Australian Dollar Grips on to Coal Train in Risk-Off Rout. Will AUD/USD Go Lower?

Australian Greenback, AUD/USD, COAL, CHINA, OPEC+ – Speaking Factors

  • The Australian Greenback had some yield assist early, however not sufficient
  • China cracks the whip on their power producers, including to demand
  • Excessive commodity costs, constructive yields, what is going to break AUD/USD?

In a single day, US information was principally in keeping with expectations. US GDP printed at 6.7% q/q progress for the second quarter towards forecasts of 6.6% whereas preliminary jobless claims have been a slight miss, coming in at 362k as an alternative of the anticipated 330k for the week prior.

US shares went decrease within the North American session because the debt ceiling continues to trigger uncertainty. There was commentary within the Asian session that an settlement is almost definitely going to be made.

Asian equities took the US lead and markets that have been open headed into the pink. Japan’s Nikkei 224 and Australia’s ASX 200 indices have been down over 2%. China and Hong Kong markets have been closed for holidays at this time.

There are stories circulating that earlier within the week, the Chinese language authorities had instructed power corporations to safe provide in any respect prices and that blackouts won’t be tolerated. Coal mines have been additionally instructed to supply, even when they’re over quotas. China presently has a ban on importing coal from Australia which is mostly of upper high quality than the native selection.

Pure gasoline is holding ranges close to 7-year highs whereas crude oil consolidated lofty ranges. OPEC+ will likely be assembly on Monday and telegraphed that boosting output by an additional 400,000 barrels per day would possibly come underneath evaluate.

AUD, CAD, NZD and NOK have been all weaker by way of APAC commerce regardless of roaring commodity costs as unfavourable threat sentiment outweighed elevated money flows for these currencies.

US yields softened whereas Australian yields rose barely, bringing the 10-year authorities bond unfold to parity. This may increasingly have initially been supportive for AUD/USD, however a big choice expiry at this time at 0.7200 and a broadly stronger USD weighed the Aussie Greenback down.

Wanting forward, Canadian GDP and manufacturing PMI is due for launch, whereas within the US, manufacturing PMI and College of Michigan Sentiment information is anticipated.

AUD/USD Technical Evaluation

The Australian Greenback threatened to make a brand new low for the yr two days in the past because it touched the decrease sure of the 21-day based mostly Bollinger Band.

The AUD/USD spot is under the 21-day easy transferring common (SMA). which is in flip under the 55-day SMA, and each have a unfavourable slope. That could be bearish.

There might be assist on the earlier low of 0.71061. Resistance is doubtlessly at earlier highs of 0.73165, 0.74782 and 0.76167.


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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