Learn to Trade

AUD/USD Gains as China CPI Matches Forecasts

By No Comments

After the release of China’s data on early Wednesday, AUD/USD rises to 0.7220, in a total of 0.08% gains for the day. For two weeks, the Aussie pair previously dropped low as risk aversion kept the throne. The US dollar also weighed the AUD due to the strength of the dollar. 

China’s August month Consumer Price Index (CPI) matched 2.4% YoY expectations while the Producers Price Index eased from -2.4% prior to -2.0% while proving the market consensus right.  

Australia’s Home Loans surged 10.7% versus 3.1% forecast in July. Earlier during the day, Australia’s Westpac Consumer Confidence for September reversed the -9.5% previous reading with a +18% mark. 

The pair’s recent pullback also played a role in its risk-tone sentiment. AstraZeneca’s termed the latest halt in final trials of the coronavirus (COVID-19) vaccine as “routine and voluntary” after news of the halt earlier favored the risk-off mood. 

However, 9 other drug makers recently halted further trials unless they find safe research to back up their motive and continue with the trials.   

Against the backdrop of election talks in the U.S. and Brexit Woes of UK and the European Union (EU), Australia’s ASX 200 drops over 2.0% while S&P500 Futures trim early day losses to regain the 3,335 level. Further, the US 10-year Treasury yields decline 1.2 basis points to 0.67% by the press time. 

Meanwhile, on Australian employment also dropped to 0.4% over the month to Aug. 22. The rate of job losses that is caused by the coronavirus has stricken Victoria state slowing job employment from a month ago. 

An experimental weekly series that is released from the Australian Bureau of Statistics (ABS) shows that payroll jobs fell by 2% in Victoria over the month to Aug. 22, and rose 0.1% for the rest of Australia. 

Payroll jobs in Victoria were 7.9% below the level reported in mid-March, compared with 2.9% for the rest of Australia.  

For now, Asia’s economic calendar is mostly quiet and the risk catalyst above are the what the traders are eyeing on as of the moment. Even so, US JOLTS Job Opening may offer intermediate moves. 

 

Technical Outlook 

On the daily chart of AUD/USD, the price opened on 0.721 on Wednesday’s early session. Amidst the ongoing recession in Australia, other factors from the backdrops of other countries seems take a positive motion in the Aussie dollar. 

Although the greenback has strengthened at the start of this week’s trading session, the Aussie was able to get back on its feet on Wednesday signaling a possible phase 2 of the uptrend. We can see that the uptrend still holds its ground since the sell-offs in March and it may continue to rally up until the previous resistance. 

Traders are eyeing out the risk catalysts that are spread by other countries such as the U.S. and UK-EU Brexit conflicts hoping it will strengthen the Aussie dollar once again and break past the resistance level at 0.741.  

 

 

Don’t forget to follow and subscribe for more updates about market trends, analysis, forex news, strategies and more!  

Do you want to learn more about forex trading? Sign up now on our FREE forex webinar and reserve your FREE seats while it still lasts!  

 

Risk Disclaimer:  

Information on this page is solely for educational purposes only and is not in any way a recommendation to buy or sell certain assets. You should do your thorough research before investing in any type of asset. Learn to trade does not fully guarantee that this information is free from errors or misstatements. It also does not ensure that the information is completely timely. Investing in the Foreign Exchange Market involves a great deal of risk, resulting in the loss of a portion or your full investment. All risks, losses, and costs associated with investing, including total loss of principal and emotional distress, are your responsibility. 

Don’t forget to follow and subscribe for more updates about market trends, analysis, forex news, strategies and more!  

 

You may also like to read:

Please Leave a Comment

Your email address will not be published. Required fields are marked *