AUD Analysis and Talking Points
AUD/USD | Downside Momentum Stalling
A slew of domestic economic events are likely to dictate price action in the Australian Dollar. The currency has found a slight bid from 0.6770, however, upside is likely to be capped at 0.6800-05, which coincides with the 50DMA. The RBA are due to release their latest rate decision, however, given that the central bank slightly raised the bar for a near term rate cut, it is likely that the RBA maintains rates while also leaving the door open to further easing (RBA QE a Material Risk in 2020). Elsewhere, market participants will also digest the Q3 GDP and ANZ Job Advertisement data, whereby the latter is likely to provide further insight into the outlook for the labour market. On the technical front, while momentum indicators continue to point towards a bearish bias, this has stalled somewhat in recent session. That said, key support remains situated at 0.6700.
Labour Market Continues to Weaken
AUD/USD Price Chart: Daily Time Frame (April 2019 – Nov 2019)
AUD/NZD | Continues to Head Lower
The downtrend in AUD/NZD has shown little in the way of easing out following its break below the 200DMA (1.0569). As we highlighted in our prior report, rate differentials signaled a move towards 1.05 with risks of further losses as speculators continue to unwind their short positions in the NZD, which remain very extreme. Besides the 1.05 handle, near term support is situated at 1.0488, marking the 23.6% Fibonacci retracement. Given the size of the decline in recent weeks for AUD/NZD we look for 1.0450 for a potential bounce back amid the RSI hovering in oversold territory.
AUD/NZD Price Chart: Daily Time Frame (April 2018 – Nov2019)
— Written by Justin McQueen, Market Analyst
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