-1712227184.png)
Aussie on The Up
The Australian Dollar is tearing higher against USD today as the weakness in the greenback continues to drive movements across FX markets. With traders now leaning into the prospect of a June rate cut USD has been on the backfoot this week, reversing from initial highs. The move has of course benefited high-beta currencies most and the commodity linked Aussie looks to be a solid long-choice if further USD weakness is anticipated. The RBA has so far held rates unchanged and while easing is expected as the next course of action, the bank has yet to give any signal on timing.
China Data Helping
Alongside the weakness in USD, the Aussie is also benefiting from better China data seen this week. Given China’s status as Australia’s biggest trading partner, any uptick in Chinese data tends to benefit the Aussie. With this in mind, the current backdrop looks likely to see AUD remain supported near-term.
US Jobs On Watch
Looking ahead this week, tomorrow’s US jobs report will be a key determinant of near-term Aussie direction. Given the building dovish Fed expectations, weakness in tomorrow’s data should amplify USD selling, boosting risk assets across the board, including the Aussie. Undershooting on the headline NFP would mark the first such miss in several months and would be firmly bullish for AUDUSD into next week.
Technical Views
AUDUSD
With the market rebounding higher off the bullish trend line and the latest test of support at .6520, the outlook looks bullish once again. Momentum studies are turning higher and we are seeing the pair potentially carving out a large inverse head & shoulders pattern, suggesting room for a broader bullish reversal. Near-term, a break of .6681 should open the way for a test of .6857 next.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.