|Day's Range||0.683 - 0.686|
|52 Week Range||0.6672 - 0.7295|
Dear Traders, The AUD/USD is still bearish as long as the price is below M L3 pivot. 0.6853 zone shows sellers and we should see bearish continuation move.
The U.S-China trade war has dampened the Australian economy, as China is a key trading partner for Australia. The Phase One trade accord could weigh on the Australian dollar, as a Chinese commitment to purchase more U.S. goods could come at the expense of Australian exports.
The Australian dollar has gone back and forth during the trading session again on Tuesday, initially breaking down below the recent lows, but has turned around to show signs of life again.
IMF attributes ‘the lion’s share’ of downward revision to ‘more subdued growth forecast’ for India. Asia’s third-largest economy, is expected to grow by 5.8% in 2020, a 1.2 percentage point markdown from the organization’s October forecast.
Based on the early price action and the current price at .6849, the direction of the AUD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the short-term 50% level at .6851.
The pound is subdued on Tuesday, but that could change later in the day, as investors brace for soft employment numbers out of the U.K. (releases at 9:30 GMT).
More stats due out of the UK could test the Pound further this afternoon. Earlier in the day, the BoJ held rates steady.
The Australian dollar initially tried to rally during the trading session on Monday but found trouble at the 200 day EMA. The market has broken down towards the 50 day EMA which of course should show support.
Based on the early price action and the current price at .6874, the direction of the AUD/USD on Monday is likely to be determined by trader reaction to the main 50% level at .6876.
British numbers were dismal last week. On Friday, retail sales declined by 0.6%. The pound is showing signs of weakness, as it has slipped below the symbolic 1.30 level. Is cable headed for further losses?
This week’s price action will be largely controlled in Australia by the Employment Change and Unemployment Rate reports. The results of these reports could determine whether the Reserve Bank of Australia trims their benchmark interest rate in February.
The PBoC left LPRs steady this morning, with some time likely needed to asses the impact of recent cuts and the phase 1 agreement.
Based on Friday’s close at .6872, the direction of the AUD/USD on Monday is likely to be determined by trader reaction to the main 50% level at .6876.
The Aussie and Kiwi were also underpinned by the inking of the trade deal, but domestic economic concerns limited gains as well as increasing chances of central bank rate cuts. Demand for higher-yielding assets drove the Japanese Yen lower.
The Australian dollar went back and forth during the course of the week, trying to break out to the upside but then pulling back. Ultimately, this is a market that will be paying attention to Asia, because that will give Australia its clues.
The Australian dollar continues to be very choppy and noisy right around the 200 day EMA, an area that will cause a lot of attention for longer-term technical traders.
The British pound is steady, but could receive a boost if retail sales delivers a solid gain (release on Friday at 9:30 GMT). The story of the week has been the Chinese yuan, which has climbed to a 7-month high against the U.S. dollar.
With significant downside risks to the global economy turned aside, and worries over a possible recession diminishing, there is a sprouting belief supported by evidentiary proof in the data that global growth could gain momentum over the coming months.