AUD/USD bulls are defending a key area of support ahead of important US events

• AUD/USD is pressured in the open vs bullish technicals.
• The bears are moving in but the price is primed for a rally.
• The Jackson Hole and US data will take precedent. 

AUD/USD is flat in the Tokyo open around 0.69 the figure, stuck in a 12 pip range so far. The US dollar has been pushed and pulled by sentiment surrounding the US economy and the Federal Reserve. The US dollar gave up some gains later in the US session on Wednesday into the London fix which enabled the Aussie firm early in the day, although the price melted thereafter and has consolidated.

Due to the less inflationary data, Fed funds futures traders are pricing in a 59% chance that the Fed will hike rates by another 75 basis points at its September meeting, and a 41% probability of a 50 basis points increase as traders get set for the Jackson Hole. Before then, we have Thursday's US Gross Domestic Product, Initial Jobless Claims and Personal Consumption Expenditures will be key ahead of the speech by Fed chair Powell at 10.00 ET Friday. 

In the past, the Fed has used this symposium to announce or hint at policy shifts. However, analysts at Brown Brothers Harriman argued that they do not think the Fed will paint itself into a corner ahead of the September 20-21 FOMC meeting. ''Rather, we expect the Fed to try and manage market expectations by maintaining the hawkish message it has perfected since the July FOMC meeting. The Fed will also have a better idea of how the economy is doing in Q3''

"The dollar's still well bid and I think that the market's concluding that these data are not going to change the Fed's position about what's going to happen next month," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

"While the market might be swinging back and forth between inflation and recession, the central banks aren't. They are focused, it seems to be nearly exclusively, on inflation," Chandler said.

Going forward Australian growth is set to slow

Analysts at Rabobank noted that the Reserve Bank of Australia forecasts growth at 3¼ per cent over 2022, underpinned by growth in consumption and a recovery in investment and service exports. ''Growth is then expected to slow to around 1¾ per cent over both 2023 and 2024. This outlook compares favourably with the Eurozone, UK and the US all of which are at risk of recession next year.  We had anticipated a pullback to AUD/USD0.69 on the back of dollar strength.  We continue to see scope for AUD/USD to clamber back to 0.71 on a 6-month view.''

AUD/USD technical analysis

The Gartley pattern is a bullish feature on the hourly chart and bulls eye a structure target that meets the 78.6% Fibonacci retracement of the current corrective range between recent highs and lows of 0.6965 and 0.6880. The prior structure also aligns with this target as being the 0.6945/50 area on the chart. The resistance until there are 0.6912, 0.6922 and 0.6931.