Asian Open: AUD/USD probes the October higher ahead of RBA

Monday US cash market close:

The Dow Jones Industrial rose 201 points (0.3%) to close at 34,921.88
The S&P 500 index rose 36.78 points (2.51%) to close at 34,058.75
The Nasdaq 100 index rose 298.369 points (2.01%) to close at 15,159.58

Asian futures:

Australia's ASX 200 futures are up 27 points (0.36%), the cash market is currently estimated to open at 7,540.70
Japan's Nikkei 225 futures are up 160 points (0.58%), the cash market is currently estimated to open at 27,896.47
Hong Kong's Hang Seng futures are up 144 points (0.64%), the cash market is currently estimated to open at 22,646.31
China's A50 Index futures are up 96 points (0.69%), the cash market is currently estimated to open at 14,105.59

Not so long ago, headlines of new sanctions on Russia and accusations of war crimes would have weighed heavily on sentiment (and on technology stocks, in particular). But the fact the Russia is yet to turn off the gas tap to Europe alongside news that Elon Musk has purchased a 9.2% stake in Twitter appears to have triggered a risk-on rally overnight, with indices, commodities and bond yields moving broadly higher.

The Nasdaq rose 2% and closed back above 15,000. Friday’s bullish hammer respected the 200 and 110-day eMA as support which makes it a likely swing low, so we’re now seeking a break above last Tuesday’s high to assume bullish continuation. The S&P 500 rose 0.8% although seven of its 11 sectors declined, led by utilities and healthcare.

ASX 200:

The positive lead from Wall Street is likely to bode well for the ASX 200 today, with technology and energy stocks likely contenders to take the lead. The ASX has rallied for the past three weeks and now stands a better chance of holding above 7500, a level it has meandered around over the past four sessions. The financial sector may come under pressure like its US counterpart, and price action on the sector does appear to be carving out a topping pattern. The consumer discretionary sector appears to have set a swing high last week and momentum is now pointing firmly lower for the sector.

ASX 200: 7513.7 (0.27%), 04 April 2022

Utilities (1.08%) was the strongest sector and Consumer Disc (-0.86%) was the weakest
6 out of the 11 sectors closed higher
5 out of the 11 sectors closed lower
6 out of the 11 sectors outperformed the index
130 (65.00%) stocks advanced, 62 (31.00%) stocks declined

Outperformers:

+9.71% - Magellan Financial Group Ltd (MFG.AX)
+9.00% - Liontown Resources Ltd (LTR.AX)
+7.96% - Novonix Ltd (NVX.AX)

Underperformers:

-3.25% - Fletcher Building Ltd (FBU.AX)
-3.18% - Bank of Queensland Ltd (BOQ.AX)
-3.01% - Aristocrat Leisure Ltd (ALL.AX)

Talk of fresh sanctions pushes energy prices higher

Natural gas hit a 9-week high and tracked oil prices on talks of fresh sanctions. WTI futures closed back above $100, reached (and exceeded) our $103 target to reach a high of nearly $104. But as daily trading activity was its lowest in over two weeks, we suspect it may be a mild short-covering rally. So bulls would be wise to tread with caution until volumes improve.

AUD/USD probes resistance ahead of RBA

Commodity currencies were higher overnight, with AUD firmly in the lead and NZD in second place. AUD/JPY broke above the 92.33 high to trigger our bullish bias from yesterday’s report. AUD/USD printed a bullish outside day on the daily chart

The Aussie finds itself at an interest level ahead of today’s meeting. Yesterday’s bullish engulfing candle rallied from the 10-day eMA and probed the October high and trades within a bullish channel. Should the RBA cave and hint ever to slightly of a sooner hike, a move to (and possibly 0.7600) seems more then feasible. But the downside to this argument is that they generally do nothing exciting whatsoever ahead of a general election. So there’s a solid chance that bulls could be disappointed today and the Aussie pulls back from the October. But whatever happens, that AUD is at a pivotal leave ahead of a potentially binary outcome leaves the potential for a bullish and bearish setup around current levels.

Read our guide on the Australian Dollar

Up Next (Times in AEST)

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

Open a Forex.com account, or log in if you’re already a customer.
Search for the pair you want to trade in our award-winning platform.
Choose your position and size, and your stop and limit levels.
Place the trade.

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. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, 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 StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.