On the daily chart below, we can
see that the bearish trend is healthy in the AUD/USD pair with clean pullbacks
and selloffs. Commodity currencies are sensitive to global growth and risk sentiment,
and this is why we’ve been seeing the US Dollar appreciating the most against
currencies like AUD, NZD and CAD.
We can see that the moving
averages are clearly crossed to the downside and are acting as resistance for
the buyers. The downward trendline is also defining the bearish
trend and the buyers will need a break above it to start getting some
conviction in a trend change.
Recently, the market priced out
hawkish bets on the Fed due to the failure of the Silicon
Valley Bank. This has led to some USD depreciation, but
fundamentally it also means that we may be near the recession, which ultimately
favours the greenback.
On the 4 hour chart below, we can
see that the price has been rejected by the trendline and the 61.8% Fibonacci
retracement level. There may be some long covering before the
US CPI report today. Inflation data today should add to the recent
volatility. A beat to the expected numbers should give the USD a boost and give
the sellers the control to push the price to lower lows. A miss may extend the
USD depreciation and lead to the breakout of the trendline.
On the 1 hour chart below, we can
see that the price has diverged with the MACD right at the resistance at 0.6698 and the Fibonacci
level. This was a signal of a loss of buying momentum and in fact we got a
We can also notice that there may
be a head
and shoulders pattern with the orange trendline as the neckline.
The levels here are defined. If the sellers break below the neckline and the support zone at 0.6630, then we should
see new lower lows coming. If the buyers break above the resistance at 0.6698
and the trendline, then we should see a rally towards the next resistance at
0.6781. Watch out for the CPI report today!