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AUDUSD technical analysis – Breakout or fakeout?

Fundamental Overview

Yesterday, the dollar weakened generally following a favorable US CPI report whose data was in line with expectations. The market has confirmed its expectations for rate cuts, with September and December now fully priced in. As a result, we have seen a general sense of risk appetite and, barring any negative surprises in the coming days and weeks, this trend could expand further.

The AUD, on the other hand, has been under a bit of pressure following Australian labor market data this evening, but this may just be a dip buying opportunity for bulls as risk sentiment and General weakness in the US dollar should support the pair towards new highs.

AUDUSD Technical Analysis – Daily Timeline

AUDUSD Daily

On the daily chart, we can see that AUDUSD yesterday finally broke above the key resistance zone around the 0.6650 level following the US CPI report. The technical trend remains bullish as price continues to print higher highs and higher lows.

Support from the benign US CPI readings and breakout should see buyers pile in to position themselves for a rally towards the 0.6870 level. A break below the trendline should invalidate the bullish scenario and see sellers take control.

AUDUSD Technical Analysis – 1 Hour Timeframe

AUDUSD 1 hour

On the hourly chart we can see that the price has pulled back this evening following the disappointing Australian jobs data. We are now close to the minor trend line and resistance turned support. This is where buyers will likely pile in with a defined risk below the support zone and position themselves for a rally towards the 0.6870 level.

Sellers, on the other hand, will want to see the price break below support to start intervening and increasing bearish bets in case the price falls below the main trendline around the 0.66 handle.

Upcoming catalysts

Today, the US jobless claims numbers will take center stage as the market will want to see if last week’s numbers were the start of a trend or just a blip.

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