AUD news - page 9

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AUD/USD: Make Or Break At A 'Tough Hurdle' Resistance Zone


While the medium-term uptrend for AUD/USD is intact, the current setup suggests that a corrective phase is close, given the deteriorating short-term technical backdrop. For that view, the recent struggles to extend through the next zone of critical resistance highlight the growing risk of a retracement.

In this regard, the .7700/.7850 resistance area has capped the upside for now. It includes the downtrend line from the 2013 high, the August and April highs, the 76.4% retracement from the May ‘15 high, as well as the 38.2% retracement from the 2014 peak. Given this strong confluence of resistance, we sense it will remain a tough hurdle to exceed. Note that this view is also consistent with the overbought and diverging momentum setup. Still, we continue to monitor key support levels for confirmation of a sustained corrective phase, given similar bearish frameworks since Q1.

 

AUD/USD forecast for the week of October 17, 2016


The AUD/USD pair initially fell during the course of the week but found enough support at the 0.75 level to turn things back around and form a hammer. Because of this, we very well could see more bullish pressure but there so much in the way of noise above that is going to be difficult to go long on the longer-term chart. Pullbacks should continue to find buyers until we break down below the 0.75 level. I will trade this off short-term charts though more than anything else.


 

NY Times on Australia's 4 "too big to fail" banks

Aussies arrested in China over suspected gambling crimes (maybe they won?)
Now this from the New York Times:
  • Big banks are under a spotlight around the world. International regulators are weighing new rules intended to put them on sounder financial footing. In the United States, officials continue to warn that big banks there lack credible plans in case of a financial collapse.
  • Still, Australia stands out. At a time when the world is considering what to do about banks that are too big to fail, Australia offers a glimpse of just how big - and how dominant - they can become.
 

RBA Gov. Lowe making the headlines with his Trump comment


New governor of the Reserve Bank of Australia Philip Lowe made a speech earlier

Link here, and from the Q&A here

He had plenty to say on the economic outlook and also on prospects for monetary policy
But ... he also said this (at the second link, above):
  • Possible election of Donald Trump as President unlikely to be as benign an event as Brexit
The non-financial press has latched onto that comment.
  • "We thought about this in Brexit but that turned out to be a fairly benign event in markets. The possible election of president Trump I suspect wouldn't be as benign an event, but we don't have a Trump plan, what we do is have a generic response plan to a whole range of shocks"
 

AUD: Unlikely To Sustainably Break Above Recent Range Highs


The greater upside risk for the AUD would be if rates markets begin to price in RBA hikes. However, we would emphasise that this is not our base case.

The front end has sold off and now has just roughly 10bps of cuts priced in over the next year reflecting the RBA’s recent emphasis on the flexibility of the inflation targeting framework. Hence, one CPI print is unlikely to be decisive for the RBA. While a stronger than expected CPI print could see the front end move to a neutral stance on the RBA, it is not likely to be the catalyst to price in hikes. A more neutral stance in the front end would likely see the AUD trade towards the top of recent ranges (around USD0.78), but would not justify a break higher, in our view.

As such, absent a broad reassessment of the degree of slack in the economy and of the underlying inflation trajectory, we think the AUD is unlikely to sustainably break above recent range highs.

source

 

AUD slipping just a little after the China data


AUD/USD running into resistance ahead of 0.7700 again

NZD/USD is a touch softer also

The Chinese data was pretty much on expectations, except for industrial production that missed 

 

AUD/USD Attempting To Break Critical Resistance Ahead Of Jobs Numbers


AUD/USD is seen in a pivotal area that would inevitably provide a clear directional bias over the medium-term. The pair is on track to post six consecutive daily gains and has exceeded the monthly open for October. The pair has breached a declining trendline dating back to May, suggesting a continuation of the broader recovery seen this year. The daily close today will be important in assessing if the break is sustained.

The currency pair was seen approaching resistance from a horizontal level at 0.7689 on Tuesday and consolidated in a 30 point range throughout the Asian and European session. A rejection was seen ahead of the level in the European session with a high of 0.7687, while momentum has picked up to the upside in North American trading with the pair scaling the resistance level. Momentum picked up following the break of the horizontal level as the pair sliced through the declining trendline.

The current rally in the pair has come after a bounce from a rising trendline that extends back to January. The pair bounced from the level last week and has shown strong momentum in the current rally.

Out of Australia, the Melbourne Institute reported their latest leading index figures to rise 0.1%, marking the second consecutive above trend result following 15 months of below trend reading. The Consumer Board reported their leading indicator unchanged, following a revised gain of 0.5% in the previous month.

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Australian employment data - big miss. But what will the CPI do? Preview

The RBA will not be happy with today's employment report. They'll look through one month's data but there is no denying today's was poor indeed.

The RBA will also pay heed to the inflation report (twin mandate, right?)
We only get CPI data once a quarter from Australia (official data that is, we do get private gauges of inflation monthly). The Australian Bureau of Statistics release Q3 CPI on October 26 (0030GMT).

Here's what Westpac is looking at for the CPI data
  • Forecast for the headline CPI is 0.9% q/q and 1.5% y/y yr from 1.0%yr.
    September is traditionally a stronger quarter, ABS seasonal factor worth 0.3 ppts., "this results in the seasonally adjusted CPI rising a smaller 0.6%qtr"
  • Core inflation (average) is forecast to print 0.4%qtr ... which will see annual core inflation lift to 1.6%yr from 1.5%yr
  • The trimmed mean is forecast to rise 0.38% while the weighted median forecast is 0.40%. The six month annualised pace of the average of the core measures is forecast to lift to 1.7%yr from 1.3%yr in Q2 which remains a modest inflationary pulse.
 

AUD/USD Tumbles On Dollar Advance And Weak Aussie Jobs Report


A weaker jobs report sent the Aussie Dollar lower in Asian trading, while a sharp advance in the US Dollar following today’s ECB meeting has triggered a continuation lower. AUD/USD was last seen trading at 0.7632 for a loss of 1.15% to nearly erase gains from the prior two sessions. The Aussie leads the decliner’s list among the majors today, while the Greenback has outperformed all of its major counterparts. The drop lower today negates yesterday’s bullish break and signals the potential of a broader decline in the pair over the medium-term.

AUD/USD broke higher yesterday, scaling above a trendline that connects April highs with August highs. The trendline had triggered a turn lower in September and is seen as a pivotal point for the currency pair. Prior highs set in late September and early September were also breached, likely triggering stops from weak short positions. The turn lower today is on track to print a bearish engulfing candle on the daily chart, negating the break and setting a bearish tone in the near-term and potentially the medium-term as yesterday’s price action is likely to be viewed as a false break.

The catalyst for a turn lower today was the jobs data released during the Asian session. While the unemployment rate remained unchanged at 5.6%, beating analyst expectations for the figure to tick back up to 57%, employment change figures came in quite poor. The Australian Bureau of Statistics reported a decline of 9,800 employed people in September against expectations for an increase of 15,200. The report marks the second consecutive monthly decline, with a decline of 3,900 reported in August.

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AUD/USD Reversal Erases Weekly Gain


A sharp reversal in AUD/USD led to a bearish engulfing candle on Thursday that erased gains from the prior two days. A recovery attempt in Asian trading was short-lived, and a continuation lower in North American trading has taken the pair back into negative territory for the week.

The rally in the currency pair in the first half of the week had taken the pair into positive territory for the month as AUD/USD traded at two-month highs ahead of the sharp reversal. The turn came after softer jobs figures were reported from Australia and gained momentum as the US Dollar broke higher. The decline has taken the pair back into the red for the week and the month.

While momentum has slowed somewhat on Friday, the push lower has taken the pair below support seen at 0.7606. The level had held the exchange rate higher in late September and early October. The decline today is once again boosted by the Greenback.

The US Dollar index (DXY) broke higher following the ECB meeting as a result of a weaker Euro. Prior to the meeting, DXY had consolidated within a weekly range. The breakout has influenced most of the majors with the exception of USD/JPY as a break above recent highs has not materialized. GBP/USD remained within a narrowing range yesterday but is seen breaking down today. DXY is on track to post a second consecutive day of gains and was last seen trading at 98.79 for a gain of 0.47%.

Among the Aussie cross rates, AUD/NZD turned lower earlier this week and is on track to post a bearish engulfing candle on the weekly chart. AUD/CAD lifted higher on the back of a weaker Loonie, the pair carries some potential to break to 1-year highs next week. AUD/CHF broke to the highest level since April 2015 in the past week, but gains were not sustained. The pair is on track to post a weekly doji near resistance suggesting there is some potential for a reversal next week.

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