AUD/USD

USD/JPY tumbled on Thursday on speculation the BOJ may move pre-emptively to lift interest rates before wage pressures have materialised. Such a move would be economically risky and go against recent BOJ statements.

AUD/USD and EUR/USD are looking vulnerable on the charts, pulling back in recent days on the back of disappointing domestic economic data. With uncertainty over the US, Eurozone and Chinese economic outlook elevated, it comes across as the type of environment in which the US dollar would normally shine.

AUD/USD continued lower for a second day after momentum turned at a key resistance level. But if seasonality remains true, it could be on for a better performance in the second half of the month. And whilst crude oil touched a 5-month low, we're on guard for a technical bounce before its next leg lower towards $70.

The question now for AUD/USD and ASX 200 is whether the tone truly reflects what the RBA is thinking, or will we see a repeat of recent months where subsequent commentary has been far more hawkish in nature?

AUD/USD was the strongest performer among the Aussie pairs we track in November. A combination of hawkish RBA alongside bets of Fed cuts in 2024 played nicely with our long bias. What will December bring?

Chinese economic activity is nearing stall speed with the government’s purchasing managers indexes (PMIs) falling further in November, surprising markets to the downside for a second consecutive month.

The US PCE inflation report is arguably the event of the week, and with traders having vigorously sold the US dollar ahead of it I am left wondering if it is a case of ‘sell the rumour, buy the fact’ – especially if it comes on hot. And with AUD/USD and gold stalling around key levels on Wednesday, the potential for mean reversion seems apparent.

With USD/CNH and USD/JPY probing key support levels, we may require a break of them for AUD/USD to stand a chance of continuing its strong rally (which met strong resistance on Tuesday). Unless of course Australia is treated to an uncomfortably hot inflation report today, which could fan fears of another RBA hike.

With a bullish engulfing week and day for AUD/USD on Friday, can the Aussie muster up the strength for a breakout above key resistance? And if losses on USD/CNH are anything to go by, perhaps USD/JPY is preparing to follow suit.

Whilst AUD/USD failed to hold onto its breakout gains seen on Wednesday, it may stand a better chance today if employment data is punchy enough. And crude oil bears have returned from their short hiatus to drive prices lower from $80 resistance.

Hopes that the Fed have reached their terminal rate were revived with a softer-than-expected US inflation report. Earlier comments from Fed officials (namely Powell) had rekindled concerns that the Fed may have another hike up their sleeve, yet with CPI and core CPI reads all undershooting consensus estimates, risk-on returned in a big way.

Large speculators increased their gross-long exposure to AUD/USD futures by 17.1% and trimmed shorts by -2.9% on the day of the RBA’s last hike. And this could be a significant development when you consider net-short exposure recently hit a record level of bearishness just six weeks ago, yet prices defied bears with a sustainable break beneath 63c.

WTI crude oil rose for a second day after the monthly OPEC report played down demand concerns and blamed speculators for oil's recent decline. A move to $80 at a minimum or $83 could now be on the cards. We also have a near-term bullish bias on the ASX 200.

The S&P 500 continues to defy gravity and appears on the cup of breaking above a key resistance level. And whilst AUD/USD fell for five days last week, it is fast approaching a key support level that has been favourable to dip buyers in recent times.

AUD/USD and gold have struggled in November, giving back some of the gains achieved in late October. With both sitting near key levels, we look at the prospects for a bounce or extension of the pullback in the days ahead.

WTI fell over 4% to a 4-month low on Tuesday after slicing through $80. AUD/USD was also the weakest FX major after the RBA's statement lacked the level of hawkishness traders were seemingly positioned for.

Traders believe the RBA is one-and done when it comes to the restart of its tightening cycle, jumping to the conclusion the 25 basis point rate hike to 4.35% will likely be the last. AUD/USD fell while the ASX 200 rallied.