Australia 200

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?

We're on the lookout for any hawkish undertone in today's RBA minutes - given the RBA's statement was deemed to be less hawkish than expected. Failure to do so could see AUD/USD hand back some of it's gains. The Nasdaq is also following its seasonaly tendency to rise into Thanksgiving.

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.

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.

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.

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.

Australia’s September jobs report is arguably the most important G10 FX data release in the world on Thursday, ensuring there’ll be significant interest among AUD/USD and ASX 200 traders.

For ASX 200 and AUD/JPY, until the geopolitical situation in the Middle East improves, adopting a sell-on-rallies approach remains the most appropriate strategy for those and other cyclical asset classes.

Dip-buyers in AUD/USD and ASX 200 were provided a reminder that the path of least resistance remains lower short-term with both hammered on the back of a hot US “supercore” services inflation number in September.

Money markets are betting the Fed rate hike cycle is over with up to 100 basis points of cuts expected in 2024, boosting cyclical assets classes such as the ASX 200 and AUD/JPY.

An uneventful year for the ASX 200 could be about to get a lot more exciting with the index perilously close to breaking long-run uptrend support dating back to the start of the coronavirus pandemic.

AUD/USD is once again refusing to play nicely with breakout traders, after recouping half of yesterday's post-China data losses and recovering back above last week's lows. It is often referred to 'the battler' with good reason. The question now is whether it can continue to defy bears and muster up the strength to break above 66c to suggest a larger bullish move is underway. And inflation reports from China and the US could be key.

USD/JPY formed a bearish engulfing candle yesterday to suggest all is not well around the cycle highs. Beyond that, it is likely down to NFP as to where USD/JPY finishes the week. We also look at a potential bullish setup on the China A50 which is 'turned the bearish ship around' since we noted its failure to break beneath 12,400 (despite negative sentiment).

AUD/USD fell to an 8-week low, US indices are on track for bearish engulfing weeks and even gold closed the day lower during a risk-off session. The question in my mind as we approach the weekend is whether we’re witnessing a knee-jerk reaction to the US credit-trading downgrade and are at risk of prior trends returning, or whether it is the beginning of something more sinister.

The RBA will be keeping a close eye on today's employment figures from Australia. If they continue to outperform then it keeps some pressure on the RBA to at least strike a hawkish tone at their next meeting, or potentially hike if next week's inflation figures are too hot. And that places AUD pairs in focus, and today we're looking at a potential long setup on AUD/JPY at the lower end of its trading range.