AUDUSD outlook: Aussie bounces from new two-year low but upticks seen limited, RBA in focus
(Slobodan Drvenica – Windsor Brokers)
The AUDUSD edges higher in early Monday after 1.2% drop on Friday, when the pair broke below previous low at 0.6828 (May 12) and hit new two-year low at 0.6815.
Friday’s close below 0.6828 low was a bearish signal, though bears face headwinds here and may hold in extended consolidation before resuming.
Technical studies on daily chart are negative and adds to bearish sentiment on global growth worries that continues to hurt risk appetite.
Traders await Tuesday’s RBA policy meeting, with wide expectations for the second consecutive 0.5% hike that will push the rate to 1.35%, as the central bank puts all efforts to curb soaring inflation which is expected to hit 7% this year, with RBA statement expected to remain hawkish.
Focus is also on Fed minutes due on Wednesday, with the US central bank also seen maintaining hawkish stance, with growing expectations for more aggressive action on 0.75% hike.
Upticks face initial resistance at 0.6900 (falling 10DMA) which should ideally cap, while break here would ease downside pressure and open way for test of strong barriers at 0.7000/60 (psychological / base of thick daily cloud) where extended upticks should stall and offer better selling opportunities.
Bears eye initial target at 0.6758 (50% retracement of 0.5509/0.8007, Mar 2020/Feb 2021 rally), violation of which would risk acceleration towards 0.6643 (Jan 2019 spile low) and 0.6463 (Fibo 61.8%).
Res: 0.6871; 0.6900; 0.6964; 0.7000.
Sup: 0.6828; 0.6793; 0.6758; 0.6643.
USDCHF: Daily technical and trading outlook
Trend daily chart
21 HR EMA
55 HR EMA
Trend hourly chart
Easing fm o/bot
13 HR RSI
14 HR DMI
Consolidation with upside bias
0.9689 – Jun 21 high
0.9679 – Jun 23 high
0.9641 – Last Fri’s 1-week high
0.9587 – Last Tue’s top (now sup)
0.9548 – Last Fri’s European low
0.9530 – Last Thur’s low
USD/CHF – 0.9590. Although dlr continued its recent losing streak last week due to active chf-buying n falling U.S. yields, price ratcheted lower to a 2-month trough of 0.9496 Wed n staging a strg bounce to 0.9641 in NY on Fri.
On the bigger picture, dlr’s impressive rise fm Jan’s near 6-year bottom at 0.8758 to 0.9472 on the 1st day of Apr due to rally in U.S. yields suggests erratic fall fm 1.0344 (2016 peak) to retrace LT rise fm 2015 record 0.7360 low has ended n despite subsequent 1-year long monthly sideways swings, dlr’s rally abv 0.9472 in Apr to a near 3-year peak of 1.0064 (May) indicates price would head twd 1.0128. Despite subsequent fall to 0.9546 in May n then rally back to 1.0052 in mid-Jun, dlr’s selloff after SNB’s hawkish rate hike n weakness to 0.9496 last week suggests choppy swings below 1.0064 would continue. Abv 0.9732 would head back twd 0.9847 while below 0.9496 risks 0.9400/05 b4 rebound.
Today, dlr’s strg rise fm 0.9496 to 0.9641 suggests MT 3-legged fall fm May’s near 3-year peak at 1.0064 has made a temp. low n intra-day retreat sig- nals 1st leg of correction over n range trading is seen b4 heading to 0.9679/ 89. Only below 0.9568 (50% r fm 0.9496) risks stronger retrace. to 0.9530/36.