- AUD/USD has been unable to maintain the bid through the 0.72 handle and is meeting supply in the 0.7220s and currently heading lower for a test of 0.72 the figure again.
- AUD/USD had been anchored by a big 0.7200 option expiry for today’s NY cut, but still, bulls can’t find mention post the cut.
- AUD/USD is weighed by performances on Wall Street (benchmarks turning south), once again on the backfoot with eyes below the 21-hr SMA.
AUD/USD has been helped along by the buoyant SSEC and Chinese authorities proposing the various supportive policy measures which has also forced a decline in USD/CNH’s value, (falling from 6.97 to a recent low 6.9440. However, domestically, the Aussie economy is not giving the currency much to go on in the way of positives that is conducive to a sustained rally vs the greenback, where the US economy maintains the edge within the global arena. However, the main global risks stem from US-China trade tensions or a regional setback and eyes are on the lookout for a sharper-than-expected easing in the housing market.
All eyes still on China
- A global economic slowdown is upon us – Nomura
Saying that, the latest communication from the Reserve Bank of Australia (RBA) was more upbeat whereby GDP forecasts were revised higher by 0.25pp to an above-consensus 3.50% in 2019 and 2020 while the unemployment rate was lowered 0.25pp to 4.75% in 2020 and inflation in 2020 is now seen as a “a bit higher” than its 2.25% forecast for 2019. Still, we are a long way off from prospects of an RBA rate hike and the divergence between the FOMC and RBA keeps a lid on rallies – Again, China is a threat to any prospects of an RBA hike.
AUD/USD levels
Analysts at Commerzbank noted that AUD/USD retested the 55 day moving average at 0.7167 before recovering. “Below it lies the mid-October high at 0.7160. Provided that the latter level holds, the September and current November highs at 0.7302/14 are expected to be revisited. If this resistance zone were to be better, the 200 day moving average at 0.7459 and the July 9 high at 0.7484 would be in focus.”
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