AUDUSD TECHS: Approaching A Key Support Zone

• RES 4: 0.6723 High Oct 21 ‘24   
• RES 3: 0.6707 High Sep 17 and a key resistance 
• RES 2: 0.6660 High Sep 18
• RES 1: 0.6654 High Dec 12
• PRICE: 0.6648 @ 16:36 GMT Dec 10 
• SUP 1: 0.6580/6559 High Nov 13 / 20-day EMA 
• SUP 2: 0.6517 Low Nov 27 
• SUP 3: 0.6466/21 Low Nov 26 / 21 
• SUP 4: 0.6415 Low Aug 21 / 22 and a bear trigger 

A strong impulsive bull wave in AUDUSD remains intact, signalling scope for a continuation near-term. Note that moving average studies have recently crossed and are in a bull-mode position, reinforcing current conditions. The pair has pierced 0.6640, 76.4% of the Sep 17 - Nov 21 bear leg. A clear breach of this level would open 0.6707, the Sep 17 high and key resistance. Key support to watch is at 0.6559, 20-day EMA.

• As the FOMC press conference progressed, negative sentiment towards the dollar has re-emerged, with the USD index extending session lows and now down a little more than 0.5%. Gains across the G10 have been broad based and are certainly more balanced than earlier on Wednesday.
• This dynamic has propelled the likes of EUR, AUD and NZD to fresh recovery highs, while the Japanese Yen has been eroding the week’s advance with USDJPY now trading back below the 156.00 handle. GBPUSD is also pressing towards 1.34, while the Swiss Franc and Swedish krona remain the day’s best performers.
• For EURUSD, spot is testing the 1.17 handle for the first time since October 17, keeping the technical bull cycle intact. The recent breach of key short-term resistance at 1.1656, the Nov 13 high and a bull trigger, and today’s extension higher strengthens the underlying bullish sentiment. 1.1728 and 1.1779 represent the next levels on the topside.
• AUDUSD has notably risen above the September 18 high of 0.6660, extending the impressive surge from the November lows to 4.12% amid the more hawkish RBA and firmer risk sentiment. A strong impulsive bull wave in AUDUSD remains intact, signalling scope for a continuation near-term. 0.6707 remains a key resistance point, the September 17 high.
• In similar vein, NZDUSD has extended above pivot resistance at 0.5800, registering a 0.5825 high on Wednesday, while USDSEK (-1.12%) has significantly narrowed the gap to recent cycle lows at 9.1936. A break below here would place the pair at the lowest level since February 2022.

• Powell won't comment on what the impact would be of the Supreme Court striking down tariffs ("It would depend on a whole bunch of things we don't know.")
• Asked why we aren't hearing about even more cuts from the Fed in the economic environment that he is describing, Powell responds: "The risk is that tariff inflation just turns out to be more and more persistent... I think the other possibility is, less likely, and that is just that the labor market gets tight, or the economy gets tight. And you see, just traditional inflation. I don't see that as particularly likely, but ... again, all across the Committee, people see the picture pretty similarly, but see the risks quite differently. And some people do see the inflation risk. And I wouldn't dismiss that case. But you've got to make an assessment, and this is the assessment."
• Asked about his upcoming final 3 meetings as Fed chair and his legacy: "I really want to turn this job over to whoever replaces me with the economy in really good shape... I want inflation to be under control, coming back down to 2%. And I want the labor market to be strong."
• He won't say whether he has plans to stay on the Board of Governors after his term as Chair expires next May.