moreover, the pickup in China’s economy is generally
good news for the Aussie as well as it’s Australia’s biggest trading partner.

Technical Analysis – Daily Timeframe


On the daily chart, we can
see that AUDUSD continues to range around the key resistance
zone at 0.6660. We got multiple failed tries above the resistance as the risk sentiment
has been mixed in the past few weeks. We need a catalyst to trigger a sustained
move and today’s NFP report might do the job.

AUDUSD Technical
Analysis – 4 hour Timeframe

AUDUSD 4 hour

On the 4 hour chart, we can
see more clearly the rangebound price action and it’s unlikely to change until
the US NFP report. From a risk management perspective, the buyers will have a
better risk to reward setup around the 0.66 handle, which could be achieved if today’s
data comes out hot across the board.

The sellers, on the other
hand, will want to see the price breaking below the 0.66 support to gain more
conviction and start targeting new lows.

AUDUSD Technical
Analysis – 1 hour Timeframe

AUDUSD 1 hour

On the 1 hour chart, we can
see that we have the upper limit of the average daily range (marked by the red line) right at
the resistance. Therefore, it’s unlikely that we will get a breakout today, but
the data will likely confirm or deny the generally positive risk sentiment.


Today we conclude the week with the US NFP report where the consensus sees
185K jobs added in May and the unemployment rate remining unchanged at 3.9%.
Moreover, the average hourly earnings are seen at 3.9% for the Y/Y figure and
0.3% for the M/M measure.

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