AUD/USD fails to cheer weekly consumer confidence data as traders reassess recent run-up

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  • AUD/USD pulls back from five-week high despite upbeat ANZ-Roy Morgan Consumer Confidence.
  • Traders await fresh clues to extend the previous risk-on amid an absence of major data/events on the economic calendar.
  • News will keep the bright spot amid a light economic calendar through the US session.

Although weekly consumer confidence data flashed positive signs for the AUD/USD pair, the Aussie fails to extend the latest upside while stepping back to 0.6865 by the press time of initial Asian morning on Tuesday.

In its latest reading for the week ended on 19-20 October, Australia’s ANZ-Roy Morgan Weekly Consumer Confidence rose to 111.60 from 110.90 earlier readouts. Even so, the Aussie buyers move further away from the quote while waiting for firm trade/Brexit clues.

Prices earlier rose as increasing odds of the US-China trade deal and signals that the United Kingdom (UK) Prime Minister (PM) Boris Johnson will get pass through the Parliaments boosted investor confidence. Also supporting the move was the overall weakness in the US Dollar (USD).

While there has been an absence of trade headlines off-late, The Sun came out with the news that a rainbow of UK policymakers is preparing to turn down the PM Johnson’s Brexit deal.

Given the lack of a major data/event up for publishing during the Asian session, investors will keep searching for headlines that could affect the market’s risk-tone.

However, the United States (US) economic calendar has some second-tier housing and manufacturing numbers to entertain short-term traders. “The market expects the Richmond manufacturing index to improve marginally in October to -7 following the sharp 10pt decline to -9 in September (10am ET). This would largely mimic the improvement in the NY Empire survey, but stand in contrast with the decline in the Philly Fed index. Separately, the consensus is looking for a modest -0.7% m/m retreat in existing home sales for September, following the nice 1.3% jump in the month before. All in, existing home sales are tracking a notable recovery so far in 2019,” says TD Securities.

Technical Analysis

September month high close to 0.6900 becomes an immediate key resistance for the buyers to watch as it holds the gate to pair’s further rise towards early-July low near 0.6910 and 200-day Exponential Moving Average (EMA) level of 0.6952. On the downside, pair’s declines below 100-day EMA level of 0.6852 can recall sellers targeting 0.6810 and 0.6770 rest-points.

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