AUD/USD poised to move amid key Australian and US economic data
James Chen, CMT January 10, 2018 2:27 PM
The US dollar fell on Wednesday after reports emerged that China may be considering either a slowdown or halt to its purchases of US treasuries. This resumption of US dollar weakness helped prompt a short-term rebound for the AUD/USD currency pair ahead of key economic data from both Australia and the US.
From a major support level around 0.7500 back in early December, AUD/USD has been entrenched in a sharp incline for the past month as the US dollar has fallen sharply against its rivals and the Australian dollar has been on a solid rebound. Last week saw the currency pair reach a resistance high around the 0.7875 resistance area before pulling back down near 0.7800 support earlier this week as the US dollar made a modest rebound. With Wednesday’s resumption of weakness in the US dollar, AUD/USD has bounced from the 0.7800 area and could be on track for further gains if the US dollar remains under pressure.
Looking ahead in the short-term to relevant economic data, Australia releases retail sales numbers for November on Thursday. The forecast is for a 0.4% increase in retail sales after the previous month’s better-than-expected 0.5% increase. From the US, Thursday and Friday feature key inflation data for December that may influence the Federal Reserve’s monetary policy outlook, including the Producer Price Index (+0.2% expected), Core PPI (+0.2% expected), Consumer Price Index (+0.1% expected), and Core CPI (+0.2% expected). Also to be released on Friday will be December’s US Retail Sales (+0.5% expected) and Core Retail Sales (+0.4% expected). And Thursday of next week will be focused on key jobs data for December out of Australia.
Ahead of these releases, AUD/USD is currently taking a breather within the context of its month-long bullish trend. Presently trading within a relatively tight range between two key price areas – 0.7875 to the upside and 0.7800 to the downside – the upcoming economic releases are poised to prompt a significant move for the currency pair. With any further US dollar weakness or Australian dollar strength that results in an AUD/USD breakout above 0.7875-area resistance and a resumption of the bullish trend, the next major upside targets for AUD/USD are around the key 0.8000 and 0.8100 resistance levels.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.