AUDUSD Technical Analysis – We got a “sell the fact” reaction on Trump’s victory
Fundamental OverviewThe US Dollar is now lower across the board as the market erased most of the greenback’s gains following Trump’s victory. This has been a puzzling reaction as Trump’s policies are likely to spur growth and potentially end the Fed’s easing cycle earlier than expected. We can argue that the market was already positioned for a Trump’s victory as we saw the greenback rallying for a couple of weeks leading into the US election. So, this might just be a “sell the fact” reaction and the market might now need more to keep bidding the USD.Another possible explanation is that the market is more focused on global growth now and that’s generally bearish for the greenback. We saw something similar in 2016 when the USD rallied strongly once Trump got elected but after a couple of months, it went into a 2-year long downtrend. The Fed for now remains neutral and on track to keep cutting rates. Yesterday, they cut by 25 bps as expected and given the overall neutral message, the market expects another 25 bps cut in December. Strong data from now until the December meeting though could change their plans for 2025. We have the US CPI report next week and that’s going to be a test. If the US Dollar sells off on hot data, then the market might be indeed focusing on global growth rather than the potential for an earlier pause in the Fed’s easing cycle. AUDUSD Technical Analysis – Daily TimeframeOn the daily chart, we can see that AUDUSD spiked to a new low as Trump got elected President but eventually reversed course and rallied into a new high. We have a key level around 0.6622. The buyers will likely step in there with a defined risk below the level to position for a rally into new highs. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop into the 0.64 handle.AUDUSD Technical Analysis – 4 hour TimeframeOn the 4 hour chart, we can see that the price is reacting to the key level as we got the first rejection. There’s not much more we can add here as the buyers will look for a bounce, while the sellers will look for a break lower.AUDUSD Technical Analysis – 1 hour TimeframeOn the 1 hour chart, we can see that at the moment we have a downward trend on this timeframe. The buyers will want to see the price breaking above the most recent lower high around the 0.6660 level to increase the bullish bets into new highs. The red lines define the average daily range for today. Upcoming CatalystsToday we conclude the week with the University of Michigan Consumer Sentiment report. This article was written by Giuseppe Dellamotta at www.forexlive.com.
Fundamental Overview
The US Dollar is now lower across the board as the market erased most of the greenback’s gains following Trump’s victory. This has been a puzzling reaction as Trump’s policies are likely to spur growth and potentially end the Fed’s easing cycle earlier than expected.
We can argue that the market was already positioned for a Trump’s victory as we saw the greenback rallying for a couple of weeks leading into the US election. So, this might just be a “sell the fact” reaction and the market might now need more to keep bidding the USD.
Another possible explanation is that the market is more focused on global growth now and that’s generally bearish for the greenback. We saw something similar in 2016 when the USD rallied strongly once Trump got elected but after a couple of months, it went into a 2-year long downtrend.
The Fed for now remains neutral and on track to keep cutting rates. Yesterday, they cut by 25 bps as expected and given the overall neutral message, the market expects another 25 bps cut in December. Strong data from now until the December meeting though could change their plans for 2025.
We have the US CPI report next week and that’s going to be a test. If the US Dollar sells off on hot data, then the market might be indeed focusing on global growth rather than the potential for an earlier pause in the Fed’s easing cycle.
AUDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that AUDUSD spiked to a new low as Trump got elected President but eventually reversed course and rallied into a new high. We have a key level around 0.6622. The buyers will likely step in there with a defined risk below the level to position for a rally into new highs. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop into the 0.64 handle.
AUDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is reacting to the key level as we got the first rejection. There’s not much more we can add here as the buyers will look for a bounce, while the sellers will look for a break lower.
AUDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that at the moment we have a downward trend on this timeframe. The buyers will want to see the price breaking above the most recent lower high around the 0.6660 level to increase the bullish bets into new highs. The red lines define the average daily range for today.
Upcoming Catalysts
Today we conclude the week with the University of Michigan Consumer Sentiment report. This article was written by Giuseppe Dellamotta at www.forexlive.com.
