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AUD/USD slips to 2-week low ahead of CPIThe Australian dollar has plunged on Tuesday. AUD/USD is trading at 0.6632, down 0.95% on the day. The Aussie is under strong downward pressure, having lost around 1.7% since Thursday. Australia releases inflation on a quarterly basis, which magnifies the impact of the release. Inflation has been falling and this trend is expected to continue in the Wednesday release of first-quarter CPI. The headline figure is expected to fall from 7.8% to 6.9% y/y and from 1.9% to 1.3% q/q. The core rate, which is considered a more reliable gauge, is likewise expected to fall - from 6.9% to 6.7% y/y and from 1.7% to 1.4% q/q. Investors will be mindful that headline inflation surprised on the upside in Q4, rising from 7.3% to 7.8%. The two monthly inflation reports since the Q4 release in January, however, indicated that inflation was back on its way down, with headline CPI falling from 7.4% to 6.8% and beating expectations. The RBA would love to pause rates at 3.60% for a second straight month, and another drop in inflation would strongly support a pause at the May 2nd meeting. As well, another deceleration would be a strong indication that inflation has peaked, although the battle is far from over as it will take a long time to achieve the 2% target. The likelihood of another pause in rates stands at 83%, according to the RBA Rate Tracker. In the US, today's data has been a mixed bag. UoM Consumer Sentiment for April was expected to remain unchanged at 104.0, but surprised on the downside, falling to 101.3. There was better news from New Home Sales, which soared 9.6% in March, rebounding from -3.9% in February and crushing the estimate of 1.1%. There is resistance at 0.6751 and 0.6808 AUD/USD is testing support at 0.6657. Next, there is support at 0.6572
by OANDA
AUDCAD LongsI'm liking AUDCAD longs for a few reasons. Technical wise we have broken structure and we have a fib at the 61.8 from the swing high to swing low.. Looking at everything from a fundamental standpoint, there is a lot of optimism around the Aussie gaining strength from China reopenings, as well as a Hawkish RBA. Canada on the other hand has decided to pause rates and might continue to do so if the BoC see that inflation is starting to decelerate as well. This trade might take some time as most aussie pairs are slower but overall I like this trade.
Long
by EricDowdell
AUD/USD - Aussie shrugs as business confidence falls, RBA reviewThe NAB Business Confidence Index declined for a second straight quarter, falling by 4 pts. This missed the estimate of 2 and follows a Q4 2022 reading of -1. Business Conditions also dropped by 4 pts. The NAB found that businesses remain most concerned about wage growth and continue to report a shortage of workers. The good news was that supply chains have improved and there are expectations that inflation may have peaked. Australian Treasurer Chalmers released the findings of a review of the Reserve Bank of Australia today. The central bank last underwent major changes in the 1990s and the report had some 51 recommendations. The key suggestions include setting up a separate policy board, press conferences after each policy meeting and reducing board meetings from 11 to 8, in order to give households more time to react to rate decisions. The changes are not expected to affect rate policy and the markets shrugged as the Australian dollar is drifting today. The report did not make any recommendations regarding the future of Governor Lowe, whose mandate expires in September. Lowe welcomed the report's recommendations and said he would be happy to continue serving if ask to do so by the government. Lowe has absorbed heavy criticism for the sharp rise in rate hikes after stating in 2020 that rising inflation was transient and the RBA would not raise rates for three years. This forecast was of course way off the mark and the RBA has raised rates some 350 basis points over the past year, which has weighed heavily on households as mortgage payments have soared. There is resistance at 0.6803 and 0.6896 AUD/USD is testing support at 0.6711. Next, there is support at 0.6018
by OANDA
AUD/USD - Australian dollar jumps on sizzling jobs reportAustralia posted a blowout employment report today, giving the Australian dollar a strong boost. The economy created 53,000 new jobs in March, after a downwardly revised 63,600 a month earlier. This crushed the estimate of 20,000 and especially impressed as full-time employment increased by 72,000 (part-time decreased by 19,200). Unemployment was unchanged at 3.5%, below the forecast of 3.6%. What can we expect from the RBA? The central bank paused in March for the first time in the current rate-tightening cycle and Governor Lowe made clear that another pause was data-dependent. The next meeting is on May 2nd and the odds of a pause have eased to 78%, compared to 94% before the employment release. Australia releases the March inflation report less than a week prior to the meeting, and if inflation is higher than expected, the RBA will have to consider a 25-basis point increase in order to cool down the job market and inflation. The recent bank crisis, which roiled the global financial markets, appears to have eased. Still, the extent of the fallout of the collapse of four US banks and Credit Suisse is not yet clear, and central banks need to give consideration to the crisis in mind as they determine their rate path. RBA Deputy Governor Bullock addressed this issue on Wednesday, saying the RBA had considered a pause well before the bank crisis, and the bank decided on the non-move in order to protect job gains and to take into account lags in rate policy. Bullock maintained that there were no signs that the bank crisis had caused a tightening in financial conditions in Australia. There is resistance at 0.6897 and 0.6791 AUD/USD tested support below 0.6700 earlier today. The next support level is 0.6608
by OANDA
The end of an era.This week, the Bank of Japan governor’s Kuroda’s decade long term comes to an end. As such we would like to take some time to review what this means for the Yen and in particular, the AUDJPY. Firstly, central bank timings. In case you missed it, last Tuesday the Reserve Bank of Australia (RBA) snapped its consecutive 10 rate hikes, being the second major central bank in developed markets to pause after the Bank of Canada. On the other hand, the Bank of Japan’s (BOJ) inaction thus far, is in stark contrast to the rest of the world. Kuroda officially ends his second 5-year term. With the new Governor Ueda at the helm, we think a move away from the current policy stance is very likely for BOJ as inflation remains uncharacteristically high for Japan and unemployment still relatively contained. A shift in the BOJ’s policies could mean the end of the largely debatable Yield Curve Control (YCC) policies, either in the form of abandonment or yet another change to the policy band or target yield as it repeatedly trades close to the upper limit of the currently allowed range. In fact, the OIS Implied rates for the 10-year Japanese gov yields show a huge disparity from the BOJ’s policy ceiling of 0.5%. While it has corrected from the high, it still trades north of the 0.5% cap by a clear margin, indicating market participants’ expectations that the yield cap is likely to be abandoned or shifted higher again. Coincidentally, the BOJ can take a page out of the RBA’s book, where RBA faced an almost identical situation, when in 2021 it was forced to abandon its three-year yield target. Once it lost control, yield quickly shot up there after. If or when the BOJ lose control of its YCC program, this warrants a peek into what might happen to Japanese Yields. Market expectations of forward rates are completely opposite for these two countries, with participants expecting the RBA to execute multiple rates cut through 2023, while Japan is expected to hike rates. So what does this mean for the currency pair? Well one way to look at this is the real yield differential between Japan (JP) and Australia (AU). When the AU – JP yield differential collapses, the AUDJPY tends to follow suit. If RBA is to hold rates, while the BOJ is to raise, we could see this yield differential collapse from here, paving the path for the next downward move in the currency pair. On the technical front, the AUDJPY is trading near its upper resistance of a four decade long descending triangle. On a daily timeframe, although the pair's first attempt to break below the 88 handle was short-lived, it now sits just above this support, which could lead to a second coming. Of course, such a trade might take a while to play out given the decade long chart pattern as well as fundamental factors such as central banks’ policy shifts. Looking ahead, the next potential catalyst could be the Bank of Japan’s first meeting under a new leadership on the 27/28th of April, while the RBA’s next meeting is scheduled for 2nd of May. To express this view, one option is to use the CME AUDJPY currency pair, which allows you to short the currency pair directly. Alternatively, if liquidity and contract size are of concern, the same view can be expressed by selling one Micro USDJPY Futures and buying two Micro AUDUSD Futures to construct a synthetic AUDJPY pair. Setting up the AUDJPY currency pair this way allows a more palatable trade as the notional amount is on roughly 20,000 AUD or 10,000 USD. This synthetic set-up allows us to access a more liquid market in both contracts compared with the full sized one. Using the descending triangle structure as a guide, we set our stops at 94, close to the previous resistance and our take profit at 70. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com
Short
by inspirante
🚀 AUD/USD Bullish Breakout: Long Opportunity 📈The AUD/USD pair looks bullish 📈, as it has broken above the 200-day SMA. We're taking a long position at 0.67922, targeting 0.68498 (TP) with a stop loss at 0.6734 (SL). Keep an eye on the upcoming RBA decision, which could impact the market sentiment. Trade with caution and manage your risk wisely. Good luck! 🍀 Signal provided by @ss7trader 🌟 #AUDUSD #forex #trading #long #bullish #RBA #technicalanalysis #ss7trader #tradingview
Long
by ss7trader
AUD/USD - Aussie on the move, RBA expected to pause ratesThe Australian dollar has edged higher at the start of the week. In the European session, AUD/USD is trading at 0.6715, up 0.45%. The RBA meets on Tuesday (Australia time) and is expected to pause rates. The US releases ISM Manufacturing PMI, which is expected to record another decline. The RBA has aggressively tightened interest rates in the current cycle, raising rates 10 straight times. The fight against inflation continues but there has been some improvement. February CPI fell sharply to 6.8%, vs. 7.4% prior and 7.1% anticipated. Inflation is more than triple the RBA target, but the sharp rise in rates has dampened economic activity and further hikes could jeopardize a soft landing. The RBA is widely expected to stay on the sidelines, with the market pricing in a pause at 86%. Governor Lowe has said that in addition to inflation, employment and consumer spending data would play a key factor in the RBA's decision. The labour market remains tight, but retail sales hit the breaks in February and slowed to just 0.2%, down from 1.8% in January and just above the consensus estimate of 0.1%. The weak retail sales data supports the RBA taking a breather. The banking crisis, which roiled global financial markets, raised fears of a financial meltdown. Although the contagion appears to have been contained, central banks are having to think twice about raising rates in an uncertain economic landscape, and if the RBA does pause, it could use the banking crisis as further ammunition in defending its decision. We're seeing a decline in manufacturing across the globe as demand remains weak. The Russian invasion of Ukraine and China's Covid-zero policy interrupted supply chains and dampened demand, and manufacturing is yet to recover even though China has made an about-face and relaxed its Covid regulations. The US is no exception to this disturbing global trend. ISM Manufacturing PMI has been in decline for four straight months, with readings below the 50 threshold, which separates expansion from contraction. The estimate stands at 47.5, a bit lower than the 47.7 reading in January. AUD/USD is putting pressure on resistance at 0.6737. Above, there is resistance at 0.6790 There is support at 0.6678 and 0.6582
by OANDA
RBA meeting preview – a defining moment in the cycle Time – 4 April @ 14:30 AEDT In the March RBA meeting minutes, the RBA noted policy was now in restrictive territory and they would “reconsider” the case for a pause in the April meeting. Is there enough new information to compel this pause? Market expectations - hike or a pause? The market prices just 4bp of hikes for this meeting, equating to a 16% chance of a 25bp hike. We see just 10bp of hikes priced for both the April and May meeting, with the market seeing the effective cash rate at 3.52% by September. Economists’ expectations are more divided than the pricing implied in the interest rate futures – of 26 economists polled by Bloomberg 16 are calling for a pause and 10 for a 25bp hike. AUD positioning – essential when assessing risk around any major announcement. Looking at AUD futures positioning, or spot FX positioning reported by banks, there is no extreme bias - so positioning, in isolation, shouldn’t result in any exacerbated moves in the AUD. In the weekly CoT report, we see non-commercial accounts (trading FX futures) hold a net position of -38,459 contracts - that is the 49th percentile of the 5-year range. In the more defined TFF report leveraged funds (again trading FX futures) are small net long at 6290 contracts, the 67th percentile of the 5-year range. (CFTC/CoT report – non-commercial AUD futures positions) Investment bank flow reports portray leveraged funds running a small net short AUD position, while real money accounts are long but not neither are at extremes. Pepperstone’s clients hold a net long AUD position, and this could be representative of broad retail trader positioning and sentiment. Digging into this we see a split on the near-term direction of AUDUSD, with 52% of open positions held short (48% long). There is a more concentrated long bias in the AUD crosses with 77% of open positions in AUDNZD held long and 74% short EURAUD and 79% short GBPAUD. This is likely a reflection of the set-up in the pairs and not on the RBA meeting per se. Trading the RBA meeting Initial thoughts I think the RBA holds rates unchanged, but I also think 4bp of hikes that are priced is too low and the probability of a hike should be closer to 40% than the implied 16%. The downside in AUD on a pause seems limited, given the RBA will likely make it clear in the statement they will retain the flexibility to hike rates in May. My preferred tactical approach is to fade any extreme initial moves – using limit orders to sell rallies or buy weakness, as I see a high probability the RBA statement may counter any initial move driven by their actions with the cash rate. Need to know Market pricing portrays a high degree of conviction that the RBA are on hold - so a 25bp hike could cause the AUD to see a solid spike off the bat. The extent by which price could extend would be driven by the RBAs statement and whether the market felt the wording suggested the May meeting was also priced too low. With 10bp of hikes priced for both this meeting and May, the market is essentially saying that if they don’t hike at this meeting then it's unlikely the RBA will hike in May – this seems fair, as they are more likely to hike now and pause in May. With subdued levels of AUD implied volatility, the market is not expecting to be shocked – for a genuine surprise I suspect we’d need to see a ‘dovish hold’ – where the RBA keep rates on hold and offers a clear view they will pause for an extended period as they assess the lag effect of tightening into the real economy. This seems unlikely given inflation is still far too high. Conversely, a ‘hawkish hike’ – where we get a 25bp hike, and the statement signals another could come in May – this would get the AUD firing. Again, this seems unlikely, as it would cause a strong tightening of financial conditions at a time when growth is delicately poised. The case for a hike - Those calling for a hike of 25bp see a tight labour market, strong business confidence, and high-capacity utilization. Digging into the Feb monthly CPI indicators we saw broad-based month-on-month rising price pressures – it was only holiday, travel and accommodation and recreation that created the disinflation impulse. The case to pause - Those calling for the RBA to hold rates at 3.6% acknowledge that headline inflation is moderating quicker than expected, suggesting a big downside risk in the Q1 CPI print (released 26 April). There is clear evidence that inflation has peaked and fallen to the RBA’s estimate of 6.7% by June. Wage growth is not problematic and there are lag effects from 360bp of hikes that still need to filter through to the real economy – there is also a significant number of fixed-rate mortgages rolling off in Q223. I think the RBA hold but I also see the implied probability too low – how do you see the risks?
by Pepperstone
AUD/USD - Aussie falls as inflation dipsThe Australian dollar is trading at 0.6670 in Europe, down 0.57%. Australian inflation was lower than expected, raising speculation that the Reserve Bank of Australia might pause at its April meeting. Australia's inflation rate for February eased to 6.7% y/y, down from 7.4% prior and the 7.2% estimate. It may be too early to declare that inflation has peaked, but there's no question that inflation is heading in the right direction. That is good news for businesses and households, which have been hurt by the double-punch of high inflation and rising interest rates. The unexpected sharp drop in inflation likely has cemented the RBA pausing at the April 4th meeting, and that is weighing on the Australian dollar today. RBA Governor Lowe had said that this week's retail sales and inflation releases would be key factors in the rate decision. Retail sales slowed to just 0.2% m/m in February, down from 1.2% prior and shy of the estimate of 0.4%. Weak consumer spending and falling inflation point to the economy slowing, and the RBA will likely respond with a pause, which would be the first since the rate-tightening cycle began in May 2022. The markets have fully priced in a pause at next week's meeting, with a likelihood of around 90%. In the US, higher rates have taken a toll on the housing sector. Pending Home Sales has recorded mostly declines over the past year, as potential home buyers are finding it more difficult to afford a new home. The indicator is expected to come in at -2.9% in February, after an unexpected jump of 8.1% in January. AUD/USD is testing resistance at 0.6676. Above, there is resistance at 0.6728. There is support at 0.6565 and 0.6402
by OANDA
AUDJPY Potential DownsidesHey Traders, AUDJPY is trading in a descending channel, in the coming week i expect JPY to continue outperforming AUD as JPY is considered a safe haven in time of uncertainty in the Forex Market so it may continue to strengthen against commodity currencies and as Reserve Bank of Australia attend an 11 Years interest rate high that open a door for a pause and signals dovish interest rates hikes the coming meeting. so AUDJPY shorts should be a perfect catch. Technically we have noticed that AUDJPY is approaching the descending channel resistance so i will be watching a potential reversal around 89 resistance zone. and i would be targeting the channel support. feel free to ask any question in the comment section. Trade safe, Joe.
Short
by JoeChampion
22
Australian dollar climbs on strong employment dataThe Australian dollar has taken investors on a roller-coaster ride this week, reflective of the gyrations we're seeing in the financial markets. In the North American session, AUD/USD is trading at 0.6656, up 0.56%. Australia's employment report for February was stronger than expected. The economy produced 64,600 news jobs, after a decline of 10,900 in January. This beat the estimate of 48,500. What was especially encouraging was that full-time jobs rose by 74,900, with part-time positions declining by 10,300. The unemployment rate fell to 3.5%, its lowest level in almost 50 years, down from 3.7% and below the estimate of 3.6%. The tightness in the labour market has allowed the RBA to aggressively tighten, with ten straight rate hikes since April 2022. Inflation slowed to 7.4% in January, down from 8.4% in December, so the rate hikes are having an effect on curbing inflation. Still, it will be a long road back to the inflation target of around 2%. The central bank is leaning to taking a pause at the April meeting and leaving the cash rate at 3.60%. Major central banks are moving away from continued tightening and the RBA will have to take that into account, as well as the Silicon Valley Bank crisis which has investors on edge about contagion spreading. Central banks have to be cautious with all the market turmoil, for fear that additional tightening would make a global recession more likely. Market pricing of rate moves has been gyrating like a yo-yo, and currently there is a 10% chance that the RBA will cut rates by 25 basis points at the April meeting. Just a month ago, the markets expected rates to peak at 4.1% in August. The SVB crisis has completely shifted pricing and the markets are currently expecting rates to fall to 3.35% by August.On There was more good news as Australian consumer inflation expectations for March ticked lower to 5.0%, down from 5.1% and below the forecast of 5.4%. AUD/USD is testing support at 0.6639. Below, there is support at 0.6508 0.6713 and 0.6844 are the next resistance lines
by OANDA
4
AUD/USD falls ahead of employment reportThe Australian dollar, which has posted strong gains early in the week, has run into a wall on Wednesday. In the European session, AUD/USD is trading at 0.6638, down 0.66%. Australia releases the February employment report on Thursday (Australia time). Job growth is expected to rebound, with a consensus of 48,500 after a soft January read of -11,500. The unemployment rate is expected to tick lower to 3.6%, down from 3.7%. The Reserve Bank of Australia will be watching closely, as a robust labour market has enabled the central bank to continue its tightening - the Bank raised rates last week by 25 basis points, a 10th straight hike which brought the cash rate to 3.60%. The good news is that the end of the tightening cycle could be near, with the markets pricing in a pause at the April meeting. Consumers and businesses are weary of rising interest rates and confidence indicators do not paint an optimistic picture. Along with the job data, Australia releases consumer inflation expectations for March. The markets are braced for the indicator to rise to 5.4%, after a 5.1% gain in February. Inflation expectations is a key inflation gauge as it can set the direction of actual inflation, and the RBA will not be happy if inflation expectations accelerate. There is an uneasy calm in the air as the dust begins to settle after the Silicon Valley Bank collapse. The sky is not falling, not even above US bank towers, as regional bank stocks have rebounded. The US inflation release on Tuesday delivered as expected, with both the headline and core CPI readings matching the estimates. Headline CPI fell to 6.0%, down from 6.4%, while the core rate ticked lower to 5.5%, down from 5.6%. Inflation is cooling but we're not seeing the disinflation process that the markets were celebrating only a few weeks ago. AUD/USD is testing support at 0.6639. Below, there is support at 0.6508 0.6713 and 0.6844 are the next resistance lines
by OANDA
AUD/NZD Retests Resistance Ahead of RBA Rate DecisionThe AUD/NZD currency pair has recently broken through a key support level and is now being retested as a resistance level. This development comes just before the RBA interest rate decision, which is expected to result in a 25-point increase. However, traders should keep an eye out for signs that the central bank is taking a more dovish stance or downplaying the current terminal rate, which could put downside pressure on the AUD. In light of recent negative economic data for the AUD, a shift away from a hawkish stance could exacerbate this downward trend. From a technical standpoint, if the AUD/NZD breaks below 1.0855 and maintains this level, it could be a good opportunity to sell this currency pair.
Short
by natron
10
AUDUSD RBA Decision 7th March 2023The AUDUSD remains "trapped" between the support (0.67) and resistance (0.6780) in the lead up to the Reserve Bank of Australia (RBA) interest rate decision at 11:30am GMT+8 The current expectation is for a 25bps rate hike, to take the interest rates in Australia from 3.35% to 3.60%. Generally, since August 2022, every interest rate hike from the RBA had seen the AUDUSD trade lower. This trend was broken with the most recent decision in February. Currently trading at the 0.6746 price level, if the RBA does hike rates by 25bps AND signals that further rate hikes can be expected, the AUDUSD could trade up to the 0.6780 resistance level. However, at the resistance level, if the price fails to break higher, the AUDUSD could reverse back down and continue to be trapped within the range.
Long
by JinDao_Tai
4
NZDUSD Outlook 7th March 2023The NZDUSD traded lower before the US market session as the price broke below 0.62 to test the 0.6170 intermediate support area. However, due to the overnight weakness of the DXY, moves to the downside was sustained as the NZDUSD reversed strongly to reclaim and trade beyond the 0.62 resistance turned support level. With the Reserve Bank of Australia (RBA) interest rate decision due today, the volatility and directional bias of the NZDUSD could be heavily influenced due to its correlation with the AUDUSD. While the AUDUSD usually drops following an interest rate decision from the RBA, the most recent decision in February saw the AUDUSD climb briefly higher. Therefore, if this upward move continues for the NZDUSD, the price could retest the 0.6260 resistance level, however, watch out for a potential hurdle at the 0.6234 price level which aligns with the 61.8% Fibonacci retracement level.
Long
by JinDao_Tai
AUDUSD Outlook 6th March 2023The AUDUSD traded with significantly choppy price action toward the end of last week. The price generally fluctuated along the 0.6750 price level before trading slightly higher, toward the resistance level of 0.6780, due to the weakness of the DXY. Although the AUDUSD has been trapped within the price range of 0.67 and 0.6780 in the short term, the current DXY weakness could see the AUDUSD trade slightly higher. However, look toward how the price action develops for a potential setup, with the RBA interest rate decision due tomorrow. Based on previous backtesting, the AUDUSD tends to trade lower following the RBA interest rate decision. Therefore, if by the news release tomorrow, the AUDUSD continues to trade below the 0.6780 resistance level, this could be a good setup for a retest of the 0.67 price level again.
Short
by JinDao_Tai
Key news events for the weekIt might be a big week head for the markets. Monday CHF CPI data release. The inflation gauge for the Swiss is expected to be lower than previous, signaling a slowdown in inflation growth. Could result in some weakness in the CHF if markets anticipate no more rate hikes to come from the SNB. Tuesday Reserve Bank of Australia (RBA) interest rate decision. Another 25bps rate hike to come? However, the AUDUSD has often traded lower following the release of the news. Could the same thing happen again? Fed Chair Powell testifies during the US session. This could lead to increased volatility on the DXY, but watch what Powell says! Pivot? Or continue with the rate increases? Wednesday Bank of Canada (BoC) is set to hold rates at 4.50%. Unlikely that we'll see a surprise given how recent Canadian CPI has been released lower than previous (signaling a possible reversal in inflation). Friday Bank of Japan (BoJ) is set to announce its monetary policy decision. This is Kuroda's last monetary policy meeting as Governor. While a surprise is unlikely, he might lay the foundations for his predecessor. Expect significant volatility on the Japanese Yen. Since it is the first Friday of the month, look out for the release of the US Non-Farm Employment Change (NFP). The data shouldn't surprise like the previous month, however, some stability in the employment data could see markets reconsider the FOMC's stance on further rate hikes, leading the DXY to trade lower. Whatever the news, watch out for my daily posts on the specific currency pairs as I update you on possible setups and price levels. Also, tune in to the Daily Live Stream at 3pm (GMT+8)!
TVC:DXY
by JinDao_Tai
4
AUD/USD jumps on inflation, China PMIsThe Australian dollar is showing strong gains for the first time in a week. AUD/USD is trading at 0.6764 in Europe, up 0.53%. Australia's inflation fell to 7.4% in January, down from 8.4% in December and below the estimate of 8.0%. Australian Treasurer Jim Chalmers said that he was "cautiously hopeful" that inflation has peaked, but inflation still remained the economy's biggest challenge. The GDP report was not as positive, with a gain of 0.5% q/q in Q4, below the Q3 gain of 0.7% and the forecast of 0.8%. On an annualized basis, GDP slowed to 2.7% in Q4, down sharply from 5.9% in the third quarter. The RBA's rate-hike cycle has slowed economic activity and is responsible for the drop in inflation as well as the soft GDP. The central bank will have to consider how aggressive it should be with regard to future rate increases. Inflation needs to come down much further, but further rate hikes raise the risk of the economy tipping into a recession. The RBA is expected to raise rates by 25 basis points next week but may pause at the April meeting if the data, particularly inflation, allows the Bank to take to a breather. The Aussie received a boost today from strong Chinese PMIs. Manufacturing and Non-manufacturing PMIs improved in February and beat expectations, with readings of 52.6 and 56.3, respectively. A reading above 50.0 indicates expansion. China is Australia's largest trading partner and a stronger Chinese economy means greater demand for Australian exports, which is bullish for the Australian dollar. China's transition from zero-Covid to reopening the economy has gone well so far and a rebound in China is important not just for China and the region but for the global economy as well. AUD/USD has support at 0.6656 and 0.6586 There is resistance at 0.6788 and 0.6858
by OANDA
AUDUSD Outlook 1st March 2023Overnight, the AUDUSD fluctuated between the 0.67 and 0.6760 price range as the DXY retraced lower but recovered in strength toward the end of the trading session. Early this morning, the AUD CPI was released at 7.4% (Forecast: 8.1% Previous: 8.4%) which was significantly lower than expected. This signals that the ongoing interest rate hikes from the RBA are taking effect in lowering inflation in Australia. However, a cost of the significant rate increases is the slowdown in the economy as the Australian GDP slid to 0.5% (Forecast: 0.8% Previous: 0.7%). The AUDUSD traded lower to test the 0.67 support level but rebound strongly to the upside, testing the bearish trendline. If the price breaks above the trendline, the AUDUSD could see further moves higher toward the near-term resistance area of 0.6780 before continuing with the downtrend, retesting the 0.67 round number support level and breaking below that. Beyond 0.67, the next key support level is 0.6630.
Short
by JinDao_Tai
AUDUSD retests 4H support after CPI dropHi, traders and TradingView community. Today we saw the AUDUSD retreat after Australian CPI data came in at 7.4, well below the 8.1% that had been expected. Unexpected data almost always has more impact on the market than expected, as it has shock effect. 7.4 is still a very firm number for inflation, and you might think, why is that a good thing? The drop is good, and it shows the RBA’s policy is working, and it also starts to put some doubt on the current rates outlook. But we’re wondering just how good it is. Yes, this could have an impact on the current rates policy, but we still feel that rates will have to continue higher to cut this figure back further. The AUDUSD continues to fight back after testing .6700. Price at this point remains in its 4H consolidation pattern. Could the market be thinking it’s a good drop, but work still has to be done? Will we see a retest of .6700 in tonight’s LON session? Buyers have .6752 resistance to beat, and sellers have .6700 to break. These are the 4H levels we are watching on the AUDUSD, and if one of them can be beaten, we will look to see if a new leg can develop. What are your thoughts? Good trading.
by Eightcap
AUD/USD eyes CPI, GDPThe Australian dollar remains under pressure and has edged lower on Tuesday. AUD/USD dropped below the 0.67 line on Monday for the first time since Jan. 3. Australian retail sales jumped 1.9% m/m in January, following an upwardly revised 4% decline in December and beating the consensus of 1.5%. The data indicates that consumer demand remains resilient despite rising interest rates and higher inflation. For the RBA, the upswing in consumer spending is a sign that the economy can continue to bear higher rates. The central bank has hiked some 325 basis points since May 2022 in a bid to curb inflation. The cash rate is currently at 3.35% and the markets have priced in a peak rate of 4.3%, with four rate hikes expected before the end of the year - one more than what is expected for the Fed. The RBA meets on March 7 and is widely expected to raise rates by 25 basis points. Wednesday could be a busy day for the Australian dollar, as Australia releases inflation and GDP reports. Inflation for January is expected to ease to 7.9% y/y, following an 8.4% gain in December. GDP for the fourth quarter is projected to slow to 2.7% y/y, after a robust gain of 5.9% in Q3. A decline in inflation and in GDP would indicate that high interest rates are having their intended effect and slowing economic activity. The question is whether the RBA will be able to guide the slowing economy to a soft landing and avoid a recession. In the US, a recent string of strong numbers has raised speculation that the Fed could raise interest rates as high as 6%. The unseasonably warm weather in January may have played a part in the better-than-expected numbers and we'll have to see if the positive data repeats itself in February. The markets have shifted their stance from a final rate hike in March with rate cuts late in the year to pricing in three more rate hikes in 2023. If upcoming inflation, employment and consumer spending reports point to a weaker economy, we can expect the markets to revert to pricing in a dovish pivot by the Federal Reserve. AUD/USD has support at 0.6656 and 0.6586 There is resistance at 0.6788 and 0.6858
by OANDA
EURAUD: Expecting ECB to be more hawkish than RBA this weekWhere the ECB is being hawkish on rate hikes and has room for manoeuvre, the RBA is trying to be hawkish, but has less room due to low consumer sentiment / general backlash due to the increasing costs due to interest rates - it also seems as though inflation may have peaked, we'll find out soon enough if it's stabilising... In terms of price action, we look to have broken a descending dynamic trendline and we're retesting, I then expect a move up to 1.563 to test this resistance in the coming week.
Long
by Finchcliffe