AUDUSD Technical Analysis – The AUD stays under pressure amid growth concerns

Fundamental Overview

The USD is losing ground against the major currencies as the market continues to price in more easing by the end of the year. The market is now expecting three rate cuts by the end of the year which is in stark contrast to just one seen a couple of weeks ago.

The US data recently started to miss expectations by a big margin and the market reacted by adjusting its growth expectations. The Trump’s tariffs policy is also weighing on growth expectations increasing the likelihood of faster Fed easing down the road.

One constraint the Fed might have could come from higher inflation expectations. In case we get a slowdown, the Fed might not be fast enough in cutting rates amid inflation remaining above target and uncomfortably high long-term inflation expectations. This is something to keep in mind in light of the next NFP and CPI reports.

On the AUD side, the RBA cut interest rates by 25 bps as expected recently bringing the Cash Rate to 4.10% but it was accompanied by a more hawkish than expected guidance. After the rate decision, we got a strong Australian Employment report and last week the monthly Trimmed-Mean CPI ticked higher to 2.8% remaining near the upper bound of the 2-3% target range. Nonetheless, the AUD came under pressure amid the Trump’s tariffs threats and general risk-off flows.

AUDUSD Technical Analysis – Daily Timeframe

On the daily chart, we can see that AUDUSD fell all the way back to the yearly lows. This is where we can expect the buyers to step in to position for a rally back into the highs. The sellers, on the other hand, will want to see the price breaking below the 0.6170 level to increase the bearish bets into new lows.

AUDUSD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a downward trendline defining the bearish momentum. The sellers will likely lean on the trendline to keep pushing into new lows, while the buyers will look for a break above the trendline and the 0.6254 level to regain conviction and position for a rally back into the highs.

AUDUSD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s not much we can add here as the sellers will look for a rejection from the trendline, while the buyers will look for a break above it. The red lines define the average daily range for today.

Upcoming Catalysts

Today the market participants will be on the lookout for tariffs headlines as they go into effect for Canada, Mexico and China. Tomorrow, we have the US ADP and the US ISM Services PMI. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report.