AUD/USD Bounces as US Greenback Digests Powell Pivot and Information Beat. The place To From Right here?

Australian Greenback, AUD/USD, Crude Oil, US Greenback, DXY, Fed, Powell – Speaking Factors

  • AUD/USD rallied in Asia as danger urge for food recovered post-Powell
  • APAC equities have been primarily greater, crude nonetheless susceptible earlier than OPEC+
  • Yields and base metals discovered greater floor. Can AUD/USD catch a bid?

The Australian Greenback rejected a brand new low for the yr because the fall-out from Federal Reserve Chairman Jerome Powell’s testimony to the Senate Banking Committee continues.

US Treasuries proceed to see greater yields within the Asian session, significantly within the short-end, with the 2-year bond buying and selling above 0.60%.

Mr Powell stated that the economic system is powerful and inflationary pressures are excessive. He appeared on the subsequent Fed assembly for a dialogue to wrap up the asset buying program a couple of months sooner than beforehand anticipated. In his remarks, he retired the reference to ‘transitory’ inflation.

The US Dollar Index (DXY) initially spiked greater on the feedback however pulled again to close the place it was earlier than the testimony. On that USD rally, AUD/USD hit a brand new low for 2021 however then spent the following hours recovering.

The Australian Greenback then received a lift after third quarter GDP numbers got here in at -1.9% for the three months by means of September, above expectations of -2.7%. The annual quantity was 3.9% in opposition to forecasts of three.0%.

Iron ore costs additionally rose once more as we speak and at the moment are greater than 18% above the lows seen final month. Different base metals had small features in Asia.

WTI crude oil continues to stay underneath stress under US$68 a barrel, a good distance from US$78 a barrel previous to the Omicron variant outbreak information.

The dialogue on the OPEC+ assembly on Thursday would possibly shift away from issues in regards to the launch of strategic petroleum reserves and deal with the doable impacts of the brand new mutation of Covid-19. A reduce in output may nonetheless be on the desk.

APAC equities shrugged off the detrimental Wall Street result in be largely constructive on the day. Korea’s Kospi index was one of the best performer whereas Australia’s ASX 200 was barely down.

Later as we speak, the US will see information on mortgages, jobs, building and manufacturing PMI. We’re additionally resulting from hear from Federal Reserve Chair Jerome Powell and US Treasury Secretary Janet Yellen once more.

AUD/USD Technical Evaluation

AUD/USD bounced off a 1-year low within the final session and the earlier low at 0.71062 would possibly now present a degree of assist. The low seen at 0.70626 may be a assist stage.

The value is at present under all quick, medium and long-term simple moving averages (SMA). This will likely recommend that bearish momentum would possibly proceed to evolve.

On the topside, potential resistance would possibly lie on the pivot level and former highs of 0.71705, 0.72735 and 0.73707.


Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the feedback part under or @DanMcCathyFX on Twitter

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