AUD Up Depite The Stronger US Dollar
Axi | Oct 17, 2016 12:52
Originally published by AxiTrader h2 Quick Recap /h2
Despite the fact that Euro is at multi-month lows, the USD/JPY is back above 104, and GBP/USD back near 1.21 the AUD/USD has remained well supported after a dip late last week.
In no small part that is because of the offshore demand associated with the government's $7.6 billion 30-year bond issue last week. But it's also associated with the better inflation data in China in Friday and the very same hint from Fed chair Janet Yellen that maybe the US economy might run a little hotter
h2 What You Need To Know/h2The Aussie dollar at 0.7612 this morning is, in reality still stuck inside the recent 0.7450/0.7750 with the inside wings of 0.75/0.77 as the near term parameters. That's a pretty unspectacular performance really if you just look at the AUDUSD rate.
But the Aussie dollar is more than just AUDUSD and it is in the cross rates that you can continue to see the support it retains.
EUR/AUD has fallen to 1.4397, a two-year low. GBP/AUD is down at 1.5977 when it looked like it might have been trying to base around 1.61 last week. Elsewhere AUD/JPY has risen to 79.46 a two-month high, AUD/NZD is a 1.0735 after a low of 1.0250ish recently and after the weaker than expected Singaporean growth data last week AUD/SGD has rocketed to 1.0589 the highest level since May 2015.
The AUDUSD even managed to have an up week against the US dollar last wee. So even though it's still mired in the range this all suggests is that even though the Australian dollar faces a number of specific technical and fundamental hurdles against the US dollar it continues to be well supported by global investors on a relative basis.
That's because Australia's commodity price basket remains relatively firm, the move in US rates is also pushing Australian bond rates higher, and there is a shift in thinking about another RBA rate cut - even with low inflation if that's the outcome when CPI is released later this month.
Looking at the week ahead there are a number of key hurdles for the Australian dollar. Not least of them is the release Wednesday of the raft of Chinese data including Q3 GDP along with monthly retail sales, industrial production and urban investment. The market showed last week with the release of weaker than expected trade data that the Aussie dollar still
The market showed last week with the release of weaker than expected trade data that the Aussie dollar still take a lead from what's happening in the Chinese economy. So I can't overstate the importance of Wednesday's releases.
Equally important will be the release of the RBA minutes Tuesday, governor Lowe's speech the same day and the September jobs data to be released for Australia on Thursday. the market is looking for a rise of 15,000.
h2 The Charts/h2
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Looking at the weekly AUDUSD chart the overhead resistance is obvious with multiple trendlines intersecting 50 points either side of 77 cents.
That suggests supply will remain in this region while support clearly resides between 0.7450 and 75 cents.
Have a great day's trading
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