The USD weakened across the board last week due to a more dovish than expected FOMC decision, in which the Fed decided to signal a deeper QT cut starting in June and the chair of the Fed Powell repeatedly pushed back on rate hike expectations. Additionally, data released Friday showed the Fed could actually keep rates high for longer as job and wage growth slow.
The AUD gained ground against many major currencies following Australia’s latest Q1 CPI report, where the data comfortably beat expectations, pushing rate cut expectations into the second quarter 2025 and increasing the chances of a rate hike.
AUDUSD Technical Analysis – Daily Time Frame
AUDUSD 1 hour
On the daily chart, we can see that the price has now reached a key resistance zone around the 0.6650 level where the pair has been rejected several times over the past few months. This is where we can expect sellers to step in with a set risk above resistance and position themselves for a fall to new lows. Buyers, on the other hand, will want to see the price collapse to the upside to accumulate with more conviction and start targeting the cycle highs.
AUDUSD Technical Analysis – 1 Hour Timeframe
AUDUSD 1 hour
On the hourly chart we can see that we have a trendline defining the current uptrend on this time frame with a minor support area around the 0.66 handle. If we get a pullback in the trendline, we can expect buyers relying on it to position themselves for a hawkish move from the RBA and target a breakout above the resistance zone . Sellers, on the other hand, will want to see the price drop to start pouring in and increase bearish bets in case the RBA disappoints. A break below the 0.6577 level should technically reverse the trend and pave the way for a fall towards the 0.6465 low.
Upcoming catalysts
This week is rather empty in terms of data as we only have the RBA decision tomorrow, US jobless claims on Thursday and the University of Michigan consumer sentiment survey on Friday being the only ones notable publications. We could see some risk sentiment this week following Friday’s US data, so even if the RBA disappoints, the USD could still remain under pressure.
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