1 aud in usd

Labour market indicators suggest that 25bp rate hikes may not be enough to bring inflation swiftly back within the RBA's target range Reserve Bank of Australia Governor Philip Lowe Source: Shutterstock 3.9% Unemployment rate Record low As expected Unemployment rate falls to record low Today's April labour market data showed a smaller than expected gain in total employment of only 4000. But as this was the net result of what looks like a huge transformation of part-time jobs to full-time jobs, the impact on consumer demand will be far more than this headline employment figure suggests. Full-time employment rose by 92,400, just exceeding the 88,400 decline in part-time jobs. But in addition to longer hours, full-time jobs tend to be better paid, and also offer more perks and job security, all of which are likely to encourage greater spending.  Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Perhaps even more importantly, the unemployment rate fell to 3.9% from 4.0%. This is a new record low, and suggests that the labour market is very, very tight. Wages, inflation and the unemployment rate Source: CEIC, ING Labour data more of a marginal consideration now Before the Reserve Bank of Australia (RBA) responded to the recent surge in inflation with a 25bp increase in the cash rate target, labour market data was scrutinized for signs that the central bank's dovish resolve would be challenged. Now that rates have already been raised, that is no longer the case. But labour market data is not irrelevant. Today's drop in the unemployment rate to a new record low, even alongside the relatively more subdued 1Q wage data released yesterday, raises questions about the pace of future hikes.  The question worth pondering is this: "Does it make sense to raise rates in 25bp increments when the inflation rate is so far above target, and so far above the level of policy rates? Or does it make more sense to front-run the early tightening?" Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM A number of other central banks in the Asia Pacific region are having the same internal conversation right now, having emerged from a similar period of dovishness assuming that most of the inflation spike would be transitory, or largely bypass their economies for various reasons. The consensus of these other central banks seems to be swinging behind a more rapid pace of withdrawal of accommodation, at least for a while. Rate hikes from the RBA in excess of 25bp in the near future can't be ruled out either.   Read this article on THINK TagsRBA rate policy Australian wages Australian unemployment rate Australian inflation AUDUSD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Follow FXMAG.COM on Google News

Summary:  The US dollar found only very modest support on Friday as US equity markets plumbed new cycle depths. As risk sentiment rebounded Friday and carried through higher to start the week today, the USD selling has become more aggressive. The fact that risk sentiment has only rebounded since Friday while the US dollar has been selling off for nearly two weeks suggests that US treasury yields, which peaked slightly ahead of the USD, may be the dominant market driver. FX Trading focus: Rates trump risk sentiment as USD driver. As noted on Friday, the near-term focus for FX traders is where and when the USD finds support, if it is going to find support. I suspect that the USD will only properly roll over for the cycle once the Fed has turned back toward easing – at least in a relatively sense, and perhaps this only becomes clear as a reduction in the perceived end-point of this rate hike cycle. In that sense, the market seems in a rush to declare that we have reached that point and that inflation is set to fade from here. Breakeven inflation rates peaked back In late March and have really swooned since the beginning of May. Yields at the short end of the US yield curve remain elevated, but are below the peak reached just before Fed Chair Powell took jumbo hikes of greater than fifty basis points off the table at the May 4 FOMC meeting. The longer end of the US yield curve has consolidated even more and I suspect the combination of the easing back of US yields and inflation expectations, combined with hefty long-USD speculative positioning, that have the USD on its back foot. I have a hard time that peak Fed rate expectations are in the rear view mirror a week before actual quantitative tightening has even begun, but let’s see From here, there is still some room for the USD to fall further without reversing the well-established bull trend, but the comfortable (for USD bulls) portion of that room has been about reduced by half in today’s trade. The yield-fixated USDJPY is in its own category (given BoJ yield-cap policy and the enormity of the move since the pair broke above the 116.35 range top back in March) . For other major USD pairs, the next major area for EURUSD is into 1.0800+, for USDCHF is 0.09525, for USDCAD last gasp support is into 1.2660-1.2715, AUDUSD is discussed below. GBPUSD has a little resistance at the 1.2638 pivot high, but has a lot more wood to chop to suggest a trend reversal, as this downtrend started on the break below 1.3000. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Chart: AUDUSD The AUDUSD has carried through higher after bobbing back above the pivotal 0.7000 level, one that has served as both support and resistance on many occasions since early 2019. Supporting the AUD are the structural shift in the country’s external imbalances for the better, the recent rebound in risk sentiment, a solid recovery in some industrial metal prices associated with Australia’s traditional export mix, and hopes that China is set to stimulate. Working against the Aussie’s favor are a new left turn from the Australian government at the margin, rising concerns that the global economy is set to slow, and the risk that we are far from the end of the asset market deleveraging cycle. From here, bears, for an ideal fresh trading hook, need a quick rejection of today’s action and for the price action to dip back below 0.7000. On the flipside, if this rally persists into 0.7250+ area (most recent major pivot high in that area and just ahead of the 200-day moving average) the latest down-wave would have been rejected and this would suggest the softening up of the bearish risk has been neutralized for now – the next figure (100 pips) in either direction looks very important here for the pair. Source: Saxo Group ECB President Lagarde was out jawboning today on rate outlook, with her comments largely rhyming with market expectations, therefore triggering a modest pick-up from intraday lows in forward ECB expectations, but a rather more pronounced reaction in the euro itself, especially as EURUSD cleared the local pivot high of 1.0642. She basically spelled out that the ECB will hike in July due to the winding down of asset purchases and in saying that a negative interest rate policy will be over by late Q3, suggests that another hike will come at the September meeting. As background concerns continue to plague the Chinese economic outlook and a rise in Beijing Covid case counts has driven new fears of widening lock downs there, China has been out today touting new measures to encourage activity resumption elsewhere and other easing measures in the works, including SME loans and a tax cut on car purchases. Sentiment in general has also gotten a boost from increasing chatter that US President Biden could be set to roll back some of the China tariffs in the all-out effort to get inflation readings down ahead of the US mid-term election in November. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Table: FX Board of G10 and CNH trend evolution and strength.For the trend window the FX Board operates with, the USD bull-trend has effectively been erased. As emphasized above, some USD charts still have more room to allow the USD to consolidated lower, but clearly USD bulls are down if not yet out. Otherwise, it is clear we are in flux when no trend reading has an absolute valuer greater than 2 save for NOK. By the way, Poland’s prime minister has been the first politician (that I have noticed) to call for Norway to share its windfall gains from high energy prices. Interesting to watch the political optics on this issue – certainly a forward risk for NOK. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.EURUSD is trying to cross into a positive trend reading today, but note that the chart context is important for trend status and the downtrend is so entrenched that it is too early to bite on this move. Likewise for USDCHF, although the USDCAD chart looks more credibly bearish on a weak close today. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Apr. Chicago Fed National Activity Index 1415 – ECB's Holzmann, Nagel to speak 1415 – UK Bank of England Governor Bailey to speak 1430 – ECB's Villeroy to speak at Davos 2245 – New Zealand Q1 Retail Sales  2330 – US Fed’s George (voter) to speak Source: Saxo Bank

EURUSD longs at support at 1.0560/40 worked perfectly & so did buying a break above 1.0600 as we hit the 1.0670/80 target, reaching 1.0697. This week we could reach as far as 1.0800. I think the downside should be limited with minor support at 1.0650/40 & strong support at 1.0620/00. AUDUSD rallied from 7036 targeting 7095/99, with a high for the day just 8 pips from very strong resistance at 7135/55. Shorts need stops above 7175. Minor support at 7050/45, strong support at 7030/20. Longs need stops below Holding below 7000. A break lower however targets 6940/30. NZDUSD broke higher for a buy signal targeting 6490/6500, with a high for the day here. First support at 6420/00 on this dip. Longs need stops below 6385. Longs at 6420/00 target 6470 & 6490. Above 6500 look for 6520/30. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk

USDCHF struggles for bids The Swiss franc rallied further after the SNB said it would tighten if inflation persisted. The pair has given up more than half of its gains from the past month. A fall below 0.9710 which sits on the 30-day moving average has put the bulls on the defensive. The discount and the RSI’s repeatedly oversold condition may attract some bargain hunters, but buyers need to clear the support-turn-resistance at 0.9710 before a rebound could take shape. On the downside, a break below 0.9570 would deepen the correction to 0.9500. AUDUSD tests resistance The Australian dollar continues to recover as commodities bounce higher. The rebound gained traction after it broke above the first resistance at 0.7050. A combination of short-covering and fresh buying has sent the aussie to the key supply zone near 0.7160. A bullish close would send the pair 100-pip higher to the last hurdle at 0.7260, the bears’ stronghold on the daily chart. Strong selling pressure could be expected due to bearish inertia. The psychological level of 0.7000 is the first support. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM EURGBP attempts bullish reversal The euro continues higher fuelled by the ECB’s latest hawkish hint. Sentiment stayed bullish after the pair found support over 0.8400. A pop above 0.8530 suggests that sellers scrambled to cover their positions. The RSI’s overbought situation may temper the upward drive momentarily. As the dust settles, the bulls may look to accumulate above 0.8500 ahead of their final breakout attempt. A close above 0.8620 could trigger an extended rally above 0.8720, setting the tone for a bullish reversal in the medium-term. Follow FXMAG.COM on Google News

Recession jitters send US dollar lower The US dollar eased once again overnight, as US recession fears continue to lead to a repricing lower of Fed tightening expectations. With quantitative tightening starting next week and no signs of inflation falling, that may be more hope than reality. Nevertheless, one must respect the momentum in the short term, and the US dollar bull market correction still looks to have legs in it. ​ The dollar index fell by 0.32% to 101.77 overnight, but Asia is doing its usual countertrend moves today, pushing the dollar index back up to 101.95. The multi-year breakout line is at 102.40 today, forming initial resistance, while 101.50 and 101.00 loom as immediate supports. EUR/USD continued edging higher overnight, rising 0.42% to 1.0735 before falling by 0.28% to 1.0705 in Asia. Momentum already appears to be waning for EUR/USD, but I do not rule out at least a test of 1.0750 and 1.0825, the multi-decade breakout line. A weekly close above the latter is needed to suggest a medium-term low is in place. GBP/USD fell overnight, crushed by EUR/GBP buying, poor data and tax and political risk. It finished 0.42% lower at 1.2535 where it remains in Asia today. Sterling faces political risks, outlined above, today, and these will limit gains. It now has support at 1.2470, with a double top now at 1.2600. Even if the US dollar sell-off continues, sterling will remain euro’s poor cousin. AUD/USD remains steady at 0.7100 today, having probed the downside overnight Lower US yields saw USD/JPY fall 0.85% to 126.85 overnight where it remains in Asia, just below support, now resistance, at 127.00. A deeper selloff, potentially targeting the 125.00 support area, remains entirely possible given the market is still clearly very long USD/JPY. Once again, at those levels though, given the trajectory of US and Japan interest rates, being short becomes a dangerous game. AUD/USD remains steady at 0.7100 today, having probed the downside overnight. AUD/NZD buying is capping gains for now. A hawkish RBNZ today has sent the Kiwi dollar flying, NZD/USD jumping 0.65% to 0.6500. The rally is already showing signs of fatigue and a weekly close above 0.6550 is required to signal a potential medium-term low. Support is distant at 0.6420. Asian FX continued gaining against the US dollar overnight, but a stronger greenback in Asian time has erased those gains. A neutral USD/CNY fixing by the PBOC has given Asian markets little to go on today, with USD/CNY, USD/CNH and USD/THB rising by around 0.30%, while USD/KRW has risen by 0.10%. An impending Bank of Korea hike on Friday should limit the won’s weakness. The Malaysian ringgit looks like the most vulnerable regional currency right now, USD/MYR trading near 4.4000 today. With policy tightening gaining momentum among other Asian central banks, today’s benign inflation data reinforced that outlook. USD/MYR could potentially test 4.4500 by early next week. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News

AUDUSD finally tests very strong resistance at 7135/55. Shorts need stops above 7175. First support at 7060/50 for some profit taking on shorts before the weekend with better support at 7020/10. Longs need stops below 7000. NZD/USD - New Zealand Dollar To US Dollar NZDUSD shorts at strong resistance at 6505/25 need stops above 6545. A weekly close above here is a buy signal for the start of next week. Shorts at strong resistance at 6505/25 target 6475 & 6450/40, perhaps as far as 6410/00. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk

AUD/USD rose to the high of 0.7134 on Friday's Asian session following the release of Retail Sales data that matched market forecasts. The market assumes that it is due to the fresh monthly low of the US Dollar Index (DXY). How Weak US Dollar (USD) Can Affect AUD/USD? The weakness of the US Dollar Index may lift AUD/USD ahead of the US Core Personal Consumption Expenditure (PCE) Price Index for April later today, expected at 4.9% YoY versus 5.2% prior. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Follow FXMAG.COM on Google News

AUDUSD finally tests very strong resistance at 7135/55. Shorts need stops above 7175. A break higher this week is a buy signal targeting 7230/50. Shorts need stops above 7275. Shorts at 7135/55 target 7090 then 7060/50. Further losses test support at 7020/10. Longs need stops below 7000. USDJPY shorts at resistance is at 127.50/70 need stops above 127.80. A break higher is a buy signal targeting 128.20/30, perhaps as far as strong resistance at 128.70/90. Holding resistance is at 127.50/70 targets 127.20/00. A break below 126.80 targets 126.30/20 & eventually 125.80. EURJPY holding strong resistance at 136.50/70 (perfectly on Thursday & Friday) targets 135.60/50 for profit taking on shorts. Further losses target 135.35/25. If we continue lower look for 134.65/55 then strong support at 134.20/00 for profit taking on any shorts. We should have strong resistance again at 136.50/70. Shorts need stops above 136.95. A break higher targets 137.20/30 then 138.00/20. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM EURUSD longs at support at 1.0670/50 start to work on the bounce towards strong resistance at 1.0800/20 for profit taking. Shorts need stops above 1.0835. Support again at 1.0670/55. Longs need stops below 1.0640. Strong support at 1.0600/1.0590. GBPUSD made a high for the day 6 pips above strong resistance at 1.2640/60. Shorts need stops above 1.2680. A break higher this week is a buy signal initially targeting 1.2725/45. Shorts at 1.2640/60 target 1.2590, perhaps as far as 1.2555/45 for profit taking. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk Follow FXMAG.COM on Google News

Weekly Recap It was another bearish week for the US Dollar as the greenback continued to sell off from YTD highs. The FOMC meeting minutes, released mid-week, did little to inspire a fresh rally in the Dollar. While the minutes confirmed the Fed’s hawkish stance and reinforced expectations for further 50bps hikes in June and July, there was little in the way of exciting details to get bulls reinvigorated. Additionally, with the Fed having seemingly turned more hawkish since that meeting, the minutes felt a little outdated. Christine Lagarde, ECB And Rate Hikes On the data front, a string of weaker-than-expected indicators out of the eurozone heightened growth concerns. With ECB’s Lagarde essentially confirming a July rate-hike, recession fears weighed on European asset markets though EUR itself remained well bid. Elsewhere, equities markets generally saw a choppy week though most indices ended the week in the green, benefitting from the weaker US Dollar. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM BOE’s Bailey warned that further rate hikes will likely be necessary in the face of rising inflation. The new fiscal package announced by the UK government this week, aimed at helping households fight rising energy bills, has further increased the likelihood of BOE rate hikes in the near-term. Weaker Dollar, Stronger Crude, Gold And Silver Commodities prices were higher over the week also. Gold, silver and oil all rallied on the back of a weaker US Dollar. With monetary policy divergence between the Fed and other central banks drying up, USD pressure has helped commodities stay afloat recently. Coming Up This Week Australian GDP Australian GDP will be closely watched this week on the back of the recent RBA rate hike. With the bank lifting rates and sounding firmly hawkish in its outlook and assessment, this week’s data might further support growing RBA rate hike expectations. With the country having emerged from one of the longest lockdowns of the pandemic, the economy has been on the bounce-back. However, as we have seen elsewhere, the economy has still been rocked by rising inflation and supply constraints. Traders will be keen to see the extent to which these factors weighed on the economy over the last quarter. BOC Rate Decision The BOC is widely expected to raise rates when it convenes for this month’s meeting mid-week. All 30 economists polled by Reuters ahead of the event are looking for a .5% hike. With this in mind, the focus will be on the bank’s forward guidance. If the BOC gives a clear signal that further hikes are coming in the near future, this should drive CAD higher near-term. However, if there is any indication that the BOC might look to hold off on any further rate hikes near-term, this will likely see cad dragged lower. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM US Non-Farm Payrolls The latest set of US labour market indicators this week will be closely watched as we head to the June meeting. Recent Fed commentary has been decidedly hawkish and it would likely take a major downside shock to change this narrative. Even then, it certainly wouldn’t impact the June rate hike and would likely only factor in forward guidance issued by the Fed. Still, with slowdown fears building, any weakness would no doubt act as a headwind to risk sentiment in the short-term. Forex Heat Map Technical Analysis Our favourite chart this week is the Dollar Index (DXY) The DYX has pulled back from recent multi-year highs and is now sitting on a make-or-break level at 101.94. This level was the 2020 closing high price. While the level holds as support, DXY is likely to recover and continue the longer-term bull trend. Below here, however, there is room for the correction to develop further towards next support at 100.37 Economic Calendar Plenty of key data releases to keep an eye on this week including Australian GDP, BOC rate decision and US Non-Farm Payrolls to name a few. Please see full calendar below for the complete schedule . Follow FXMAG.COM on Google News

Still improving risk sentiment sends US dollar lower The US dollar declined once again on Friday as improving risk sentiment continues to unwind the 2022 US dollar rally. That has spilt over into Asian markets today, with regional currencies booking some decent gains versus the greenback this morning. On Friday, the dollar index edged 0.12% lower to 101.64, losing another 0.13% to 101.50 in Asia. Support remains at 101.00, with resistance at 102.50. EUR/USD EUR/USD held steady on Friday, closing almost unchanged at 1.0735, with US dollar weakness being reflected in EMFX and the commonwealth currencies. It has gained 0.20% to 1.0755 in Asia, but overall, seems locked in a 1.0700 to 1.0800 range. Oil’s rally may temper single currency gains, with the multi-decade breakout line, today at 1.0830, still a formidable barrier. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM GBP/USD GBP/USD closed 0.20% higher at 1.2630 on Friday, adding another 0.14% to 1.2640 in Asia. GBP/USD looks set to trade in a noisy 1.2600 to 1.2700 range as the week gets underway. The government’s cost of living package may prompt faster BOE tightening, supporting the downside, while the economic slowdown continues to slow upside progress. USD/JPY USD/JPY is trading sideways, ranging each side of 127.00 as US yields trade in narrow ranges. That is likely to continue with US bond markets closed today. The chart suggests USD/JPY has further downside potential that could target 125.00. Only a move through trendline resistance at 127.80 changes the picture. AUD/USD & NZD/USD AUD/USD and NZD/USD continue to be driven entirely by swings in global risk sentiment. Another strong performance by Wall Street on Friday maintained that upward momentum and both AUD and NZD were prime beneficiaries. AUD/USD rallied by 0.85% to 0.7160, adding another 0.20% to 0.7175 today. It has resistance at 0.7260, and support at 0.7100. NZD/USD rose by 0.86% to 0.6536 on Friday, rising another 0.17% to 0.6547 today. Resistance nearby at 0.6570 opens a larger rally to 0.6650, with support at 0.6475. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Asian FX rode improving investor risk sentiment higher on Friday, moves reflected throughout the EM space. Gains were led by the Chinese yuan, Korean won, and New Taiwan dollar, all gaining around 0.70%, while even the beleaguered Malaysian ringgit out in a good show, USD/MYR falling to 4.3770. Both the Indonesian rupiah and the Malaysian ringgit should find further strength on higher oil prices, even though it increases their domestic subsidy bills. Oil’s strength is likely the reason the Indian rupee has remained unchanged from Friday through today. CNY, KRW and NTD are rallying strongly today, likely boosted by China’s reopening hopes. USD/CNY, USD/KRW, and USD/NTD have fallen by around 0.80% today. However, if oil prices continue to rise this week, the rally in energy-importing Asian currencies may run out of steam. Follow FXMAG.COM on Google News This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

EU partial ban on oil and hawkish commentary from Fed's Waller were the headlines with the US out on holiday. Indian GDP for 1Q22 out later.  Source: shutterstock Macro outlook Global: With the US out on vacation yesterday, there isn’t too much overnight catch-up to do for Asia, though commodity markets are responding to the partial EU ban on Russian oil agreed upon yesterday. FX markets continued their recent gains against the USD though. EURUSD  has now risen to 1.0787, bringing it close to resistance levels just above 1.08. The AUD also continued to make gains, and is currently flirting with 0.72. Within the Asia FX pack, the KRW led the charge, shooting lower to 1238, with the CNY close behind in terms of gains at 6.66. Despite the holidays, the Fed’s Waller struck a more hawkish tone at a speaking engagement than his colleague, Raphael  Bostic, who had recently advocated a possible September pause in hikes. Waller, in contrast, suggested that 50bp hikes should remain on the table until inflation was closer to 2%. Newswires continue to run with stories looking for the trough in the equity sell-off, but also suggesting that the bond sell off is also over. One of those views is likely to be wrong. But whichever is the case, it is a good reflection of the current market sentiment which is looking for turning points. More choppiness ahead seems likely as a result. It is a relatively light day for G-7 macro data today. The EU’s May inflation should show a rise from 7.5% to 7.8%. But ECB rate hike intentions have been clearly flagged for now, so this shouldn’t make too many ripples. And in the US, we have house price figures and consumer confidence numbers. Consumer confidence has barely any correlation with consumer spending, so we can probably give it only a cursory examination. House prices appear to be reaching a peak in year on year growth, but until or unless they show a marked reversal in direction, can probably also be glossed over. India: 1Q22 GDP, which is released at 8pm SGT tonight, should come in at about 4.0%YoY (consensus is 3.9%YoY). That should bring the annual fiscal-year GDP growth for 2021/22 to 8.7%. For the 2022/23 fiscal year, we are forecasting 7.2% GDP growth. Rising prices and tighter monetary policy as well as global disruptions and a less helpful base comparison account for the apparent slowdown.  China: Official PMIs will be released this morning. We expect both the manufacturing and non-manufacturing PMIs will come in under 50, i.e. signalling monthly contraction. That result will mainly reflect the fact that Beijing was in lockdown for most of May, adding extra pressure on activity while Shanghai was also still in lockdown. Unemployment should remain high and will add uncertainty to the non-manufacturing PMI even if Shanghai residents resume work and production starting from 1st June.   Korea:  April monthly activity data signals that China’s lockdown dragged down Korean manufacturing production while local reopening supported services, construction, and consumption activity. Manufacturing production plunged -3.3%MoM (vs -1.3% market consensus), the first monthly drop in seven months. Meanwhile, the construction and services sectors rose modestly for the second straight month, with notable rises in hotels & restaurants and personal services (11.5% and 8.7%) respectively. Consumption fell -0.2% but mainly due to a decline in pharmaceutical consumption, while durable goods, including automobiles, rose slightly. Overall, the April data was on weak side, yet the recent approval of a supplementary budget (62 trillion KRW) and the reopening of China should boost the recovery in the coming months.  Japan: April Industrial production fell -1.3% MoM sa (vs -0.2% market consensus) the first fall in three months, with China’s lockdown hampering supply chains and production activity. However, consumer sales were relatively sound with retail sales and department store sales up by 2.9% YoY and 4.0% respectively. Meanwhile, labour conditions also improved. The jobless rate in April dropped to 2.5% (vs 2.6% market consensus and March) and the job-to-application ratio ticked up to 1.23 (vs 1.22 in March). We ought to be on the watch for tighter labour market conditions leading to wage growth, which is the key that the Bank of Japan has been looking for to gauge a sustainable inflation trend. What to look out for: EU inflation and US non-farm payrolls South Korea industrial production (31 May) Japan retail sales and job-applicant ratio (31 May) China PMI manufacturing (31 May) Thailand trade balance (31 May) Eurozone CPI inflation (31 May  US Conference board expectations (31 May) South Korea trade (1 June) Regional PMI manufacturing (1 June) Australia 1Q GDP (1 June) US ISM manufacturing (1 June) Indonesia CPI inflation (2 June) Australia trade balance (2 June) US ADP jobs, initial jobless claims, durable goods orders (2 June) South Korea CPI inflation (3 June) US non-farm payrolls and ISM services (3 June) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The Australian dollar is in calm waters this week, as AUD/USD trades quietly just below the 0.73 level. GDP slows to 0.8% Australia’s Q1 GDP slowed to 0.8% QoQ, after a massive 3.6% QoQ gain in Q4 of 2021. Investors were braced for a softer release after the impressive Q4 surge, and the Q1 reading actually outperformed, beating the estimate of 0.5%. This has resulted in a muted response to GDP, with the Aussie edging slightly higher. The whipsaw movement in GDP makes it difficult to predict the underlying strength of the economy. As far as the RBA is concerned, the respectable growth in Q1, which translates into 3.2% annualized growth, doesn’t interfere with its rate-tightening plans. Monetary policy has not focused all that much on GDP, with the RBA concentrating on the labour market, wage growth and inflation. The RBA holds its meeting next week, and is likely to tighten by another 25-bps, which would bring the cash rate to a (still low) 0.60%. Australia’s current account contracted to AUD 7.5 billion in the first quarter, down sharply from AUD 13.2 billion in Q4 of 2021. The decline was a strong increase in imports, which outstripped exports. This is consistent with strong retail sales, as consumers continue to spend in the follow-up to the removal of Covid restrictions. In the US, the Fed commenced quantitative tightening this week and the Fed continues to send out hawkish messages. Fed Governor Christopher Waller urged the Fed to continue its rate hikes and said that he supported raising rates above the “neutral level”, which is not supportive or restrictive for growth. The Fed estimates the neutral level around 2.5%, which leaves plenty of room for further hikes. Fed Chair Powell has signalled that the Fed will deliver 50-bps hikes in June and July, followed by a pause in September. AUD/USD Technical 0.7207 is under pressure in resistance. Above, there is resistance at 0.7252 There is support at 0.7121 and 0.7076 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

US dollar eyes nonfarm payrolls There was a wax on, wax off feel to currency markets overnight. Soft ADP Employment data spurring a risk-on rally across asset classes as the Fed hiking outlook was tempered. The US dollar staged a broad retreat, unwinding all its gains from the day before in the major space except for USD/JPY. Asian market volatility is being dampened by holidays across the region today, including mainland China and Hong Kong, and the UK later today.  US dollar loses all of its previous gains - MarketPulseMarketPulse The dollar index tumbled by 0.78% to 101.75 overnight, an exact reversal of the rally from the day before. It is unmoved in Asia and support/resistance lies at 101.40 and 102.70. Its fate will be decided by this evening’s US Non-Farm Payrolls.   EUR/USD reversed all its previous day’s losses, rising 0.91% to 1.0750 where it remains in Asia. Resistance between 1.0770 and 1.0830 remains a formidable barrier, with support at 1.0650. Sterling reversed all its previous day’s losses, rising 0.75% to 1.2575 where it remains in Asia. It has support/resistance at 1.2460 and 1.2670. USD/JPY was almost unchanged at 129.85 as US bond yields barely moved. It remains unchanged in Asia. It has support/resistance at 129.00 and 131.30. Their fate will be decided by this evening’s US Non-Farm Payrolls.   AUD/USD staged a bullish outside reversal day overnight, making a new low before closing higher than the high of the day before, thanks to the broad-based risk-on rally after the US data. It leapt 1.27% higher to 0.7260 overnight where it remains today. AUD/USD has support at 0.7150, and the overnight rally took it above its 50/100/200-day moving averages (DMAs) between 0.7230 and 0.7255 as well. A soft Non-Farm print tonight could see AUD/USD rise to test 0.7350, with a weekly close at these levels being a bullish signal technically. Its fate will be decided by this evening’s US Non-Farm Payrolls.   Asian FX currencies booked modest gains overnight, with the rise in oil prices tempering the fast money inflows. Both the Malaysian ringgit and Philippine peso actually fell overnight, a result I suspect, of rising subsidy bills as oil prices climb higher. The Indonesian rupiah has rallied 0.70% to 14,420.00 today, while the KRW and MYR have risen by 0.10%. With a swathe of holidays across the region today, and no PBOC USD/CNY fixing, Asian markets look content to watch from the sidelines as we head into US data this evening and the weekend. Their fate will be decided by this evening’s US Non-Farm Payrolls. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. https://www.marketpulse.com/20220603/us-dollar-loses-all-of-its-previous-gains/

US dollar pares gains from NFP report Friday’s higher Non-Farm Payroll data saw the US dollar reverse much of its losses from Thursday, characterising a very choppy back-and-forth week last week. The dollar index rose by 0.40% to 1.0217, leaving the index slightly higher for the week. Notably, the rally was not enough to lift the index above its 102.35 pivot point, suggesting that the downside remains the path of least resistance still. Support/resistance lies at 101.30 and 102.70. In Asia, the China reopening trade has pushed the index slightly lower to 102.11.  US dollar eases lower in Asia - MarketPulseMarketPulse EUR/USD fell only slightly by 0.27% to 1.0720 on Friday post-data, where it remains in Asia. ​ Resistance between 1.0770 and 1.0830 remains a formidable barrier, with support at 1.0650. However, the single currency continues to show resilience at these levels, and resistance could be seriously tested if China’s reopening trade continues to support risk sentiment. Volumes will be impacted by European holidays today.   Sterling tumbled by 0.70% to 1.2490 on Friday in yet another whipsaw session. It remains there in Asia today. It has support/resistance at 1.2460 and 1.2670. A UK leadership challenge this week may serve to limit gains but a clean break of 1.2670 opens a potentially larger rally to 1.2800 and 1.3000, while the failure of 1.2460 could see sterling fall to 1.2400.   USD/JPY rose 0.73% to 130.85 on Friday, accounting for most of the dollar index gains post US data as US bond yields firmed slightly. USD/JPY has edged 0.15% lower to 130.65 today despite dovish BOJ comments, but the US/Japan rate differential should continue to support the downside unless US yields suddenly fall sharply. It has support at 129.00 and resistance at 131.00, a double top, and 131.30.   AUD/USD fell post US data as risk sentiment turned south. It finished 0.80% lower at 0.7205, easing another 0.20% to 0.7195 in Asia. AUD/USD has nearby support at 0.7180, an ascending one-month trendline, with resistance between its 50/100/200-day moving averages (DMAs) between 0.7225 and 0.7255. RBA hiking concerns ahead of tomorrow’s RBA meeting look set to limit gains in the short term.   USD/Asia moved higher on Friday on firm US data, with the Korean won, New Taiwan dollar, Singapore dollar, and India rupee the main losers, being favourites by fast-money to express risk sentiment of late. Yuan trading was impacted by a China holiday. Markets are quiet in Asia today, with Asian currencies booking only small gains versus the greenback. The sharp rise in oil prices on Friday, which continues in Asian trading today, is likely limiting Asia FX gains. The double-edged sword of China’s reopening is that oil prices are likely to remain firm as well as demand returns. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Relevance up to 11:00 2022-06-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/313016 Divergences in the Fed's monetary policy with other central banks and American exceptionalism, when US GDP growth was faster than that of its main competitors and the global economy as a whole, allowed the USD index to soar to 20-year highs. However, an increase in the federal funds rate slows down the gross domestic product in the States, while in some other countries the opposite process is underway. Divergence in economic growth is no longer playing on the side of the US dollar. It has serious opponents. The decline in employment growth and inflation, disappointing statistics on business activity, and the real estate market are strong evidence of the loss of a pair of US GDP. This is normal in the context of the tightening of the Fed's monetary policy. The question is, will an aggressive rate hike provoke a recession? Australia's economy, by contrast, continues to accelerate. The strongest labor market in the last 48 years, benefits from problems with grain supplies from Ukraine and India, a strong raw materials market in general, and hopes for monetary incentives from China to open the way for further economic growth of the Green Continent. In the first quarter, it accelerated to 3.3% y/y and to 0.8% q/q, which, against the background of the sliding of the American analog into the red zone, became one of the drivers of the AUDUSD rebound from the levels of the May lows by 5.7%. Rapid GDP growth, inflation at 5.1%, which is above the upper limit of the targeted range of 2-3%, and the lowest unemployment in almost half a century allowed the RBA to begin a cycle of tightening monetary policy. Dynamics of the main economic indicators of Australia     Now the markets are worried about how much the cash rate will grow at the meeting on June 7? 15 out of 29 Bloomberg experts predict that by 25 bps, three - by 50 bps, and the remaining 11 - by 40 bps. Financial markets also adhere to the latter opinion. Proponents of gradual monetary restriction nod to household debt, and an increase in the cost of services will lead to a decrease in consumption. The latter accounts for 60% of GDP. "Hawks" talk about the need to rein in inflation as quickly as possible and cite the example of the Fed and other central banks that use big steps. In my opinion, when a significant part of the positive from the increase in the federal funds rate is already embedded in the US dollar quotes, while Bloomberg experts' forecasts for the cash rate growth limit of up to 2% fall short of market expectations of 2.8% by December and up to 3.6% a year later, the AUDUSD pair has not yet revealed its potential. UBS predicts its growth to 0.76 by the end of 2022 and to 0.78 by the end of March 2023, and this makes sense. AUDUSD, the daily chart     Technically, finding AUDUSD above fair value and moving averages indicates the dominance of "bulls". A breakout of resistance at 0.7255, where an important pivot level is located, or a rebound from supports at 0.714 and 0.71 should be used to form long positions.

The Australian dollar went on a wild ride late last week. AUD/USD jumped 1.27% on Thursday, only to cough up most of these gains on Friday.  The Aussie is showing little movement today, as the markets eye the Reserve Bank of Australia rate decision on Tuesday. Aussie in calm waters ahead of RBA - MarketPulseMarketPulse RBA poised for back-to-back rate hikes The RBA is widely expected to raise interest rates back-to-back, for the first time since 2013. It’s not clear what the size of the hike will be, with the most likely scenario being a 40-bps increase, which would raise the cash rate to 0.75%. If the RBA opts for a modest 25-bps hike, investors could be disappointed and the Australian dollar could lose ground. The RBA started its rate-hike cycle last month and is expected to raise rates to 3% or even higher, which means that the Bank will be raising rates in the second half of the year and into 2023. The aggressive rate hiking by the RBA will help the Australian dollar keep pace with the US dollar in terms of the US/Australia rate differential. US yields climbed on Friday after the May nonfarm payrolls were stronger than expected. The economy added 390 thousand jobs, above the forecast of 325 thousand and indicating that the labour market remains robust. The report has solidified expectations that the Fed will deliver 50-bps hikes at the June and July meetings. Federal Chair Powell has signalled that the Fed will take a pause from rate hikes in September, but that view is by no means unanimous. On Thursday, Fed Vice Chair Brainard said the Fed should not take a break from rate hikes in September, and that the Fed might continue with 50-bps hikes if inflation doesn’t peak. What makes Brainard’s comments noteworthy is that she is considered a leading dove on the Fed, which is indicative of the hawkish pivot the Fed has taken as inflation continues to accelerate. Echoing Brainard, Fed member Mester said that the Fed had to act aggressively to contain inflation and that could mean an increase at the September meeting. . AUD/USD Technical AUD/USD is testing resistance at 0.7207. Above, there is resistance at 0.7252 There is support at 0.7121 and 0.7076 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

It has been a rough spell for the Australian dollar, which has steadied after a four-day slide. This downswing saw AUD/USD plunge over 300 points and break below the symbolic 70 level. Market nerves weigh on the Australian dollar Ahead of today’s FOMC rate meeting, risk sentiment is nowhere to be found. The US inflation report and expectations that the Fed will remain very aggressive have raised fears of a recession in the US. This has allowed the US dollar to surge, especially against risk-related currencies like the Australian dollar. Back in early April, AUD/USD was trading close to the 0.76 line, but the Aussie has been hammered, with drops of some 400 points in April and May. With US inflation hitting a new 40-year high of 8.6%, some commentators are using the word “panic” to describe the financial markets. There are voices calling on the Fed to deliver a massive 0.75% hike at today’s meeting, though it would be a shock if the Fed did anything other than raise rates by 0.50%. Fed Chair Powell may use his press conference to hint at a 0.75% hike at a later date if inflation doesn’t start to fall soon, and such a message would likely boost the surging US dollar. With no sign of an inflation peak, it’s clear that the Federal Reserve will have to keep its foot pressed to the floor when it comes to upcoming rate hikes. This makes it likely that the Fed will deliver 50-bp hikes in June, July and September. Just a couple of weeks ago the Fed signalled it would take a break in September, but that now seems a luxury it can’t afford, given that inflation continues to accelerate. The Australian dollar didn’t get any relief from Australian releases, as NAB Business Confidence for May slowed for a second straight month, with a reading of 6 points, down from 10 previously. We’ll get a look at Westpac Consumer Confidence for June later today. The May reading came in at -5.6%, and another sharp loss could see the Aussie resume its downward movement. . AUD/USD Technical There is weak support at 0.6902, followed by support at 0.6765 There is resistance at 0.6973 and 0.7110   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Relevance up to 12:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical outlook: AUDUSD rose through the 0.7070 mark on Thursday before finding resistance. The currency pair is pulling back and is seen to be trading close to the 0.6995 mark at this point of writing. Also note that prices have confirmed a huge Engulfing Bullish candlestick pattern on the daily chart after bouncing from the 0.6850 low early this week. AUDUSD bulls will be poised to hold prices above 0.6850 to remain in control and push at least towards the 0.7450 level going forward. The currency pair seems to be unfolding a corrective rally, which might terminate above 0.7275 before reversing lower again. Immediate price resistance is seen towards the 0.7660 mark and a break is required to confirm a change in the larger degree trend. AUDUSD is working on a meaningful downswing between the 0.7660 and 0.6830 levels for now. The 0.618 Fibonacci retracement of the above drop is seen through the 0.7345 mark as projected on the daily chart. The currency is expected to face formidable resistance as prices attempt to push through that mark going forward. Trading plan: Potential rally through 0.7300-400 against 0.6800 Good luck!   Read more: https://www.instaforex.eu/forex_analysis/280625

Relevance up to 13:00 2022-06-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Market participants as a whole reacted rather restrainedly to the decision of the central bank to raise the interest rate and to today's speech of the head of the RBA, and the publication of minutes from the June meeting of the bank.     AUD remains under pressure, primarily against the US dollar. As of this writing, AUD/USD is trading near 0.6945, continuing to decline towards the lower border of the descending channel on the weekly chart, which is currently below 0.6800. Given the Fed's propensity to pursue a tighter monetary policy and in anticipation of further strengthening of the US dollar, a deeper decline in AUD/USD should be expected.     A breakdown of local support levels 0.6850, 0.6800 will confirm our assumption, and AUD/USD will head towards multi-year lows reached in March 2020 near 0.5665, 0.5510 with intermediate targets at support levels 0.6500, 0.6455 (23.6% Fibonacci retracement to the wave of the pair's decline from 0.9500 in July 2014 to 2020 lows near 0.5510), 0.6270, 0.5975.     The continued positive upward trend in 10-year US bond yields makes the dollar an attractive asset for investment, given the prospects for further tightening of the Fed's monetary policy. The dollar is also actively used as a defensive asset, winning over traditional defensive assets such as gold, franc, and yen.     In an alternative scenario, AUD/USD will again try to break through the key resistance levels 0.7240 (200 EMA on the daily chart), 0.7210 (144 EMA on the daily chart), 0.7305 (200 EMA on the weekly chart, 50 EMA on the monthly chart). A breakdown of the resistance levels 0.7600 (200 EMA on the monthly chart), 0.7640 (144 EMA on the monthly chart) will bring AUD/USD into the zone of a long-term bull market. Support levels: 0.6900, 0.6850, 0.6800, 0.6455, 0.6270, 0.5975, 0.5665, 0.5510 Resistance levels: 0.6970, 0.7000, 0.7037, 0.7070, 0.7120, 0.7210, 0.7240, 0.7265, 0.7305 Trading Tips Sell Stop 0.6915. Stop-Loss 0.7010. Take-Profit 0.6900, 0.6850, 0.6800, 0.6455, 0.6270, 0.5975, 0.5665, 0.5510 Buy Stop 0.7010. Stop-Loss 0.6915. Take-Profit 0.7037, 0.7070, 0.7120, 0.7210, 0.7240, 0.7265, 0.7305   Read more: https://www.instaforex.eu/forex_analysis/314087

Australian employment sparkles It has been a week of the good and the bad/ugly from Australian releases. The employment report for June, released earlier today, improved from May and easily beat expectations. The economy created 88.4 thousand jobs, up from 60.6 thousand in May and well above the 30.0 thousand estimate.  The unemployment rate dropped to 3.5%, down sharply from 3.9% in May (3.8% exp.). This is good news for the RBA, which is relying on a robust labour market to bear the weight of an aggressive rate policy. The RBA has raised the cash rate to 1.35%, with more hikes on the way. The relatively low cash rate hasn’t had much effect on soaring inflation, which surged to 5.1% in the first quarter. Australia releases Q2 inflation on July 27th, the same day as the Federal Reserve policy meeting. The RBA has said that inflation could top 7%, which would exacerbate the current cost of living crisis. Higher inflation has taken a bite out of business and consumer confidence, which headed southward earlier in the week. Westpac Consumer Confidence index for July came in at -3.0%, its ninth decline in 10 months. As well, NAB Business Confidence for June slowed to 1, down from 6 in May. Consumers and companies don’t have much confidence in the economic outlook, and that can translate into decreased spending in a time of uncertainty, which would be bad news for the economy. Inflation releases tend to grab the headlines, especially with inflation going up and up. However, the RBA is no less concerned with inflation expectations, as inflation will be even harder to curb if consumers and businesses expect inflation to continue to rise and rush to make purchases, thus exacerbating the pressure on prices. Earlier in the week, Melbourne Institute Inflation Expectations remained high at 6.3%, although this was an improvement from the previous reading of 6.7%. . AUD/USD Technical There is resistance at 0.6782 and 0.6839 0.6706 is a weak support line, followed by 0.6649 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie shrugs off superb jobs report - MarketPulseMarketPulse

Relevance up to 04:00 2022-07-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. After the aussie's growth by almost 50 points last Friday, now the price continues to rise in today's Asian session and is approaching the target level of 0.6830 (low of May 12). The Marlin Oscillator on the daily timeframe is approaching the border with the growth territory, overcoming which may develop a correction to the next target level of 0.6951.     The MACD indicator line is approaching this level. If the price reaches the target, then we expect it to turn down, into a new wave of decline. The move towards 0.6951 will be jerky as this was in the 0.6951-0.6830 range of the June 22-July 5 decline.     The price has consolidated above the balance and MACD indicator lines on the four-hour chart, the Marlin Oscillator is growing in the positive area. Consolidating above 0.6830 will start the chase to the 0.6951 target level. Returning to the area below 0.6755 will mean that the price intends to reach 0.6686 and then 0.6640.   Read more: https://www.instaforex.eu/forex_analysis/316360

Relevance up to 04:00 2022-08-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. On Friday, the Australian dollar managed to overcome the support of the MACD indicator line on a daily scale. Today opened below the MACD line, which opens up the aussie's plan for the main downside scenario - further advance to the target level of 0.6830 (May 12 low).     The signal line of the Marlin Oscillator is a little late with the transition under the zero line, this circumstance may delay the price's downward movement for several hours.     The price has already formed a convergence with the Marlin Oscillator on the H4 chart, which contributes to the delay in the decline. But in general, convergence does not cancel a strong downward price movement. For such a cancellation, the price needs to do a very difficult thing - to settle above the MACD line (0.6980).   Read more: https://www.instaforex.eu/forex_analysis/318254

In the European session, the Australian dollar is trading at 0.6991, up 0.10% on the day. This follows massive gains on Monday, when AUD/USD soared 1.04% and briefly pushed above the symbolic 70 level. The US dollar’s recent rally has fizzled, but don’t count Uncle Sam out. US Treasury yields have been dropping, which is indicative of investor demand for safety. There is plenty of uncertainty in the air about the US economy, and heated debates about whether the economy is in a recession or not are not contributing to greater confidence in the economic outlook. Markets eye US inflation report Wednesday’s US inflation report could have a strong impact on the currency markets. Headline CPI is expected to fall to 8.7%, down from 9.1%, while core CPI is forecast to rise to 6.1%, up from 5.9%. If the headline reading is higher than expected, it will boost the case for the Fed to raise rates by 0.75% in September and the dollar should respond with gains. Conversely, a soft reading from the headline or core releases would ease the pressure on the Fed and could send the dollar lower. In Australia, confidence releases were a mix. Westpac Consumer Sentiment for August posted a second straight decline of 3%. Consumer confidence has dropped for nine consecutive months, declining some 22.9% during that time. There was better news from the NAB Business Confidence index for July, which jumped to 7, up from 2 points. Business Conditions climbed to 20, up from 13 prior. The indicator points to broad-based strength in business conditions, despite the global slowdown and weaker domestic activity due to higher rates. As well, purchase and labour costs and retail prices rose, which points to higher inflation and another hike from the RBA in September, likely of 0.50%. AUD/USD Technical There is weak resistance at 0.7016, followed by resistance at 0.7120. 0.6943 has switched to support. Below, there is support at 0.6839 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie rally takes breather - MarketPulseMarketPulse

Relevance up to 08:00 2022-08-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Positive sentiment ruled over markets on Monday, as a result of which stock indices in Asia and Europe rose. Dynamics in the US, meanwhile, was quite ambiguous. After the release of strong data on US employment and average wages last Friday, markets began to doubt if the Fed will soften its stance on monetary policy. This led to a sharp increase in dollar demand, as well as mixed dynamics in markets, primarily in the US. The better-than-expected figures allow the Fed to continue raising rates without the fear of a weakening labor market. This, of course, is negative for stock markets. Nevertheless, investors are now focused on the upcoming US inflation report tomorrow, which could indicate whether the Fed will raise rates further or not. If the data turns out to be in line with the forecast and shows a corrective decline in annual terms from 9.1% to 8.7%, and a slowdown from 1.3% to 0.2% on a monthly basis, it is likely that the central bank will remain on its previous position, that is, a pause in rate hikes in August then a sharp decline to 0.25% in the next months. This will be taken as good news by markets, possibly leading to a new, but limited rally. If the value of inflation falls even more, expect a more vigorous increase in positive sentiment. But if inflation continues to increase, sell-offs will escalate, while dollar will rise even more. This is because the Fed will most likely continue its aggressive rate hike. In other words, a slowdown in inflationary pressure, or even a slight decrease, will put pressure on dollar and increase risk appetite. Further pressure, meanwhile, will raise dollar and push down stocks and other assets. Forecasts for today:     AUD/USD The pair is trading above the support level of 0.6965. Further selling pressure could lead to a local fall to 0.6870. USD/JPY The pair is below 135.15. But increased buying pressure will push the quote to 136.25. Read more: https://www.instaforex.eu/forex_analysis/318414

Australia's Westpac Consumer Confidence Index lost 3% in August, developing a nine-month slump that took off 22.9%. The index was near current levels twice in 2020 during the worst periods of lockdowns and uncertainty and even earlier in 2008 during the worst financial crisis. But current levels are well above the recessionary periods of the late 1980s and early 1990s. However, this does not promise a bleak future for the economy as it will shift the government's and RBA's focus from fighting inflation to supporting demand. AUD/USD On forex, the AUDUSD has been languishing around its 50-day moving average for the last two and a half weeks. At the beginning of August, it hit a glass ceiling at 0.7000, separating the crisis from the norm for the Australian economy for years. Forex - Australian Dollar To US Dollar The inability of the bulls to push the pair higher may be seen as a structural weakness of the buyers, passed on the sight of the sharp decline in the prices of metals, an important export commodity. In this case, the AUDUSD may fall without significant headwinds to 0.6700, the low of July. If there is insufficient demand, the road to the abyss opens, and the pair will move into a channel at 0.50–0.60 for the following year.

The Australian dollar has extended its gains today, after rising sharply on Wednesday. In the European session, AUD/USD is trading at 0.7099, up 0.26% on the day. Aussie rockets on US inflation Spectacular. That says it all about the Australian dollar’s surge on Wednesday. AUD/USD jumped 150 points and briefly punched above the 0.7100 level for the first time since June 10th. The catalyst for the Aussie’s good fortune was the US inflation report, as July inflation fell and took the US dollar on a nasty tumble against the majors. The US headline and core inflation releases both came in lower than the forecast.  Core CPI remained steady at 5.9%, lower than the forecast of 6.1%. However, the real news was the headline reading, which dropped to 8.5%, down sharply from 9.1% in June and below the estimate of 8.7%. The markets jumped all over the report, and “inflation peak fever” is spreading, as hopes rise that inflation is finally receding. This sentiment sent the US dollar reeling, on the assumption that the Fed can breathe easier and ease its hiking – perhaps “only” a 0.50% hike after back-to-back increases of 0.75%. Before investors celebrate the demise of inflation, an examination of the facts is in order. The inflation rate of 8.5%, although lower than last month, is still close to a four-decade high. Inflation fell chiefly due to a drop in gas prices, but with the volatility we are seeing in the oil markets, gasoline could quickly change directions. Perhaps most importantly, inflation remains broad based – the core reading, which excludes food and energy costs, remained steady at 5.9%. As the Fed has been warning, the fight against inflation remains far from over, and the rate tightening cycle has by no means run its course. The Reserve Bank of Australia is also in a tough fight against inflation, and is no doubt pleased with today’s MI Inflation Expectations release for July. Inflation Expectations fell to 5.9%, down from 6.3% in June, marking a second straight deceleration. This will likely result in a decline in the forward guidance from the RBA, which would likely weigh on the Australian dollar. The RBA holds its next rate meeting on September 6th. AUD/USD Technical There is weak resistance at 0.7016, followed by resistance at 0.7120 0.6943 has switched to support. Below, there is support at 0.6839 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar rises to 2-month high - MarketPulseMarketPulse

Summary:  Weak data out of China overnight, together with a surprise rate cut from the PBOC and collapsing energy prices later on Monday saw the Japanese yen surging higher across the board. Indeed, the two key factors behind its descent to multi-decade lows earlier this year, rising yields and surging energy prices, have eased considerably since mid-June with only modest reaction from the yen thus far. Is that about to change? FX Trading focus: JPY finding sudden support on new disinflation narrative Weaker than expected Chinese data overnight brought a surprise rate cut from the Chinese central bank and seems to have sparked a broadening sell-off in commodities, which was boosted later by a crude oil drop of some five dollars per barrel on the news that Iran will decide by midnight tonight on whether to accept a new draft on the nuclear deal forward by the Euro zone. In response, the Chinese yuan has weakened toward the highs for the cycle in USDCNH, trading 6.78+ as of this writing and  (there was a spike high to 6.381 back in May but the exchange rate has been capped by 6.80 since then), but the Japanese yen is stealing the volatility and strength crown, surging sharply across the board and following up on the move lower inspired by the soft US CPI data point. US long yields easing considerably lower after an odd spike last Thursday are a further wind at the JPY’s back here. In the bigger picture, it has been rather remarkable that the firm retreat in global long-date yields since the mid-June peak and the oil price backing down a full 25% and more from the cycle highs didn’t do more to support the yen from the yield-spread angle (Bank of Japan’s YCC policy less toxic as yields fall) and from the current account angle for Japan. Interestingly, while the JPY has surged and taken USDJPY down several notches, the US dollar is rather firm elsewhere, with the focus more on selling pro-cyclical and commodity currencies on the possible implication that China may be content to export deflation by weakening its currency now that commodity prices have come down rather than on selling the US dollar due to any marking down of Fed expectations. Still, while the USD may remain a safe haven should JPY volatility be set to run amok across markets, the focus is far more on the latter as long as USDJPY is falling Chart: EURJPY As the JPY surges here, EURJPY is falling sharply again, largely tracking the trajectory of longer European sovereign yields, which never really rose much from their recent lows from a couple of weeks back, making it tough to understand the solid rally back above 138.00 of late. After peaking above 1.90% briefly in June, the German 10-year Bund, for example, is trading about 100 basis points lower and is not far from the cycle low daily close at 77 basis points. The EURJPY chart features a rather significant pivot area at 133.50, a prior major high back in late 2021 and the recent low and 200-day moving average back at the beginning of the month. After a brief JPY volatility scare in late July and into early August that faded, are we set for a second and bigger round here that takes USDJPY down through 130.00 and EURJPY likewise? A more significant rally in long US treasuries might be required to bring about a real JPY rampage. Source: Saxo Group The focus on weak Chinese data and key commodity prices like copper suddenly losing altitude after their recent rally has the Aussie shifting to the defensive just after it was showing strength late last week in sympathy with strong risk sentiment and those higher commodity prices. Is the AUDUSD break above 0.7000-25 set for a high octane reversal here? AUDJPY is worth a look as well after it managed to surge all the way back toward the top of the range before. The idea that a weak Chine might export deflation from here might be unsettling for Aussie bulls. The US macro data focus for the week is on today’s NAHB homebuilder’s survey, which plunged to a low since 2015 in June (not including the chaotic early 2020 pandemic breakout months), the July Housing Starts and Building Permits and then the July Retail Sales and FOMC minutes on Wednesday. With a massive relief in gasoline prices from the July spike high, it will be interesting to see whether the August US data picks up again on the services side. The preliminary August University of Michigan sentiment survey release on Friday showed expectations rising sharply by over 7 points from the lowest since-1980 lows of June, while the Present Situation measure dropped a few points back toward the cycle (and record) lows from May. Table: FX Board of G10 and CNH trend evolution and strength. The JPY is the real story today, but as our trending measures employ some averaging/smoothing, the move will need to stick what it has achieved today to show more. Watch out for a big shift in the commodity currencies in coming days as well if today’s move is the start of something. Elsewhere, the JPY comeback is merely taking CHF from strength to strength, although even the might franc has dropped against the JPY today. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. Big momentum shift afoot today and watching whether this holds and the JPY pairs and pairs like AUDUSD and USDCAD to see if we are witnessing a major momentum shift in themes here. Also note NOK pairs like USDNOK and EURNOK here. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1400 – US Aug. NAHB Housing Market Index 0130 – Australia RBA Meeting Minutes Source: FX Update: JPY jumps on deflating energy prices, fresh retreat in yields.

The bullish dollar narrative was fairly straightforward  Yes, the US main challengers, China and Russia, have been hobbled in different ways by self-inflicted injuries. Still, the driver of the dollar was the expected aggressive tightening by the Federal Reserve. The market accepted that after being a bit slower than ideal (though faster and before many other large central banks), the Fed would move forcefully against inflation, even if it diminished the chances of an economic soft-landing.   However, now the market seems to have a different reaction function  The euro was impressively resilient after the job growth of more than twice expectations. However, the softer than expected US CPI sent the dollar broadly lower, inflicting some apparent technical damage to the charts.  We are reluctant to chase the dollar lower and impressed in a week that the US reported a decline in CPI and PPI that the 10-year bond yield closed a few basis points higher and the first back-to-back weekly increase in two months Technically, it seems that the dollar's pullback, nearly a month-old, move is getting maybe getting stretched. We will try to identify levels that could confirm another leg lower and what would suggest the US dollar may snap back.   Dollar Index:   After reaching almost 107.00 after the stronger than expected jobs data, the Dollar Index fell to almost 104.65 in response to the softer than expected CPI. It was the lowest level since the end of June. The MACD is still falling but oversold. The Slow Stochastic looks poised to turn lower from the middle of the range. Nevertheless, we like it higher in the coming days. We target 106.30 and then 107.00. A move above 107.50 could signal a return to the highs near 109.30 from mid-July. That said, a close below 105.00 would boost the risk of another leg lower.  Euro:  The euro rallied strongly after the softer US CPI, but a key trendline drawn off the February, March, and June highs begins the new week near $1.0375 remains unchallenged. Although the momentum indicators allow for additional gains, we look for the euro to push lower in the coming days. Only a move above the trendline would give it new life. We think the greater likelihood is for the single currency to initially ease toward $1.0180-$1.0200. It may take a break of $1.01 to signal a return to the 20-year low set in mid-July near $0.9950. The US two-year premium over Germany narrowed every day last week for a cumulative 11 bp to near 2.66%. Italy's premium over Germany was trimmed by six basis points. It was the third week of convergence, but at 0.75%, it is still nearly twice what it was in June. Japanese Yen:  The greenback was pushed away from JPY135 by the decline in US rates after the CPI figures. It was sold to about JPY131.75, holding above the month's low set on August 2 near JPY130.40. However, US rates closed firmer on the week despite three softer-than-expected price reports (CPI, PPI, and import/export prices). As a result, the greenback looks poised to test the JPY135.00-50 ceiling. A move above JPY136 would target the JPY137.50 area. We have emphasized the strong correlation between changes in the exchange rate and the US 10-year yield. That correlation is off its highs though still above 0.50, while the correlation with the US two-year yield has risen toward 0.65, the highest in five months.  British Pound:   Sterling rose to $1.2275 in the broad US dollar sell-off in the middle of last week. It stalled in front of the high set on August 2, a little shy of $1.23. This sets up a potential double top formation with a neckline at $1.20. A break would re-target the two-year low set in July near $1.1760. The MACD is set to turn down. The Slow Stochastic is going sideways in the middle of the range after pulling back earlier this month. Sentiment seems poor, and in the week ahead, the UK is expected to report some easing in the labor market, accelerating consumer prices, and another decline in retail sales. Canadian Dollar:   The US dollar fell to near a two-month low last week slightly below CAD1.2730, and slipped through the 200-day moving average on an intraday basis for the first time since June 9. The test of the (61.8%) retracement of this year's rally (early April low ~CAD1.2400 and the mid-July high ~CAD1.3225) found near CAD1.2715 was successful. The US dollar recovered ahead of the weekend back to the CAD1.2800 area. Although the momentum indicators give room for further US dollar losses, we suspect a near-term low is in place and look for an upside correction toward CAD1.2850-CAD1.2900. The Canadian dollar remains sensitive to the immediate risk environment reflected in the change in the S&P 500. The correlation over the past 30 sessions is a little better than 0.60. The correlation reached a two-year high in June near 0.80. The exchange rate's correlation (30 sessions) with oil prices (WTI) set this year's high in early August near 0.60. It is now slightly below 0.50.  Australian Dollar:   Although our bias is for the US dollar to correct higher, the Aussie does not line up quite as well. It broke above the high set at the start of the month near $0.7050 and has held above it. However, its surge stalled slightly above $0.7135, and it consolidated in a narrow range around $0.7100 ahead of the weekend. The momentum indicators are constructive. The main hurdle is the 200-day moving average near $0.7150 and the (50%) retracement of this year's decline (~$0.7660 in early April and ~$6680 in mid-July) found near $0.7170. A break of this area could see a return to the June high by $0.7285.   Mexican Peso:   Latin American currencies had a good week, except for the Argentine peso, which fell by more than 1%, for the dubious honor of being the poorest performer in the emerging markets. Led by Chile (+3.9%) and the Colombian peso (3.8%), Latam currencies accounted for half of the top five performers last week. The peso's 2.7% gain was its best in five months, and the dollar was sold a little through MXN19.85, its lowest level since late June when it reached almost MXN19.82.There seems little to prevent a move toward MXN19.50. Any worries that AMLO's appointments to the central bank would block aggressive tightening of monetary policy must have evaporated as Banxico demonstrated a resolve to hike rates and shadow the US.  Chinese Yuan:   The yuan took a step lower from mid-April until mid-May. Since then, it has been trading within the range more or less seen in the second half of May. That dollar range is roughly CNY6.650 to CNY6.77. For the past month, the dollar has traded between CNY6.72 and CNY6.78, fraying the upper end of the broader range after the greenback surged broadly after the US employment data. Policymakers have signaled concern about inflation and its reluctance to ease monetary policy. It would seem the domestic policy efforts might favor a firm yuan.     Disclaimer   Source: Is the Dollar's Month-Long Pullback Over?

Summary:  Equities traded higher still yesterday as treasury yields fell further back into the recent range and on hopes that an Iran nuclear deal will cement yesterday’s steep drop in oil prices. The latest data out of the US was certainly nothing to celebrate as the July US Homebuilder survey showed a further sharp drop in new housing interest and a collapse in the first regional US manufacturing survey for August, the New York Fed’s Empire Manufacturing.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their gains yesterday getting closer to the 200-day moving average sitting around the 4,322 level. The US 10-year yield seems well anchored below 3% and financial conditions indicate that S&P 500 futures could in theory trade around 4,350. The news flow is light but earnings from Walmart later today could impact US equities should the largest US retailer lower their outlook for the US consumer. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hong Kong and mainland Chinese equities were mixed. CSI300 was flat, with electric equipment, wind power, solar and auto names gained. Hang Seng Index declined 0.5%. Energy stocks fell on lower oil price. Technology names were weak overall, Hang Seng TECH Index (HSTECH.I) declined 0.9%. Sunny Optical (02382:xhkg) reported worse than expected 1H22 results, revenues -14.4% YoY, net profits -49.5%, citing weakening component demand from the smartphone industry globally. The company’s gross margin plunged to 20.8% from 24.9%. Li Auto’s (02015:xhkg/LI:xnas) Q2 results were in line with expectations but Q3 guidance disappointed. The launch L9 seems cannibalizing Li ONE sales. USD: strength despite weak US data and falling treasury yields and strong risk sentiment Yesterday, the JPY tried to make hay on China cutting rates and as global yields eased back lower, with crude oil marked several dollars lower on hopes for an Iran nuclear deal. But the move didn’t stick well in USDJPY, which shrugged off these developments as the USD firmed further across the board, despite treasury yields easing lower, weak data and still strong risk sentiment/easy financial conditions. A strong US dollar is in and of itself is a tightening of financial conditions, however, and yesterday’s action has cemented a bullish reversal in some pairs, especially EURUSD and GBPUSD, where the next important levels pointing to a test of the cycle lows are 1.0100 and 1.2000, respectively. Elsewhere, USDJPY remains in limbo (strong surge above 135.00 needed to suggest upside threat), USDCAD has posted a bullish reversal but needs 1.3000 for confirmation, and AUDUSD is teetering, but needs a close back below 0.7000 to suggest a resurgent US dollar and perhaps widening concerns that a Chinese recession will temper interest in the Aussie. Crude oil Crude oil (CLU2 & LCOV2) trades lower following Monday’s sharp drop that was driven by a combination softer economic data from China and the US, the world’s top consumers of oil, and after Iran signaled a nuclear deal could be reached soon, raising the prospect of more Iranian crude reaching the market. The latest developments potentially reducing demand while adding supply forced recently established longs to bail and short sellers are once again in control. Brent needs to hold support at $93 in order to avoid further weakness towards $90. Focus on Iran news. Copper Copper (COPPERUSSEP22) led the metals pack lower, without breaking any key technical levels to the downside, after China’s domestic activity weakened in July. Meanwhile, supply side issues in Europe also cannot be ignored with surging power prices putting economic pressure on smelters, and many of them running at a loss. HG copper jumped 19% during the past month and yesterday’s setback did not challenge any key support level with the first being around $3.50/lb. BHP, the world’s top miner meanwhile hit record profits while saying that China is likely to offer a “tail wind” to global growth (see below). EU power prices hit record high on continued surge in gas prices ... threatening a deeper plunge into recession. The latest surge being driven by low water levels on Europe’s rivers obstructing the normal passage for diesel, coal, and other fuel products, thereby forcing utilities to use more gas European Dutch TTF benchmark gas futures (TTFMU2) has opened 5% higher at €231/MWh, around 15 times higher than the long-term average, suggesting more pain ahead for European utility companies. Next-year electricity rates in Germany (DEBYF3) closed 3.7% higher to 477.50 euros ($487) a megawatt-hour on the European Energy Exchange AG. That is almost six times as much as this time last year, with the price doubling in the past two months alone. UK power prices were also seen touching record highs. US Treasuries (IEF, TLT) see long-end yields surging. Yields dipped back lower on weak US economic data, including a very weak Empire Manufacturing Survey (more below) and another sharp plunge in the NAHB survey of US home builders, suggesting a rapid slowdown in the housing market. The survey has historically proven a leading indicator on prices as well. The 10-year benchmark dipped back further into the range after threatening to break up higher last week. The choppy range extends down to 2.50% before a drop in yields becomes a more notable development, but tomorrow’s US Retail Sales and FOMC minutes offer the next test of sentiment. What is going on? Weak Empire State manufacturing survey and NAHB Index Although a niche and volatile measure, the United States NY Empire State Manufacturing Index, compiled by the New York Federal Reserve, fell to -31.3 from 11.1 in July, its lowest level since May 2020 and its sharpest monthly drop since the early days of the pandemic. New orders and shipments plunged, and unfilled orders also declined, albeit less sharply. Other key areas of concern were the rise in inventories and a decline in average hours worked. This further weighed on the sentiment after weak China data had already cast concerns of a global growth slowdown earlier. Meanwhile, the US NAHB housing market index also saw its eighth consecutive monthly decline as it slid 6 points to 49 in August. July housing starts and building permits are scheduled to be reported later today, and these will likely continue to signal a cooling demand amid the rising mortgage rates as well as overbuilding. China's CATL plans to build its second battery factory in Europe CATL unveiled plans to build a renewable energy-powered factory for car battery cells and modules in Hungary. It will invest EUR 7.34 billion (USD 7.5bn) on the 100-GWh facility, which will be its second one in Europe. To power the facility CATL will use electricity from renewable energy source, such as solar power. At present, CATL is in the process of commissioning its German battery production plant, which is expected to roll out its first cells and modules by the end of 2022. Disney (DIS) shares rise on activist investor interest Daniel Loeb of Third Point announced a significant new stake in Disney yesterday, helping to send the shares some 2.2% higher in yesterday’s session. The activist investor recommended that the company spin off its ESPN business to reduce debt and take full ownership of the Hulu streaming service, among other moves. Elliott exits SoftBank Group The US activist fund sold its stake in SoftBank earlier this year in a sign that large investors are scaling back on their investments in technology growth companies with long time to break-even. In a recent comment, SoftBank’s founder Masayoshi Son used more cautious words regarding the investment company’s future investments in growth companies. BHP reports its highest ever profit, bolstered by coal BHP posted a record profit of $21.3bn supported by considerable gains in coal, nickel and copper prices during the fiscal year ending 30 June 2022. Profits jumped 26% compared to last year’s result. The biggest driver was a 271% jump in the thermal coal price, and a 43% spike in the nickel price. The world’s biggest miner sees commodity demand improving in 2023, while it also sees China emerging as a source of stable commodity demand in the year ahead. BHP sees supply covering demand in the near-term for copper and nickel. According to the company iron ore will likely remain in surplus through 2023. In an interview Chief Executive Officer Mike Henry said: Long-term outlook for copper, nickel and potash is really strong because of “unstoppable global trends: decarbonization, electrification, population growth, increasing standards of living,” What are we watching next? Australia Q2 Wage Index tonight to determine future RBA rate hike size? The RBA Minutes out overnight showed a central bank that is trying to navigate a “narrow path” for keeping the Australian economy on an “even keel”. The RBA has often singled out wages as an important risk for whether inflation risks becoming more embedded and on that note, tonight sees the release of the Q2 Wage Index, expected to come in at 2.7% year-on-year after 2.4% in Q1. A softer data point may have the market pulling back expectations for another 50 basis point rate hike at the next RBA meeting after the three consecutive moves of that size. The market is about 50-50 on the size of the RBA hike in September, pricing a 35 bps move. RBNZ set to decelerate its guidance after another 50 basis point move tonight? The Reserve Bank of New Zealand is expected to hike its official cash rate another 50 basis points tonight, taking the policy rate to 3.00%. With business and consumer sentiment surveys in the dumps in New Zealand and oil prices retreating sharply the RBNZ, one of the earliest among developed economies to tighten monetary policy starting late last year, may be set for more cautious forward guidance and a wait and see attitude, although wages did rise in Q2 at their second fastest pace (+2.3% QoQ) in decades. The market is uncertain on the future course of RBNZ policy, pricing 44 bps for the October meeting after tonight’s 50 bps hike and another 36 bps for the November meeting. US retailer earnings eyed After disappointing results last quarter, focus is on Walmart and Home Depot earnings later today. These will put the focus entirely on the US consumer after the jobs data this month highlighted a still-tight labor market while the inflation picture saw price pressures may have peaked. It would also be interesting to look at the inventory situation at these retailers, and any updated reports on the status of the global supply chains.   Earnings to watch Today’s US earnings focus is Walmart and Home Depot with analysts expecting Walmart to report 7% revenue growth y/y and 8% decline y/y in EPS as the US retailer is facing difficulties passing on rising input costs. Home Depot is expected to report 6% growth y/y in revenue and 10% growth y/y in EPS as the US housing market is still robust driving demand for home improvement products. Sea Ltd, the fast-growing e-commerce and gaming company, is expected to report revenue growth of 30% y/y in Q2 but worsening EBITDA margin at -16.2%. The previous winning company is facing headwinds in its gaming division and cash flow from operations have gone from positive $318mn in Q1 2021 to negative $724mn in Q1 2022. Today: China Telecom, Walmart, Agilent Technologies, Home Depot, Sea Ltd Wednesday: Tencent, Hong Kong Exchanges & Clearing, Analog Devices, Cisco Systems, Synopsys, Lowe’s, CSL, Target, TJX, Coloplast, Carlsberg, Wolfspeed Thursday: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0900 – Germany Aug. ZEW Survey 0900 – Eurozone Jun. Trade Balance 1200 – Poland Jul. Core CPI 1215 – Canada Jul. Housing Starts 1230 – US Jul. Housing Starts and Building Permits 1230 – Canada Jul. CPI 2030 – API Weekly Report on US Oil Inventories 2350 – Japan Jul. Trade Balance 0130 – Australia Q2 Wage Index 0200 – New Zealand RBNZ Official Cash Rate announcement 0300 – New Zealand RBNZ Governor Orr Press Conference  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – August 16, 2022

Relevance up to 04:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. After a daily delay of the Australian dollar at 0.7015 today, since the opening of the session, the price resumed its decline, heading towards the nearest target of 0.6950. With the price going below the level, an attack will start to develop at 0.6870 – a low on August 5. The decline in stock indices on Asian markets (China A50 -0.38%, S&P/ASX 200 -0.09%) and lower prices for metals and oil (Brent -0.27%) helps the Australian currency to fall.     The Reserve Bank of New Zealand raised the rate from 2.50% to 3.00%, but this did not help even the New Zealand dollar. The daily Marlin Oscillator is getting closer and closer to the zero line, while maintaining the bears' optimism.     In order to develop the decline, the price still needs to settle below the level of 0.7015 on the four-hour chart. Here we see that Tuesday's consolidation took place under the MACD indicator line and when the Marlin Oscillator was in the negative area. This tells us about the likely imminent resumption of the downward movement of the Australian dollar.   Read more: https://www.instaforex.eu/forex_analysis/319098

The Australian dollar edged lower following today’s Australian employment report but has reversed directions. In the European session, AUD/USD is trading at 0.6957, up 0.28%. Australian employment report disappoints Australia released the July employment report, and the numbers were surprisingly soft. The economy lost 40.9 thousand jobs, well below the estimate of 25.0 thousand. This follows a strong gain of 88.4 thousand in May. Making the report sting even more, full-time positions fell by 86.9 thousand. The silver lining was a drop in the unemployment rate to 3.4%, down from 3.5%. However, that was likely due to the participation rate falling to 66.4%, down from 66.8%. The Australian dollar lost ground following the job report release but has reversed directions. The Aussie tumbled 1.23% on Tuesday, as ominous developments in China are weighing on the currency. The latest news was the Chinese central bank lowering its 1-year MLF loans to 2.75%, down from 2.85%. The spike in Covid cases and the worsening property crisis have resulted in a decline in credit growth, and the PBOC has loosened policy in an effort to boost credit demand. The Aussie is sensitive to developments in China, which is Australia’s number one trading partner. The RBA meets next on September 6th and another rate hike is likely, even with the weak job report. The markets have priced in a 25 basis point hike, which would bring the cash rate to 2.10%. The RBA minutes, published on Tuesday, indicated that further rate hikes were coming, but reiterated that the Bank would be guided by economic data and the inflation forecast. . AUD/USD Technical There is resistance at 0.7053, followed by a monthly resistance line at 0.7122 AUD/USD has support at 0.6968 and 0.6902 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie bounces back after soft jobs report - MarketPulseMarketPulse

Overview:  The poor eurozone PMI underscores likely recession and weighs on the single currency, which was sold to a new 20-year low.  Rather than a "Turn Around Tuesday"  a broadly consolidative session is unfolding.  Asian and European equities are weaker, while US futures are positive but little changed.  Benchmark 10-year bond yield are mostly firmer and the premium offered by Europe's periphery is edging higher.  The US 10-year is little changed near 3.02%.  Most non-European major currencies are firmer, with the exception of the Australian dollar.  The euro struggles to sustain even the most modest of upticks.  Emerging market currencies are mostly lower.  The Mexican peso is an notable exception.  It is the strongest in the EM space today, followed by the Indonesian rupiah, where the central bank hiked its key rate by 25 bp.  Gold's early gains are being reversed, but it is within yesterday's range.  October WTI has extended yesterday's recovery, sparked by Saudi Arabia's threat to cut output.  US natgas is higher for the third session and is up nearly 8% in this run.  Europe's natgas benchmark is about 2% lower after yesterday's 12.3% spike. Iron ore is up a second day, while September copper has recouped yesterday's minor (~0.35%) loss. September wheat is advancing for a third session for a cumulative gain of 7%.   Asia Pacific Japan's recovery is faltering, and the government is already cobbling together a supplemental spending bill.  While the preliminary manufacturing PMI show a slowing expansion (51 vs. 52.1), the service PMI in contracting (49.2 vs. 50.3) for the first time since March.  The composite was dragged lower and the 48.9 reading (from 50.2) is consistent with a contraction in output. Australia's preliminary August PMI was similar as Japan's.  Slower manufacturing output (54.5 from 55.7), while the service sector contracted (49.6 from 50.9).  The composite slipped below the 50 boom/bust level to 49.8 from 51.1.  It is the fourth consecutive decline in the composite and the first sub-50 reading since January.  The Reserve Bank of Australia meets on September 6.  The futures market is not convinced that the poor PMI stands in the way of another 50 bp hike. In fact, the cash rate futures show the greatest chance (70%) of a half-point move this month, up from about 62.5% yesterday.   The dollar firmed to a marginal news high for the month against the yen today near JPY137.70.  Yesterday's high was about JPY137.65.  Today's session, so far, has been one of consolidation.  Initial support is seen around JPY137.00.  Only a close below JPY136.70 would challenge the bullish dollar posture.  Yesterday's Australian dollar bounce where it took out the pre-weekend high, ostensibly on the China's rate cuts was a bull trap.  It dropped almost 1% to nearly $0.6860 before finding support. It traded higher, even after the poor PMI and met sellers at $0.6900, who drove it to a marginal new low (~$0.6855) since July 19.  In choppy trading it is firmer in Europe.  A move above $0.6900 would be helpful, but a push above $0.6930 would help lift the technical tone.  Meanwhile,  the yuan's adjustment lower continued and the Chinese currency fell to new two-year lows against the dollar.  The greenback reached CNY6.8660 before pulling back and is hovering around little changed levels around CNY6.8485 near midday in Europe.  The PBOC's dollar fix showed no sign of a protest.  It was set at CNY6.8523, a little above the Bloomberg survey median of CNY6.8511.   Europe The flash EMU PMI was poor.  The manufacturing sector was also unchanged at 49.7 (from 49.8), while the service sector is barely expanding (50.2 vs. 51.2).  The composite showed output falling further (49.2 vs. 49.9).  It is the lowest the composite has been since early last year. All three measures in Germany remained below 50, thought the manufacturing sector, a little less so (49.8 vs 49.3).  While the German composite had fallen below 50 in July (and sank further in August, 47.6 vs. 48.1), the French composite slipped below 50 (49.8) for the first time since February 2021.   The UK flash PMI was softer but the mixed.  The manufacturing PMI sunk to 46.0 from 52.1, well below expectations, and the magnitude of the drop was notable, especially after having fallen for the previous three months.  The services PMI was little changed at 52.5 from 52.6, and above expectations.  The composite eased to 50.9 from 52.1.  It is the lowest reading since early last year.  Here too the market does not seem dissuaded from its rate hike expectations.  The swaps market is fully pricing in a 50 bp hike at the mid-September BOE meeting and about a 1-in-3 chance of a 75 bp move instead.  By that time, a new Tory leader and Prime Minister will likely be providing some additional fiscal support.  The Dutch natural gas European benchmark (one-month forward) has doubled here in Q3 after more than doubling in the first half.  By some estimates, it has reached the equivalent of $500 a barrel for crude oil.  The energy crisis, which is being exacerbated by a severe drought, has eclipsed Covid as the most pressing European challenge.  It is a blow that makes a recession practically unavoidable and contribute to the pressure on the euro, which fell to new 20-year lows.  The one-year forward of German electricity rose by more than a quarter yesterday to a record 710 euros for a megawatt hour before pulling back, which is almost twice as much it was at the end of July.  In France, a similar contract rose 16% to 840 euros, more than 2/3 higher than at the end of last month. French nuclear reactors were operating at 43% of their capacity yesterday, down from 48% before the weekend.  There was an unplanned outage at one plant and another two were halted for scheduled maintenance.   German Chancellor Scholz was in Canada yesterday trying to secure supplies.  His government is still debating about extending the life of three nuclear plants that are scheduled to shutdown at the end of the year.  Economic Minister Habeck noted that the extending the deadline would save, at most, 2% of German gas consumption.  However, he did leave open the possibility that the Isar 2 plant in Bavaria might be extended.   The low water level having limited the energy shipments on the Rhine.  Bavaria produces the most solar power among German states, it has a restrictive wind turbine licensing regime.  Habeck was also critical of Bavaria for neglecting other sources of energy generation and blocked the expansion of power transmission lines to bring wind energy from northern Germany to its industry.  There is fear that the Gazprom's three-day shutdown of the Nord Stream 1 pipelines August 31 is a prelude to and extended stoppage.   After hovering tightly below $0.9950 for most of the Asian session, the poor PMI seemed to drive the euro to the session low near $0.9900 before the single currency recovered back to $0.9950. A 600 mln euro option there expires today.  Thursday and Friday see a combined 3 bln euro in options at $1.0 expire, while on Friday, 2 bln euros of options at $0.9850 roll off.  The bears are in the driver’s seat.  Sterling was sold to a new low as well, dipped briefly through $1.1720.  In the five sessions through today, sterling has fallen nearly 4.25-cents.  It has met the measuring objective of the double top pattern that had unfold in the first half of the month.  The $1.1780-$1.1825 band offers the nearby cap.   America The Fed funds futures market sees the greatest chance of a 75 bp hike next month since the bounce after the surprisingly strong employment report on August 5.  Yesterday's increase was third in a row and the most since that jobs report.  The two-year note yield jumped a little more than 10 bp to 3.34%, the upper end of where it has traded for two months. The only data out yesterday was the Chicago Fed's national activity report, which blew away market expectations by rising to 0.27 instead falling to -.25. However, that report was for July and today's the preliminary August PMI is due.  Moreover, markets typically do not put much emphasis on this report.  Instead, it seems the market is positioning ahead of Powell's Jackson Hole speech.   The US also reports new homes sales.  The July housing starts and existing home sales were weaker than expected and the risk to the Blomberg survey median for a 2.5% fall is on the downside.  That said, it is clear that slower housing market activity is desirable by the Federal Reserve as part of its effort to tighten financial conditions.   The EU seems to think Iran's response to its proposal was "reasonable" seems to add pressure on the US.  However, Saudi Arabia's oil minister made an unexpected move.  Claiming that the lack of liquidity and extreme volatility in the oil market was diverging from "fundamentals" and that OPEC+ may be forced to respond.  In this context, the "response" would be to reduce supply.  Although the oil minister did not link his comments to the possibility of Iranian oil returning to the market, this seemed to be the subtext, and the oil market responded accordingly.  October WTI, which had been off a little more than 4% yesterday recovered nearly fully in late dealings.  From almost $86.25, October WTI settled near $90.35.  It has traded above $92.00 today for the first time since August 12.  The US dollar made a marginal new high for the month against the Canadian dollar earlier today, just shy of CAD1.3065.  However, a consolidative tone has emerged.  Initial support is seen in the CAD1.2990-CAD1.3000 area.  A break below CAD1.2965 would lift the Loonie's tone and would likely coincide with stronger equity market gains.  The S&P 500 and NASDAQ gapped lower yesterday, and the gaps appears on the weekly charts, and leave bearish island tops behind. Those gaps are important from technical perspective and are either breakaway gaps or measuring gaps, and in either case bearish.  That would seem to warn about the downside risks to the Canadian dollar, which is particularly sensitive to the risk environment.  The Mexican peso is faring better.  The US dollar did not take out the pre-weekend high (~MXN20.2670) yesterday and is set to start the North American session at a three-day low.  Around MXN20.04, the US dollar retraces 50% of what it gained since the August 15 low (~MXN19.8125).  The next corrective target is around MXN19.9860.       Disclaimer Source: Surging Energy Prices Pushing Europe Closer to Recession

Yesterday, the Australian dollar fell by 20 points, and this morning it has grown by 25 points. There is resistance at 0.6950 just ahead, the Marlin Oscillator is near the zero line.     If there is a simultaneous price transition above 0.6950 and the Marlin Oscillator into the positive area, then the price will receive an impulse to grow to the target level of 0.7015. But if there is a price reversal and the oscillator, then an attack will be made again at 0.6870. The subsequent departure under the support opens the 0.6755 target.     The price resistance of 0.6950 worked out the MACD line on a four-hour scale, the level increased. Accordingly, either a price reversal, completion of the correction, or, after consolidating above the level, it could possibly rise to 0.7015. The Marlin Oscillator is still upside, so the situation is equivalent in both scenarios. Relevance up to 04:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/319839

Federal Chairman Jerome Powell, speaking at a symposium in Jackson Hole, did everything to make the market finally realize that the central bank will stop at nothing in its plan to curb inflation in America. In the last article, we suggested that if the head of the Fed did not throw a surprise at the markets, then it would be possible to observe another local rally in the stock and other asset markets with a simultaneous increase in demand for government bonds and a weakening of the US dollar. And that would very likely have been the case if Powell hadn't made a targeted statement pointing out that while controlling inflation through higher interest rates, slower growth and softer labor market conditions would hurt households and businesses , "failure to restore price stability will mean much more pain" in the long run. It seems that weak hopes have finally collapsed, and this largely confirms the recovery in the growth of treasury yields amid falling demand for them. The yield of the 10-year T-Bond benchmark is already confidently staying above the 3% level and, after a slight downward correction, resumed growth. It is likely that a further sell-off in the government debt market will push it up to an immediate high of 3.5%. How will the US dollar behave in the context of continued aggressive rate hikes and growth in Treasury yields? We believe that it will have to further strengthen against major currencies, despite the fact that rates will also rise in other economically developed countries of Europe, Canada, Australia, and so on. Here it will be supported by the growth of Treasury yields and the flight of capital from Europe, as well as from countries with emerging economies, with the exception of Russia and China. In this case, we can expect the growth of the dollar index ICE to the mark first at 110, and then to 111 points. In fact, it will be possible to say that the dollar exchange rate against major currencies will linger for a long time at the level of the beginning of this century. As for the possible dynamics of the markets this week, the release of data on inflation in the eurozone, which is expected to rise again, and, of course, the latest figures on unemployment in America, will play a leading role here. Considering the Fed's general position regarding rates, we believe that if the data on the number of new jobs comes out no worse than expected, the US central bank will once again be confident that it is on the right course, fighting inflation and using the still strong labor market for this, trying to bring down the economy before serious problems arise, like a high temperature with aspirin, by aggressively raising interest rates. It is likely that after local consolidation, the smooth strengthening of the dollar will continue, and the markets will remain between the hammer of Fed rates and the anvil of inflation. Forecast of the day:     AUDUSD pair The pair is trading below 0.6865. Consolidation below this mark may be the basis for the pair's fall to 0.6800. USD/JPY pair The pair is at the level of 138.90. If it does not settle above it, it may correct down to 138.45, and then again rush to 139.40. Relevance up to 09:00 2022-08-31 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320143

The Australian dollar has started the week in negative territory, extending the sharp losses seen on Friday. In the European session, AUD/USD is trading at 0.6849, down 0.63%. US dollar flies after Powell’s rate remarks The US dollar ended the week on a high note, courtesy of Fed Chair’s hawkish speech at the Jackson Hole Symposium on Friday. Powell’s message didn’t veer from what the Fed has been telegraphing the markets for weeks, but this time around investors internalized the message, which sent the equity markets reeling before the weekend. Powell stated that the Fed would continue to use all its tools to fight inflation, acknowledging that high interest rates would remain for some time, and the Fed would be careful not to ease policy prematurely. Significantly, Powell said that the Fed would not change policy based on one or two reports of lower inflation. This statement could well have been a response to the market euphoria about a Fed U-turn in policy after July’s inflation dropped unexpectedly. Powell’s speech was unusually brief, which may have been an attempt to prevent investors from looking for some dovish remarks in the speech and ignoring Powell’s message. The concise speech left no room for ambiguity – the Fed will continue to raise rates until it’s convinced that inflation has peaked and is on the decline. In Australia, retail sales bounced back in July with a strong 1.3% gain, blowing past the estimate of 0.3% and above the 0.2% reading in June. The reading hasn’t helped the Aussie any, as investors continue to digest Powell’s speech at Jackson Hole. The RBA meets next week, and the rebound in retail sales will make it easier for the central bank to remain aggressive and deliver a 50 basis point hike for a fourth straight time. AUD/USD Technical There is resistance at 0.6919, followed by a monthly resistance line at 0.6983 0.6830 is a weak support line. Below, there is support at 0.6766 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie tumbles after hawkish Powell - MarketPulseMarketPulse

Summary:  The US dollar hasn’t been able to sustain a new rally after Fed Chair Powell’s speech on Friday, with further risk of weakness if incoming data doesn’t bring new upside pressure on US yields. A new thaw in risk sentiment has the USD also teetering on the verge of a reversal lower versus the G10 commodity dollars as well, with the technical outlook finely balanced in pairs like AUDUSD and USDCAD. Incoming data could bring a bump ride through the August CPI number on September 13. FX Trading focus: USD bulls on the defensive ahead of key data. EURUSD squeeze risk picks up above 1.0100 EURUSD has squeezed back higher this morning, and looks ready for a poke above 1.0100 if the minor US data points ahead of Friday’s US jobs report (today’s Consumer Confidence survey and JOLTS survey and Thursday’s August ISM Manufacturing survey) don’t offer any drama. But conviction is lacking as long as EURUSD remains within the seeming tractor-beam pull of parity and it is tough to develop conviction until we have had a look at the Friday’s US jobs report (big Average Hourly Earnings surprises may carry more weight than payrolls due to the inflation angle of earnings), the ISM Services survey on Tuesday (completely at odds with the alternative S&P Global non-manufacturing survey in July when the latter showed a slightly contraction while the July ISM Services was still a robust 56+. The flash August S&P Global reading worsened further to 44.0.), and most of all the August CPI release on September 13, given that the Fed has pre-declared that it is willing to tolerate economic weakness if inflation is not yet under control. ECB Chief Economist Lane was out yesterday arguing for a “steady” pace of “smaller” rate hikes rather than large moves – presumably a series of 50 basis point moves – to avoid “adverse effects” and as Lane believes that this would make it easier for ECB to course correct. This seemed to help cut short the EUR rally yesterday, but rate expectations for the ECB meeting next week are still around 50/50 for a 75-basis-point move, somewhat lower than they were at the peak yesterday after the hawkish speech from the ECB’s Schnabel at the Fed’s Jackson Hole conference at the weekend.  The German flash August CPI will be out around pixel time for this article. Chart: EURUSDThe US dollar backing off today and EURUSD pulls back above parity again after bobbing back and forth around that level yesterday and into this morning. The move likely only picks up likely order-driven momentum tactically on a move above 1.0100 and we face a further cavalcade of incoming data tests for the USD through the August US CPI figure as noted above, and for the EUR side of the equation, the test is next Thursday’s ECB meeting as well as whether Russia turns the gas back on next week after the purported maintenance of the Nord Stream 1 pipeline in coming days. A squeeze scenario could see 1.0200, with anything above that beginning to suggest at least an intermediate challenge of the down-trend. Short term long option strangles are one way to trade for zany choppiness in coming sessions (A long strangle approach is an idea for the indecisive trader, or the one that believes that we might see a squeeze on a move above 1.0100 but one that won’t hold – for example long 1.0125 calls and long 0.9975 puts w/ expiry next Wed. or Thursday, or a trader can simply choose one or the other leg if biased.) Source: Saxo Group Elsewhere, the tactical situation could not be more in limbo in pairs like AUDUSD and USDCAD, which teased a break in favour of a stronger US dollar, only to dive back into the range, if with insufficient force to suggest a tradable reversal. The trading conditions might remain treacherous there at least until the other side of the US jobs report. A CAD supportive crude rally, meanwhile, is fading fast today. Table: FX Board of G10 and CNH trend evolution and strength.The US dollar is still top dog, but the Euro momentum has impressed in the wake of ECB guidance in recent days. Leading the race to the bottom is GBP. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.EURCHF is on the verge of flipping to positive for the first time in a very long time (last negative signal an impressive 53 days so far), EURGBP went positive so two sessions ago, and EURJPY did so yesterday. Still some work to get EURUSD there…. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1200 – Hungary Rate Decision 1200 – US Fed’s Barkin (Non-voter) to speak 1200 – Germany Aug. Flash CPI 1300 – US Jun. S&P CoreLogic Home Price Index 1400 – US Aug. Consumer Confidence 1400 – US Jul. JOLTS Job Openings 1500 – US Fed’s Williams (voter) to speak 1600 – ECB Speakers Holzmann and others 0130 – China Aug. Manufacturing/Non-manufacturing PMI   Source: FX Update: USD suddenly on defensive ahead of data.

Overview:  The rise in global interest rates continues. The US 10-year yield is a few basis points to near 3.15% and European benchmarks are mostly 5-6 bp higher. Of note, the sharp sell-off in UK Gilts is being extended. Yesterday’s 10 bp rise has been followed by another 14 bp surge today. Italian bonds are also getting hit. The 10-year yield is up a little more than 10 bp. The US dollar is mostly firmer against the major currencies, though the yen and Australian dollar are little changed. Among the emerging market currencies, a small number of Asian currencies, including the Chinese yuan and South Korean won are firmer, but most are under pressure. Equity markets in the Asia Pacific region were mixed, but the downside bias is evident in Europe, where the Stoxx 600 is lower for the fourth consecutive session and seven of the last nine. It is at new lows since mid-July. US futures are narrowly mixed and have a three-day loss in tow. Gold is also making new lows for the August and traded at $1711 having been above $1800 in the middle of the month. Iraq says its exports will not disrupted by the violent demonstrations helped the October WTI contract reverse lower yesterday (possible key downside reversal) and today it is testing the 200-day moving average near $89. US natgas is steady after falling 3.3% yesterday. Europe’s Dutch benchmark is up nearly 5% to snap a three-day slide of over 20%. Iron ore jumped nearly 3.8% to resurface above $100 and halt the two-day slide of almost 8%. December copper is slipping lower for the fourth session and is trading near four-week lows below $354. December wheat is slipping further after falling 2.7% yesterday.  Asia Pacific China's composite August PMI eased to 51.7 from 52.4. The contraction in the manufacturing sector continued with the PMI below 50 for the second consecutive month (49.4 vs. 49.0). The drought, power outages, Covid disruptions, and the ongoing drag from the end of the property bubble are hobbling the economy. The drop in supplier delivery times (49.5 from 50.1) are illustrative. Output and new orders continued to fall. The non-manufacturing PMI slowed to 52.6 from 53.8. Construction, reflecting, the emphasis of government efforts on manufacturing remained a bright spot at 56.5, albeit down from 59.2 in July. Japan's industrial production and retail sales were better than expected. Industrial production has surged 9.2% in June (month-over-month) in a response to the re-opening of Shanghai from Covid lockdowns and many expected a small pullback in in July. Instead, the preliminary estimate has it growing by another 1% in July. Autos, boilers, and turbines output grew, according to the report. Retail sales rose by 0.8% in July, more than twice the median in Bloomberg survey after the June series was revised to show a 1.3% decline rather than 1.4%. Autos, food, and beverages led the better-than-expected report. Today's data suggests a firm start to Q3. Economists expect the world's third-largest economy to expand by around 2.0% in Q3. The US claims, and echoed by many media outlets, that it is not seeking to change the status quo about Taiwan, but that Beijing is. Beijing claims that it is the US that is the antagonist. Both assessments seem correct. Leave aside Pelosi's visit and the other official visits, often using US military aircraft. Forget about reports of US military advisers in Taiwan for nearly two years. Consider a bill before Congress that proposes to declare Taiwan an important non-NATO ally. Consider Senator Blackburn's suggestion earlier this week that it is "may be" time to revisit the US one-China policy President Biden has intimated as much on several occasions only to have his comments "walked back." Beijing is no innocent bystander. It continues to harass Taiwan and challenge others in the South China Sea, including the Philippines and Japan. Yesterday, Taiwan fired warning shots for the first time at a PRC drone near an offshore island. Beijing struck a secret deal with the Solomon Islands a few months ago and one of the consequences has become clearer in recent days. Last week, a US coast guard ship was denied refueling permission by the Solomon Islands, which has declared a moratorium on all US Navy visits pending an update of its protocol of procedures. The US embassy was closed in the Solomon Islands nearly two decades ago, but plans on re-opening it, according to press reports earlier this year. The yen did not react much to the better-than-expected local data, and the firm US yields kept the US dollar firm. The greenback is little changed, but so far, holding below yesterday's high slightly above JPY139.05. It is also holding above yesterday's low just above JPY138.00, where the five-day moving average is found. The Australian dollar finished North American session on its lows yesterday, near $0.6855. There has been no follow-through selling yet today and the Aussie poked above $0.6900 before finding new offers, which is also where the five-day moving average is found. Position-adjusting around the expiration of options for A$400 mln today at $0.6875 and tomorrow for A$720 mln at $0.6867 may be contributing to the choppy tone. For the sixth consecutive session, the PBOC set the dollar's reference rate below market expectations (Bloomberg survey) as CNY6.8906 vs. CNY6.9083. The dollar gapped higher on Monday against the yuan. It entered the gap today, which extends to last Friday's high around CNY6.8730 and recorded a low near CNY6.8870. Its sideways movement follows a two-and-a-half week gain of about 2.3%. Europe France reported slightly softer inflation but also considerably weak consumer spending. The EU harmonized CPI rose 0.4% in August for a 6.5% year-over-year rise (6.8% in July). France caps on energy prices run until the end of the year, but the government is considering new measures and the EU is considering collective action. Service price inflation was sustained, and food and manufactured goods prices accelerated. Consumer spending fell 0.8% in July compared with a 0.2% decline median projection in Bloomberg's survey. June's 0.2% increase was shaved to 0.1%. The third quarter is off to a weak start. After contracting by 0.2% in in Q1, the French economy expanded by 0.5% in Q2. The 0.3% forecast for Q3 might be a bit optimistic. Italy's harmonized CPI jumped to 9.0% from 8.4%. Many economists had hoped for a dip to 8.2%. The month-over-month gain of 0.8% followed a 1.1% decline in July. Recall that yesterday's German inflation edged up to 8.8% from 8.5% and Spain's eased to 10.3% from 10.7%. The aggregate eurozone inflation figures were worse than expected. The headline rose to 9.1% from 8.9%. However, more troubling was the jump in the core rate to 4.3% from 4.0%. The median forecast in Bloomberg's survey looked for a 4.1% year-over-year core rate. The euro was sold to session lows (~$0.;9975) a few minutes before the report. The swaps market is pricing in a slightly greater chance of a 75 bp hike next week by the ECB, just shy of a 66% chance. It was about 50% at the end of last week. There is a dramatic interest rate adjustment taking place in Europe, which over time, will likely impact the foreign exchange market. Yesterday, we noted that the Germany two-year interest rate more than doubled in the past two weeks (from about 0.50% on August 16 to almost 1.20% on Monday and about 1.18% today). This has overwhelmed the increase in US yields and sliced the US premium to about 230 bp, the lowest since early July. The UK 2-year Gilt is not slouch. It has played a bit of catch-up yesterday and traded above 3% for the first time since 2008. It spent most of July and the first half of August below 2%. At the start of the year, the UK and US two-year yields were near parity. The more aggressive trajectory of Fed policy had given the US a 135 bp premium as recently as mid-August. The premium has collapsed to around 45 bp, the least since mid-March. After holding above $0.9900 on Monday's test, the euro reached $1.0055 yesterday before sold in North America back down to $0.9980. Today's low has been about $0.9975, and the intraday momentum indicators suggest it could stabilize for a little. The nearby cap may be around $1.0020. With the August CPI estimate behind it, the next two key events are this Friday's US jobs report and next week's ECB meeting. Sterling was sold to new two-year lows yesterday near $1.1620 and remains pinned in the trough today. It has recorded lower highs this week, and today, for the first, time has not traded above $1.1700. However, like the euro, the intraday momentum indicators for sterling suggest some consolidation is likely in the North American morning. America Two recent business surveys have caught our attention. First, a survey of CFOs by Deloitte found that 73% regarded persistent inflation as bigger threat than a recession, with the other 27% more concerns about a recession. What is a bit surprising by this is that judging from the recent earnings many businesses have been able to lift prices to more than covering rising costs, including wages. Adjusted pre-tax profits rose 6.1% in Q2 over Q1, which had seen a 2.2% decline quarter-over-quarter. By another metric that measures pre-tax profits as a percentage of gross value added, corporate profit margins rose 15.5% in Q2, the widest in more than 70 years. Separately, and somewhat less surprising, a survey by the US-China Business Council of its 117 members found over half attributed plans to cancel or delay investment plans in China due to its Covid-related restrictions. Most said the negative effects were reversible, but 44% said it would take "years" to restore confidence. ADP launches a new methodology for its estimate of private sector employment today. In its press release, it claims the report will be more robust, using granulated data based on payrolls covering 25 mln US workers. In addition, estimate of the current month's nonfarm private sector employment change, it will also provide weekly data from the previous month by industry and business size. A new pay measure is also being introduced. ADP did not provide an estimate for July, pending this methodological change. The median forecast in Bloomberg's survey of 15 economists is for a 300k increase, though the average is a bit lower at 280k. Yesterday's report on job openings (July JOLTS) was around 850k more than expected and the June series was revised higher. The Fed funds futures are pricing in about a 75% chance that the third 75 bp hike will be delivered next month. It was about a two-thirds chance before Fed Chair Powell spoke at Jackson Hole. The dramatically smaller than expected Canadian Q2 current account surplus reported yesterday (C$2.7 bln rather than the C$6.8 bln expected warns of downside risks with today's Q2 GDP report. The current account surplus in the first quarter was revised sharply as well (C$2.7 bln from C$5.0 bln). Bloomberg' survey of a dozen economist generated a median forecast of 4.4% annualized pace after 3.1% expansion in Q1. The monthly GDP figures are more troubling. The cumulative monthly increases n Q1 were 1.4%. June figures will be reported today. The median forecast calls for a 0.1% increase, which would bring the Q2 cumulative increase to 0.4%. We note that Canada's 10-year breakeven has risen from about 1.93% at the start of last week to 2.20% today. On the other hand, the five-year breakeven has eased about six basis points at the same time and is below 2.10% today. The Bank of Canada meets next week, and although the market flirted with another 100 bp increase, it appears to recognize a 75 bp move is more likely. Separately, a small and minor cabinet reshuffle is expected later today, with no policy implications.   The US dollar is trading at new highs for the month today against the Canadian dollar. Yesterday, it traded above CAD1.31 for only the third time this year but closed slightly below it. It is extending the leg up that began last week near CAD1.29 and has approached CAD1.3115. The spike high recorded in the middle of last month was near CAD1.3225. The intraday momentum indicators are stretched but the key remains the broader risk appetite (S&P 500 proxy). Initial support now may be in CAD1.3060-80 area. The greenback is trading firmly against the Mexican peso and is near a seven-day high above MXN20.22. The high set on August 19 around MXN20.2670 is the key to the immediate outlook. A move above it, could spur a move toward MXN20.35-37. But, if it holds, it may signal a consolidative phase. That said, note that the five-day moving average is poised to cross above the 20-day moving average for the first time since late July.    Disclaimer   Source: EMU August CPI at 9.1%, while the Core Rate Jumps to 4.3%

The Australian dollar has stabilized today after sharp losses on Tuesday. In the European session, AUD/USD is trading at 0.6853, unchanged on the day. Construction Work Done slides Australia’s construction sector continues to post soft numbers this week. Construction Work Done fell 3.8% in Q2 (vs -0.9% in Q1), shy of the market consensus of 0.9%. This key indicator has been struggling, with two declines in the past three quarters. On Tuesday, Building Permits tumbled 17.2% in August (vs -0.6% in July), well off the estimate of -3.1%. The weak data should serve as a reminder the Australian economy is showing signs of slowing down, as the Reserve Bank of Australia’s aggressive tightening cycle is showing results. The RBA meets next on September 6th. In all likelihood, the RBA will deliver a 0.50% increase, as inflation hasn’t shown any signs of peaking. In the second quarter, inflation rose to 6.1%, up from 5.1% in Q1. Policy makers are hoping to avoid a recession and guide the economy to a soft landing, but the central bank, like the Fed, has made clear that its paramount goal is to curb inflation and avoid inflation expectations from becoming anchored. In the aftermath of Fed Chair Powell’s no-nonsense speech at Jackson Hole last week, the markets seem to have heard Powell’s message loud and clear. The markets have priced in a 75 basis point hike at 72.5%, with a 50bp increase at 27.5%, according to CME’s FedWatch. Just yesterday, the odds were 65%-35%, and we can expect further movement in market pricing as investors look for clues as to what the Fed has planned at the September 21st meeting. The Fed has stated that its rate decisions will be data-dependent, which means that Friday’s non-farm employment report could be a market-mover. AUD/USD Technical There is resistance at 0.6919, followed by resistance at 0.6983 0.6830 is providing support, followed by 0.6766 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie shrugs off soft construction data - MarketPulseMarketPulse

USD off to a strong start at the beginning of September Source: shutterstock Macro outlook Global markets: US equities continued their slow bleed on Wednesday, the S&P500 dropping another 0.78% and the NASDAQ going 0.56% lower. This wasn’t exactly a one-way street, with some periods of strength within the session, but the downtrend was never seriously threatened. Equity futures are poised for more weakness today too, which could set the scene for other asset markets today ahead of tomorrow’s payrolls release. 2Y US Treasury yields added another 5.1bp yesterday, which probably didn’t help the tone in equities, and 10Y yields put on another 9bp to reach 3.19%.  News from the Fed: Loretta Mester is reported as saying that she favours rates above 4% next year and no cut in rates in 2023. That probably helped keep Treasury yields rising across the curve. But despite the downbeat market sentiment and rising USD rates EURUSD managed to rise to 1.004, up from 1.001 this time yesterday. In contrast, the AUD is looking troubled again today following its sell-off yesterday and sits at 0.6835, and looks more likely to keep going down than head back up. Cable too looks in bad shape, dropping to 1.1599 and the JPY is hurtling upwards and at 139.29, the question is, do we hit 140 today? Asian FX saw some decent gains from the KRW yesterday, which pulled back to 1338. The INR is also still benefitting from rumours of the inclusion of government securities into global bond indices. Today, the USD looks rampant, however, and it may well be a different story. G-7 Macro: Yesterday’s ADP survey was published with a new methodology to make it more accurate (in line with payrolls) and it delivered a weakish looking 132,000 employment gain. It’s impossible to tell if this will be reflected in tomorrow’s jobs report, but it does seem to suggest that at least a slowdown from 528,000 jobs gain reported in July is on the cards. Manufacturing ISM data is the main release from the G-7 today. A slight decrease from last month’s 52.8 reading is the median expectation. The prices paid index is also expected to come down a bit more from last month’s reading of 60.0. There are also PMI releases in Europe and German retail sales to watch out for. India: Indian 2Q22 GDP wasn’t quite as punchy as had been expected, though the heavily base-affected release is a little tricky to interpret right now. A 13.5% YoY gain was a bit down on the 15.3% increase that had been expected, but probably still leaves India on track to achieve 7% growth this calendar year. Strong investment (+20.1%YoY) and private consumption (25.9%) underpinned the result. Though the boost from the re-opening of the economy will probably fade next quarter, and the economy will face stronger headwinds from falling external demand, higher inflation and rising domestic interest rates.  The fiscal deficit figures for July actually registered a small surplus, which is an improvement on last year’s equivalent fiscal balance and should keep India on track to meeting or even beating its 6.4% (GDP) deficit target. Australia: Private capital expenditure released at 0930 SGT provides the first insight into next week’s 2Q22 GDP figure. The median forecast is for a 1% gain. A further clue comes the day before the release when we get the net trade contribution component. We are tentatively looking for a robust 1% QoQ expansion of activity in 2Q22, which will add to the pressure on the Reserve Bank to keep leaning against inflation. Korea:  The trade deficit widened to a record USD -9.4 billion in August, almost double the USD 4.8 billion deficit recorded in July. Exports grew 6.6% YoY in August (vs a revised 9.2% in July and a market consensus of 5.6%). As early data suggested, semiconductor exports were quite weak with a -7.8% drop while petroleum/chemical and automobiles led the growth. Meanwhile, imports surged 28.2% YoY in August (vs 21.8% in July and market consensus of 23.7%) due to increases in energy, semiconductors, and chemicals. Separately, Korea’s manufacturing PMI fell to 47.6 in August from 49.8 in July. This is its lowest reading since July 2020. The output index fell to only 44.6, staying below 50 for the fourth month in a row. Combining this weak PMI data with the trade deficit data and yesterday’s weaker-than-expected industrial production outcomes, we are revising our growth forecast lower for the second half of the year and now expect a small contraction Indonesia:  August inflation is set for release today.  Both headline and core inflation have been on an uptrend this year with headline inflation now past the central bank’s target.  Headline inflation will likely settle close to 5%YoY while core inflation should exceed 3%.  Accelerating inflation and a planned subsidized fuel hike were enough to prod Bank Indonesia to finally hike rates at their last meeting and we believe that BI is not done for the year.  Faster inflation, especially after the fuel hike should keep BI on a hiking path.  What to look out for: Regional PMI manufacturing and US NFP South Korea GDP and trade (1 September) Regional PMI manufacturing (1 September) China Caixin PMI manufacturing (1 September) Indonesia CPI inflation (1 September) US initial jobless claims and ISM manufacturing (1 September) Fed's Bostic speaks (2 September)  South Korea CPI inflation (2 September) US non-farm payrolls and factory orders (2 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Last month was quite difficult for investors as they expected the Fed to tone down the rate increases, but the members insisted the opposite. It resulted to extremely high volatility, which led to a sharp decline in the stock indices of both Europe and the US. The situation in the forex market, meanwhile, was ambiguous because traders no longer believe that after a pause in raising interest rates in August, the Fed will lift them by 0.25% to 0.50% in September. Even so, the central bank continues to say that it will take advantage of the situation of the labor market and continued business activity in order to decisively suppress inflation. Cleveland Fed President Loretta Mester confirmed this by remarking that rates could hit 4% early next year. Most likely, the central bank will stop only when the economy deteriorates. There is a 73% probability of a 0.75% increase in the discount rate this month, and following Mester's estimate, the Fed will raise rates either by 0.25% or by 50% at the remaining 3 more monetary policy meetings. In terms of public debt, sell-offs will continue in the US, which will support dollar. Stock indices, meanwhile, will decline further, interspersed with local rebounds. Oil quotes, on the other hand, are unlikely to drop noticeably because demand remains quite large for the time being. The decline observed recently was only caused by the growth of dollar and start of recession in Europe, which forces EU countries to save on energy resources. The military conflict in Ukraine is a factor as well. As such, there is a huge chance that dollar will rise after a local rebound. It will continue to dominate markets, putting pressure on commodity assets. The upcoming report on US jobless claims and index of business activity in the manufacturing sector of Germany, the eurozone and the US will affect sentiment. Forecasts for today: AUD/USD The pair corrected to 0.6840. If selling pressure increases, the quote will fall to 0.6700. GBP/USD Although the pair is trading above 1.1570, quotes could decrease if macroeconomic statistics come out weaker than the forecasts.       Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320526

The Australian dollar is showing limited movement today. In the European session, AUD/USD is trading at 0.6835, down 0.10%. Australian Capex falls for a second successive quarter Australian Private Capital Expenditure disappointed in Q2, with a reading of -0.3% (vs -0.3% in Q1), well below the forecast of 1.5%. This follows weak construction data on Tuesday, as Construction Work Done posted a second straight decline, coming in at -3.8% in Q2. These numbers are a further indication that the Australian economy is slowing down, as a weak global economy and higher interest rates have dampened economic activity. The Australian dollar has not reacted to these weak releases, as the currency is much more sensitive to global developments than internal data. The war in Ukraine has raised the price of energy and food imports for Australians and caused high inflation. As well, risk appetite has been dampened, and AUD/USD has tumbled about 650 points since the Russian invasion of Ukraine. Additionally, the Federal Reserve continues to tighten policy, and this has boosted the US dollar over the past few months. With Fed Chair Powell delivering a “read my lips” speech at Jackson Hole, pledging to continue raising rates, there is room for the Australian dollar to continue to lose ground. The RBA meets next on September 6th. In all likelihood, the RBA will deliver a 0.50% increase, as inflation hasn’t shown any signs of peaking. In the second quarter, inflation rose to 6.1%, up from 5.1% in Q1. Policy makers are hoping to avoid a recession and guide the economy to a soft landing, but the central bank, like the Fed, has made clear that its paramount goal is to curb inflation and avoid inflation expectations from becoming anchored. Read next: Italy: This Year's Gross Domestic Product (GDP) Is Expected To Hit Quite Impressive Level!| FXMAG.COM Investors will be keeping a close eye on US nonfarm payrolls on Friday. The markets are expecting a strong gain of 300 thousand for August, after the massive 528 thousand gain in July. A strong NFP will provide support to the Fed’s plans to remain aggressive and should boost the US dollar. Conversely, a weak reading will raise speculation that the Fed will have to ease up and the US dollar could react with losses. AUD/USD Technical There is resistance at 0.6919, followed by resistance at 0.6983 0.6830 is providing support, followed by 0.6766 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie yawns after Capex dips - MarketPulseMarketPulse

  Yesterday morning, the index of business activity in the manufacturing sector of Australia for July showed a decline to 49.3 from 52.5, the US dollar index showed a daily increase of 0.91%, and as a result, the aussie lost 0.89%. The price is approaching the target level of 0.6755 on the daily chart. Breaking the support opens the 0.6685 target. The general trend is down in the medium term, as the price develops below the indicator lines. The Marlin Oscillator is going down in the negative area. The price is also declining below both indicator lines on a four-hour scale. The Marlin Oscillator is developing in its lower half – in the downward trend territory. We are waiting for further weakening of the Australian currency.     Relevance up to 05:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320619

After three straight losing sessions, the Australian dollar is in positive territory today. In the European session, AUD/USD is trading at 0.6802, up 0.21%. It has been a rough stretch for the Australian dollar, which fell 2.89% in August. On Thursday, AUD/USD fell as low as 0.6771, its lowest level since July 15th. The Australian dollar is sensitive to risk and the black clouds hovering over Europe have sapped risk appetite and are weighing on the Aussie. Russia shuts Nord Stream 1  The war in Ukraine has raised the price of energy and food imports for Australians and caused high inflation. Headline CPI rose to 6.1% in Q2, the highest level since 1990. The potential energy crisis in Europe has badly strained relations between Western Europe and Russia and dampened risk sentiment. Moscow has shut down the Nord Stream 1 pipeline for three days of maintenance, although Germany has charged that this is a pretense and the pipeline is fully operational. If the gas flow is not renewed on Saturday, we could have a full-blown energy crisis come Monday morning. In addition, The Federal Reserve’s hawkish policy, which finally has been internalized by the markets, has boosted the US dollar, which has made broad gains against the major currencies. The RBA has its hands full with rising inflation and a slowing economy. Policy makers are hoping to avoid a recession and guide the economy to a soft landing, but the central bank, like the Fed, has made clear that its paramount goal is to curb inflation and avoid inflation expectations from becoming anchored. The RBA meets on September 6th and the markets have priced in a 0.50% hike, which would be the third consecutive 0.50% increase. All eyes are on the US nonfarm payrolls report, which could result in volatility in the currency markets in the North American session.  The markets are expecting a strong gain of 300 thousand, and a reading around this level would indicate that the labour market remains strong. This could push the US dollar higher, as the Fed is relying on a robust labour market to continue with sharp rate increases. However, a weak NFP report could weigh on the US dollar, as it would force the Fed to consider easing policy, which could mean a 0.50% hike in September rather than a 0.75% increase. . AUD/USD Technical 0.6830 is a weak resistance line, followed by resistance at 0.6919 There is support at 0.6766 and 0.6677 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The Australian dollar shows growth both yesterday and this morning. Structurally, this growth is corrective, it can end at a strong level of coincidence of the target level of 0.6870 and the MACD line. If the Marlin oscillator has an effective upper limit of the falling wedge, then the price may reverse downward from the current levels today. The price approached the MACD indicator line on the four-hour chart. It can provide a price reversal down in the near future. But the Marlin Oscillator is in the positive area and this is a sign of continued growth towards the target of 0.6870. We are following developments.     Relevance up to 04:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320873

Reserve Bank of Australia rate action today's main focus Source: shutterstock Macro outlook Global: US markets were closed for Labor Day yesterday, though European bourses were mostly in the red and if early trading out of New Zealand is any guide, Asia Pacific markets will not open today in an ebullient mood. There is no Treasury pricing to consider today because of yesterday’s holiday. But bond futures seem to suggest some further upward creep in 10Y yields today. EURUSD is roughly unchanged from this time yesterday, though did have a look at pushing below 0.988 before recovering to sit at 0.994 currently. The AUD is looking a touch stronger at 0.6814, and Cable is also looking a bit less weak at 1.1555 as the UK takes on a new Prime Minister. The JPY lost some further ground yesterday but is looking a bit perkier in early trading today, moving down to 140.46. Asian currencies were mostly soft against the USD yesterday.  G-7 Macro: There’s not much on the G-7 Macro calendar today and the main overnight news is the token supply target cut by OPEC+ (see here for more on this) Australia: The Reserve Bank of Australia (RBA) will decide how much to raise the cash rate today, with most analysts looking for a 50bp increase to 2.35%, though a few are forecasting only a 25bp move. Analysts have been making a lot out of some text in recent RBA statements noting that rates were not on a "preset path", though it seems a bit of a leap to view this as code for “rates will be increased at a slower pace”, which is how some are viewing it. Still, we’ll know soon enough. Philippines: Philippine August inflation is set for release today.  Market expectations point to a 6.4%YoY rise driven largely by substantial increases in the price of food, transport and utility items.  Transport groups have lobbied for a fare price increase which is expected to be granted within the week.  Meanwhile, storm damage from the recent typhoon will also likely nudge up prices for vegetables and fruit in the near term.  We expect inflation to stay elevated with the central bank likely hiking rates at each of the remaining policy meetings over the rest of the year.      What to look out for: ECB meeting Philippines CPI inflation (6 September) Australia RBA meeting (6 September) Taiwan CPI inflation (6 September) US ISM services (6 September) Australia GDP (7 September) China trade (7 September) Taiwan trade (7 September) US trade balance (7 September) Japan GDP (8 September) Australia trade balance (8 September) ECB policy meeting (8 September) US initial jobless claims (8 September) Philippines trade (9 September) China CPI inflation (9 September) US wholesale trade (9 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Australia's Reserve Bank raised its cash rate target a further 50bp to 2.35% at its meeting today. Rates may now increase at a slower pace over the remainder of the year, and AUD may struggle to recover amid external challenges The Reserve Bank of Australia today hiked rates by 50bp 2.35% Cash rate target +50bp As expected A hike today was never in doubt Today's 50bp hike in the cash rate target to 2.35% was comfortably the median expectation of forecasting analysts, though there were still a few who thought the Reserve Bank of Australia (RBA) might deliver a smaller 25bp hike. The logic for the smaller rate hike view stemmed from the language in the previous meeting's statement that there was no predetermined path for rates, though as it turned out, while that is probably true, it was not code to indicate a slowdown in the pace of tightening.  Now what? But now we are at 2.35%, which by some reckoning is close to a "neutral" rate that neither stimulates nor restricts the economy, there is a greater chance that rates may now continue to be raised at a slower pace. The latest statement to accompany today's decision repeats much of the text from the pivotal paragraph from August's meeting on future rate decisions. Namely: "The Board expects to increase interest rates further over the months ahead, but it is not on a pre-set path. The size and timing of future interest rate increases will be guided by the incoming data and the Board's assessment of the outlook for inflation and the labour market." This doesn't give much away and is essentially no change from August.    But one factor that may enable the RBA to tighten at a more moderate pace from now on is the fact that unlike some other central banks, such as the US Federal Reserve, the RBA meets monthly, so 25bp hikes at each of the remaining meetings this year will still take policy rates to the lower end of a restrictive setting by the year-end. And given the lags from policy changes to the real economy and inflation, tightening in 25bp increments from now on may be viewed as prudent and limiting the risks of over-tightening and damaging the economy unnecessarily. Such an approach would give more time for the economy to show signs that it is beginning to respond to the RBA's tightening "medicine", though of course, if the economy and inflation do not respond satisfactorily, there is nothing to stop further 50bp hikes.  AUD remains vulnerable The RBA policy has not been a major driver of AUD moves since the start of the year and today’s quite muted reaction to the 50bp rate hike is another case in point. Incidentally, a switch to 25bp rate increases from now on may force some dovish re-pricing in the RBA rate expectation curve. As external factors – in particular risk sentiment and China’s outlook – remain key for the AUD outlook in the near term, downside risks are still quite elevated. Our forecasts for AUD/USD still embed a small recovery by year-end but are mostly justified by USD seasonal weakness in December and any rally may still struggle to go far beyond the 0.70 mark. Read this article on THINK TagsRBA rate policy RBA rate decision Australian economy Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Surging bond yields won't help risk sentiment Source: shutterstock Macro outlook Global: US equities returned from their holiday yesterday, but the mood remained gloomy, with the S&P500 dropping 0.41% and the NASDAQ falling 0.74%. The session wasn’t particularly brutal. Both indices just fell at the open and stayed low. Equity futures remain in the red today, so the slow bleed in equities looks like it will continue today. However, given the sharp pick up in 2Y US Treasury yields (+11.6bp), it is a bit surprising that equities didn’t fall even more. 10Y yields also added 16bp, taking them to 3.349%. There is probably still some more upside here, but after these moves, we may see a bit of consolidation. Bond futures aren’t suggesting much direction currently. The EUR continues to lose ground to the USD, and EURUSD is now 0.9894. The AUD also took no comfort from yesterday’s 50bp rate hike from the Reserve Bank of Australia and has slid to 0.6729. At 1.1508, Cable is also well down and we are probably looking at a 1.14 handle before long. The JPY has also continued its ascent, rising to 143.24. It’s not clear what or how this dollar rampage will be ended. The USD is looking a bit overbought right now, so like bonds, we may see a pause in the carnage before too long. The CNY led the other Asia Pacific currencies in retreat yesterday, moving to 6.9545. G-7 Macro: European labour market and revised 2Q22 GDP figures are on today’s calendar, together with German July industrial production (-0.6%MoM fall expected). These are followed later by the US Trade numbers for July which are expected to show the trade deficit narrowing to USD70.2bn. Markets may withhold some of their firepower for tomorrow's ECB meeting.  Australia: At 0930 SGT, Australia releases its 2Q22 GDP numbers. We are looking for a slightly stronger than consensus 1.0%QoQ figure (consensus is 0.9%QoQ). Yesterday’s net export contribution and last week’s capex figures both indicate some upside to the consensus forecast. The GDP numbers won’t directly affect the RBA’s rate-setting thinking, but they will highlight the scale of the job that needs to be done to get inflation back down to target. China: China will release trade data today. We expect export growth to exceed import growth, leading to a trade balance of nearly USD100bn in August. Our expectation of almost no growth in imports reflects the weakness of the domestic economy, though the big trade balance could help support GDP growth slightly. Taiwan: Taiwan will also release trade data today. We should see a similar picture to that in Mainland China with exports growing faster than imports. The key detail to watch is semiconductor-related exports and imports. This is especially important for imports, which will provide a hint about the growth prospects of semiconductor exports that are so important for Taiwan’s economy. Korea: The current account balance recorded a surplus of USD 1.1bn in July but the goods trade account turned to a deficit of USD -1.2 bn, the first time it has done so since April 2012. This is mostly due to higher energy prices, but also, export growth slowed due to weak IT demand and weak exports to China.  In the financial account, domestic stock equity investments by foreigners declined for the sixth straight month, while bond investment continued its increase from January 2020. Japan: USDJPY slid to 143 for the first time since 1998. Rate differential widening is the main reason for this depreciation. The recent better-than-expected US data probably also pushed the yen weaker. USDJPY may show some correction this morning, but the trend direction is not likely to change any time soon. We expect there will be more verbal intervention but this is unlikely to be effective at this point. Japan’s last intervention to curb depreciation was in 1998 during the Asian financial crisis. Despite the yen’s rapid depreciation, we still don’t believe it will trigger a policy shift by the Bank of Japan. What to look out for: China trade data and ECB meeting Australia GDP (7 September) China trade (7 September) Taiwan trade (7 September) US trade balance (7 September) Japan GDP (8 September) Australia trade balance (8 September) ECB policy meeting (8 September) US initial jobless claims (8 September) Philippines trade (9 September) China CPI inflation (9 September) US wholesale trade (9 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

AUDUSD struggles for bids The Australian dollar takes a hit as risk appetite continues to recede across markets despite the RBA’s 50bp hike. A bearish MA cross on the daily chart shows a deterioration in sentiment. A fall below the demand zone near 0.6800 has left the aussie vulnerable. A lack of buying interest may send the pair to the recent lows around 0.6680, which is a critical floor to keep the price afloat in the medium-term. 0.6830 is a fresh hurdle but rebounds have so far been opportunities to sell at a better price. USOIL tests critical floor WTI crude weakens due to lingering concerns over demand. The recent bounce has failed to clear the daily resistance at 109.00, given back all its gains instead by retesting the base at 91.50. As sentiment remains pessimistic, the path of least resistance might still be down. A bearish breakout would force the bulls to bail out and attract momentum sellers, exacerbating volatility in the process. A drop below the psychological level of 90.00 could extend losses beyond 85.00. A recovery may be brief with 97.20 as the first resistance.   UK 100 in limited recovery The FTSE 100 struggles as the UK's finances might over-stretch with the energy crisis. On the daily chart, the index is going sideways between two boundaries 7000 and 7640. A breakout on either side would dictate the next direction in the weeks to come. In the meantime, range trading could be the name of the game. The short-term recovery is heading up to 7380, but 7480 from a faded bounce could be a tough level to crack. On the downside, 7180 is the immediate support and 7050 a major level to test the bulls’ resolve.

The last time we looked at AUD/USD on April 26, we supposed a corrective decline into the support area between 0.6490 to 0.6786. This area is now being tested and we could see a corrective low anytime now. To confirm that a corrective low is in place, we need to see a break above minor resistance at 0.7137 which would call for a new rally towards the S/H/S bottom neckline at 0.8040. A break above here will activate the bottom formation for a continuation higher to the 1.0255 target.   Relevance up to 06:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291702

At an annualised pace of more than 3.5%, the 2Q22 GDP data indicates the scale of the task facing the Reserve Bank in taming demand sufficiently to dampen inflation Source: istock 0.9% 2Q22 GDP quarter-on-quarter 3.6% year-on-year As expected Growth as expected - still strong though 2Q22 GDP growth in Australia was 0.9% quarter-on-quarter, in line with the market consensus, though the year-on-year rate came in a bit higher at 3.6% YoY from an expected 3.4%, due to downward revisions to previous GDP numbers, lifting the annual comparison.  2Q22 contributions to QoQ GDP growth by expenditure type Source: CEIC, ING Consumer spending remains strong The chart above illustrates the contribution to the GDP total growth figure from selected expenditure categories, and it sheds light on the problem facing the Reserve Bank of Australia (RBA). Firstly, household consumer spending is still growing rapidly, adding 1.1ppt to the headline figure. This will need to come down if overall demand is to soften sufficiently to dampen inflation. Private gross fixed capital formation (private capex) is looking much more subdued, which reflects weakness not just in residential construction, but across the whole investment spectrum. This segment of the economy has been soft for some time and it is unlikely to dramatically improve given the rates and tough external background...it could even get worse. Net exports (exports minus imports) are still doing a lot of the heavy lifting. Imports didn't deliver any drag this quarter and exports were a positive boost. But unless domestic demand softens, we should expect the contribution from this sector overall to diminish in the quarters ahead. There is also likely to be a boost next quarter from inventory accumulation, given the drawdown apparent this quarter, so we may be in for another similar headline figure of around 1.0% QoQ in 3Q22. If so, that would put full-year 2022 GDP growth on track to exceed 4% - not really conducive to getting inflation down rapidly and might indicate that rates will have to go higher and stay higher for longer to achieve the RBA's aim.  Read this article on THINK

AUD/USD has posted slight losses today, trading at 0.6726. This follows a disastrous Tuesday, when the Aussie fell 0.92%. Earlier, AUD/USD fell as low as 0.6999, its lowest level since July 14th. Australian GDP within expectations Australia’s GDP for Q2, released earlier today, has helped stabilize a wobbly Australian dollar. GDP posted a 0.9% gain, just shy of the estimate of 1.0% and above the 0.8% in Q4. Consumer spending remains robust, and the economy was supported by strong export numbers, as commodity prices remain high. The Australian dollar’s woes seem more a case of US dollar strength than AUD weakness. We are seeing global interest rate continue to head higher, which has dampened the appetite for risk-related assets, such as the Australian currency. An aggressive Federal Reserve, supported by solid US numbers, has boosted the greenback. Tuesday’s US ISM Services PMI rose to 56.9 in August, up from 56.7 in July and higher than the 55.1 estimate. The report pointed to an increase in business activity and strong consumer demand, despite high inflation and rising interest rates. The RBA delivered a fourth straight hike of 0.50% on Tuesday, but the sizeable increase failed to boost the Australian dollar, as the move had been anticipated by the markets. The Australian dollar has not been responsive to recent RBA moves, losing ground yesterday and after the July meeting. The cash rate is now at 2.35%, which is expected to hit 3% by the end of the year, with further hikes expected in 2023. Today’s move brings rates close to the neutral level of around 2.5%, which means that the RBA is likely to deliver one more 50bp hike and then scale back to 25bp increases, contingent on inflation and the strength of the labour market. AUD/USD Technical 0.6737 is a weak resistance line. Above, there is resistance at 0.6846 There is support at 0.6661 and 0.6552   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar steady ahead of BoC meeting - MarketPulseMarketPulse

The Australian dollar's growth amounted to 34 points on Wednesday, in today's Asian session, this growth has already been covered by a decline. The price transition above the resistance level of 0.6755 turned out to be false, respectively, the price is moving towards the 0.6685 target. Going under the level will open the 0.6640 target. The Marlin Oscillator has formed a descending wedge, the statistically predominant direction of exit from it is down. The initial conditions for the pound are decreasing. On a four-hour scale, the price is supported by convergence with the Marlin Oscillator. Another price jump up to the MACD line is possible. In this case, the predictive action of the level of 0.6755 will lose its value, it will move to the MACD line - a reversal from it and will mean a new wave of price decline in the short term (several days).       Relevance up to 04:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321106

Summary:  The combination of a nearly 6% drop in crude oil price, a retracement of the dollar to close to parity with the Euro and a 8bp fall in the 10-yar treasury yields have jointly put together an environment for the stock market to rally and snap a 7-day losing streak since the Jackson Hole. The Bank of Canada raise its policy rate by 75bps, as expected. August trade data from China was much weaker than expectation with both exports and import falling. Excluding inflation, real export growth was estimated to be negative and crude oil import growth in volume terms was negative in August. The news contributed to the fall in crude oil price yesterday. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  The U.S. equity markets bounced off from the trough of the post-Jackson Hole decline and snapped a 7-day losing streak to finish Wednesday decisively higher, S&P500 +1.8%, Nasdaq 100 +2.1%.  The move higher was largely driven by a confluence of macro factors: lower bond yields, and announcing new products at the company’s annual event.  lower US dollar, and lower crude oil price plus short covering and call option delta hedging. With a 5.7% decline in crude price, the energy space was the only sector in the S&P 500 that fell. Twitter (TWTR:xnys) surged 6.6% following a Delaware court rejected Elon Musk’s request to delay a trial into the reclination of his offer to acquire Twitter. Snap (SNAP:xnys) jumped 6.4% after the Verge magazine cited an internal memo from CEO Spiegel stating the company’s goals to grow its user base by 30% and bring up revenue by 20% by the end of 2022. Apple (AAPL:xnas) gained 1.4% after a new line of products at its annual event. Apple did not raise prices for its new iPhone 14 series.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Nick Timiraos at the Wall Street Journal (who is believed to be the Fed’s mouthpiece to guide market expectations) suggested that Fed Chair Powell’s “public pledge to reduce inflation even if it increases unemployment appears to have put the central bank on a path to raise interests by 0.75 percentage point rather than 0.50 point this month”. Fed Vice Chair Brainard pledged to fight against inflation “for as long as it takes” but also mentioned risks that might potentially be caused by over-tightening. The money market curve is pricing in a 78% chance a 75bp hike at the September FOMC. Treasury yields however fell across the curve as crude oil price went sharpy lower, 2-year yields -7bps, 10-year yield -8bps. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong stocks notably underperformed their mainland counterparts second day in a row.  Hang Seng Index lost 0.8% and Hang Seng Tech Index dropped 1.3% while CSI300 was little changed. Heavyweight financial names HSBC (00005:xhkg) and AIA Group (01299:xhkg) tumbled about 2%.  The short video and live streaming names dragged on the China Internet space, Kuaishou (01024:xhkg) -3.7%, Bilibili (09626:xhkg) -4.2%.  U.S. House Representative Dusty Johnson (Republican, South Dakota) introduced the Block the Tok Act, a bill that would if enacted, prohibit Tik Tok from accessing U.S. citizen’s user data from within China and block Tik Tok’s apps on U.S. government devices.  Tencent (00700:xhkg) is increasing its stake in French video game developer Ubisoft (UBIP:xpar) but the latter’s founder retaining majority control.  Following President Xi Jinping stressing China’s determination to “mobilize resources nationwide to achieve breakthroughs in core technologies in key fields” in a high-level reform planning meeting on Tuesday, semiconductor leader SMIC (00981:xhkg) gained 1.2%. China developer Soho China (00410:xhkg) jumped 11% after Chairman Pan Shiyi and CEO Pan Zhangxin Marita resigned.  The Covid-19-related lockdowns, a weakening yuan, the disappointing August trade data from China, and the rise in U.S. interest rates continued to pressure the sentiment of the stock market.     USDJPY holding up despite softer yields USDJPY eased after hitting highs of 145, but still remained above 144 in early Asian hours on Thursday despite softer US yields overnight. The threat of intervention remains as Japan’s final Q2 GDP released this morning suggests markets may continue to test the Bank of Japan’s resolve to keep an accommodative policy. Q2 GDP was revised higher to 3.5% q/q annualized from 2.2% earlier. 10Y JGB yields are also at 2-month highs and in close sights of the 0.25% cap. Verbal intervention has had little effect, and real intervention will need a coordinated effort and will only increase the volatility as long as the US yields are on the rise. The only real scope of a yen recovery will be seen if US economic data starts to deteriorate or Bank of Japan tweaks policy. Crude oil prices (CLU2 & LCOV2) Oil prices steadied in the Asian morning after steep declines in the last few days amid demand concerns especially with China pushing further with its zero Covid policy. Chengdu extended a lockdown in most of its downturn areas, raising concerns the restrictions will hurt oil consumption. A stronger dollar, despite softer yields, also weighed on investor appetite. Supply issues made little impact, even as EIA lowered its annual oil production targets, with domestic production now expected to reach 12.6mb/d, and raised its demand outlook, with annual petroleum usage rising 2mb/d through next year. The likelihood of an Iran nuclear deal in the near term is also fading. What to consider? Fed speakers, and another possible WSJ leak? Federal Reserve Vice Chair Brainard noted rates will need to rise further and policy will need to be restrictive for some time. She needs to see several months of low inflation readings to be confident inflation is moving down to 2% but how long it takes to get back to target will depend on a combination of continued easing in supply constraints, slower demand growth, and lower markups, against the backdrop of anchored expectations. Mester (2022 voter) reaffirmed that she is not yet convinced about inflation peaking yet, and she also spoke on the August jobs report, where she said they are beginning to see some moderations but labour market conditions remain strong. Besides, WSJ's Nic Timiraos wrote: "The Federal Reserve appears to be on a path to raise interest rates by another 0.75 percentage point this month in the wake of Chairman Jerome Powell’s public pledge to reduce inflation even if it increases unemployment." While the Fed is not yet in a blackout period, with Chair Powell set to be on the wires later today, there is little chance this could be a leak like last time. Still, money market pricing of a 75bps rate hike at the September meeting has picked up from 68% on Tuesday to 81% now. China’s exports in August slowed In U.S. dollar terms, China’s exports in August come in much weaker at +7.1% YoY (Bloomberg consensus: +13% YoY; July: +18.0% YoY).  Once adjusting the data with export price inflation, the real growth of exports may have turned negative in August YoY.  Export growth decelerated across destinations, except Russia (having risen to 26.4% YoY in August from 21.4% in July).   The growth of export to the U.S. was particularly weak, having turned to minus 4.2% YoY in August from a growth of 10.9% in July.  Imports growth was also slower than expected, coming in at +0.3% YoY (Bloomberg consensus +1.1% YoY; July: +2.3%). The weakness in import growth tends to indicate weak domestic demand.  The growth of imports from the U.S. slowed to -7.5% YoY in August from -4.3% YoY in July. Import volume growth for crude oil was negative at -9.4% YoY in August, little changed from -9.5% in July but import volume of coal bounced to a growth of 5.0% YoY in August from -22.1% in July. Import volume of iron ore declined to -1.3% YoY in August from a growth 3.1% in July.  The import volume of copper, however, increased to +26.4% YoY in August from 9.3% in July.     Australia’s economy grew stronger than expected YoY vindicating more rapid hikes are coming Australia’s A$2.2 trillion economy grew at 0.9% q/q in the second quarter (beating Bloomberg estimates), while growing 3.6% y/y also beating the 3.4% expected. Australia’s economic firepower came from record high commodity exports, with exports now accounting for 1% of GPD YoY. The data also showed the economy strengthened by a boost in retail sales with department store sales at record pace. Services and economic earnings were also able to offset the pull back in savings rates, which fell for the third straight quarter to 8.7%, as households are having to dive into their bank accounts to pay record high energy prices. AUDUSD vulnerable of another pull back The USD against the Aussie popped to its highest level since June 2020, after a Wall Street Journal article suggested Fed Chair Powell is committed to reducing inflation with a 0.75% hike likely in September. What also supports this is that stronger than expected US economic data continues to come through (with the most recent data showing the US services sector is healthy), validating the Fed has room to rise rates. Basically, the market is thinking the Fed has room to be more aggressive, while the RBA’s hikes are more subdued. Bottom line, you can’t fight the Fed. The technical indicators suggest the AUDUSD could also retest its lows, while the USDAUD could touch its April 2020 high. Australia assures its Asian customers it will remain a reliable LNG supplier; but it won’t guarantee anything Australia’s Minister for resources has again been called on to ‘pull the trigger’ and limit gas exports given the projections show Australia will have an energy shortage next year. The Minster said although it has the matter under control, it cannot guarantee it won’t be limiting exports. Japan imported A$17 billion of the fossil fuel from Australia last year. As such Japan says it’s watching the situation closely. Bank of Canada raised rates As expected, Bank of Canada hiked rates by 75bps bringing the rate to 3.25% into restrictive territory, given the central bank’s estimate of neutral rate is 2-3%. The tone remained hawkish, but lacked clear guidance as it reiterated that further hikes will be necessary to bring inflation to target, implying the BoC is not done yet and will move even further into restrictive territory. While growth is slowing and housing prices are down 18% since February, but short-term inflation expectations remain high, signalling a risk that elevated inflation becomes entrenched. NIO earnings Chinese EV maker NIO (NIO:xnys/09866:xhkg) reported better-than-expected revenue of RMB 9.57 billion due to pent-up demand. The company delivered 25,059 vehicles in Q2, a 14.4% growth from last year. Gross margins, however, decreased to 16.7% from 18.1% in Q1 this year and 20.3% in Q2 last year. Management’s guidance for Q3 delivery was 31,000 to 33,000 vehicles, below analyst expectations.  ECB rate hike in focus; what could it mean for EURUSD? The European Central Bank meeting will be in focus after plenty of chatter around front-loading rate hikes in the last few days. Most members have come out in support of a 75 basis point rate hike for the September, and the market pricing suggests 125 basis points between September and October meetings (so one 75bps and one 50bps). Only Philip Lane seemed to strike a different tone, saying that he would prefer step-by-step hikes to make sure the financial markets have time to absorb the tightening in a measured manner. August inflation for the Euro area, reported last week, also suggested further price pressures with a 9.1% YoY print from 8.9% YoY previously. Market pricing suggests a 67bps rate hike today, and a cumulative hike of 129bps by October or 157bps by year-end. With a 75bps rate hike not fully priced in for September, such a move along with commitment to do more front-loading could be positive for EURUSD in a knee-jerk. Still, with energy crisis in focus and EU emergency meeting scheduled for tomorrow, it may remain hard for EURUSD to stay above parity. Only a 100bps rate hike will really count as a hawkish surprise. If ECB decides to go for 50bps, we could see EURUSD test the cycle lows. New dockers strike in the United Kingdom (UK) The UK has been facing recurring transport disruptions over the past few years. This is related to Brexit, Covid and now higher cost of living. A dockers strike at Felixstowe port (the country’s first container port) ended a few days ago. But a new one is looming at the port of Liverpool. The dockers trade union is calling for a strike from 19 September to 3 October (at least) after negotiations to raise salary failed. This matters a lot. The port of Liverpool is a key hub for transatlantic sea transport. If inflation continues to rise (which is likely), expect much more strikes to come and not only in the transport industry. Social tensions will probably increase sharply in the coming months.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – September 8, 2022 | Saxo Group (home.saxo)

Summary:  U.S. Treasury yields rose 6-7bps after the ECB hiked 75bps and Fed Chari Powell’s speech. U.S. equity markets were quiet and managed to finish the session moderately higher. Reserve Bank of Australia Governor Lowe said interest rates were not on a “pre-set path” as the economic outlook was uncertain. Crude oil bounced by 1%. In Japan, a meeting between the MOF, BoJ, and FSA sent signals that FX intervention remains on the cards. The European Union is holding an emergency meeting to discuss measures to tackle the energy crisis in Europe and China is scheduled to release CPI and PPI today. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. stock markets closed higher in a choppy session, S&P 500 +0.7%, Nasdaq 100 +0.5%.  Trading was quiet after the well-anticipated ECB 75bp hike and Powell’s now consistent hawkish script.  The 6-7bp rise in bond yield did not move stocks.  VIX edged down further to 23.6. On the corporate front, T-Mobile (TMUS:xnas) announced a buyback program authorization for 7.5% of the company’s market cap and expected to complete the buyback by Sep 2023. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Following a 75bp hike by the ECB and Fed Chair Powell sticking to his hawkish stance in a speech yesterday, U.S. treasury yield jumped 6 to 7 bps across the curve.  Money market rates are pricing in a 85% chance of a 75bp hike on September 22.  Chicago Fed President Evans said the Fed “could very well do 75 in September” but his mind “is not made up” yet. The Treasury Department announced the size of next week’s 3/10/30-year auction at a total size of USD91 billon.  Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index underperformed its major Asian peers which advanced more than 1% across the board to continue its multi-session decline since the beginning of September and finished the day 1% lower.  The weakness in Tencent (00700.xhkg), -3.1%, Chinese developers, and energy stocks dragged down the benchmark index in Hong Kong.  According to filings to the stock exchange, about USD7.6 billion worth, or 2% of the market cap, of Tencent shares have been transferred to CCASS, the Stock Exchange of Hong Kong’s clearing and settlement system.  Prosus, Tencent’s largest shareholder holding 27.99% of shares outstanding, confirmed that it has transferred 192 million shares of Tencent to CCASS and is selling Tencent shares.  In June, Prosus (PRX:xams) announced that the company was going to offload its stake in Tencent to raise cash to buy back its own shares and Naspers’ (NPN:xjse) shares (Prosus’ parent) at a discount to NAV. The Chinese developer space was once again under selling pressure.  CIFI (00884:xhkg) tumbled 13.6% following credit agency S&P downgraded the long-term rating of the company’s senior unsecured debts by 1 notch to BB- from BB. Country Garden (02007:xhkg) plunged by 6.8%.  Energy stocks declined on sharp fall in crude oil price, CNOOC (00883:xhkg) -3.6%, PetroChina (00857:xhkg) -1.9%.  The Chinese automaker space was sold, Great Wall Motor (02333:xhkg) -4.7%, Geely (00175:xhkg) -3.1%, BYD (01211:xhkg) -3.0%, Li Auto (02015:xhkg) -3.0%, XPeng (09868:xhkg) -2.6%. After the Hong Kong market close, Bilibili (09626:xhkg/BILI:xnas) reported a larger than expected loss in 2Q2022 on the deterioration of gross and operating margins.  The company’s ADR plunged 15%.     USDJPY paid little heed to Japan’s three-party meeting USDJPY stuck close to 144-levels on Thursday despite stronger signs of concern from the Japanese authorities. The meeting between Japan’s MOF, central bank and FSA ended with some strong verbal signals that direct intervention remains on the cards, but even if that was to happen, it will only increase the volatility in the yen and cannot possibly reverse the move as long as the monetary policies of the US and Japan continue to diverge. EURUSD gained some bids in early Asian morning to rise to 1.002, but the move remains fragile especially with the emergency meeting scheduled for today. GBPUSD reversed the overnight weakness to rise to 1.1540 with dollar losing some momentum in early Asian trading hours.  Crude oil prices (CLU2 & LCOV2)  A slight recovery was seen in crude oil prices overnight despite the hawkish Fed rhetoric and a further surge in the dollar. Supply side dynamics remained in focus, with the EIA saying that crude inventories rose by 8.85 million barrels last week, while supplies dropped in the largest storage hub of Cushing. Gasoline inventories also gained, but there was no change to oil production. Putin warned that Russia will not supply energy to any nation that backs a US-led price cap on its crude oil sales. However, with WTI futures now priced at ~$83/barrel and Brent futures below $90, eyes are again on OPEC+ which hinted earlier this week the intention was to keep crude oil prices around the $100-mark. Demand concerns have picked up since the OPEC meeting due to widening China lockdowns and more aggressive central bank rate hikes.   Copper (HGc1) Copper is showing signs of stabilizing despite demand concerns from China as Covid restrictions continue to be tightened. Copper rose above $3.50 per pound overnight, as supply concerns remain top-of-mind with mining companies continued to struggle to meet their production targets with top producer Chile has seen its exports slump to a 19-month low due to water restrictions and lower ore quality - while demand from China, surprisingly is showing signs of strengthening as infrastructure push ramps up. Having found support last week at $3.36/lb, after retracing 61.8% retracement of the July to August rally, copper is currently staring at resistance in the $3.54 area where recent lows and the 55-day moving average merges. For a real upside and trend reversal to occur the price needs to break above $3.78/lb while a break below $3.36/lb could see the metal take aim at $3/lb.  What to consider? The Queen of England has passed away and Charles has taken the throne  It’s the end of an era for the UK with the passing of Queen Elizabeth, age 96. Some of the Queen’s key moments since reigning from the 1980s to today include: in 1986 Elizabeth became the first monarch to visit China. It was an important piece of Britain’s diplomatic effort as it prepared to return Hong Kong to Chinese control. In 2011, The Queen became the first British monarch to set food in Ireland in 100 years, with the trip being widely praised as a historic moment of reconciliation. In 2012 the Queen celebrated 60 years on the throne and in 2022 Elizabeth became the first and only British monarch to reach 70 years on the throne. Politicians from the Commonwealth and across the world paid tribute to the Queen. UK Parliament will pay tribute to Queen Elizabeth on Friday and Saturday. Australian Parliament will not sit next week.   ECB’s 75bps rate hike As was generally expected, the European Central Bank went ahead with a 75bps rate hike on Thursday, taking the deposit rate to 0.75%. President Lagarde said risks to inflation are on the upside and growth are on the downside, but did not rule out further tightening. The ECB raised projections for inflation (5.5% in 2023 now vs 3.5% earlier), lowered growth for 2023 (0.9% vs 2.1%), and 2024 (1.9% vs 2.1%) while raising growth for 2022 by a notch. Lagarde said that 75 bps was not the norm, but “moves will not necessarily get smaller” as policy was dependent on data and on a meeting by meeting basis, echoing Lane’s comments from last week. ECB’s Lane was however noted to be more hawkish yesterday than what his previous comments suggested. This keeps the door for another 75bps rate hike still open.  Fed Chair Powell stays in the chorus Fed Chair Jerome Powell stuck to the tune that the Federal Reserve members have been singing, suggesting a 75bps rate hike at the September meeting as inflation reins. He noted that the labor market is “very, very strong” and wages are elevated, while also signaling that growth will likely fall below trend. On inflation expectations, a key concern for Fed officials, the Fed chair said that today they are well anchored over the long-term, but the clock is ticking and the Fed has more concerns that the public will incorporate higher inflation expectations in the short-term. Fed’s Evans also hinted at a 75bps rate hike for September. With the chorus on inflation getting louder and market pricing for September being very close to a 75bps rate hike, a softer headline inflation print next week likely has the potential to usher in a relief rally. If, however, inflation remains high, we could see another leg down in equities.   Australia’s trade surplus halves as coal and iron ore exports fall from record highs. What next? Australia’s trade surplus almost halved in July, plunging from A$17.1b to an A$8.7b surplus, when the market expected the surplus balance to fall to just A$14.5b. It comes as exports of coal and iron ore fell from their record highs, dragging down total exports by 10%. Coal export earnings fell 17% with the northern hemisphere in peak summer, while iron ore export earnings fell 15% tarnished by China’s slowdown. Australian imports (covering outbound tourists) rose 5% with Aussies escaping the record cold winter to enjoy the European sun. The market responded to the drop in exports, with the Coal futures price falling to a 3-day low, losing 1.7%, taking the two-day loss to 7%, which pulls the price away from its record. For investors it’s a timely reminder, energy commodity prices are seasonally impacted, and could remain volatile before picking up later this year when we think peak buying is expected. Australian bonds and equities price in the RBA will be less aggressive, so it’s risk-on again RBA Governor Phillip Lowe sees a slower pace of rate hikes while conceding a sharp slowdown in global growth will make it hard to avoid a soft landing. The AUDUSD lost 0.4% after his remarks. While short-term rates as measured by the 3-year Australian bond yield fell 0.17% - supporting the risk assets rally. As such, the Australian Technology Sector surged to its highest level in a week. But sophisticated Australian investors seem skeptical that the RBA will slow the pace of hikes. Australian interest rate futures suggest rates could peak at 3.6% by mid-next year. We think the market would also be especially rate rises will slow as Australia’s Resources Minster was tapped for the second time to restrict Australian energy exports, as the nation is tipped to run out of energy in 2023. EU proposes five measures to curb gas demand and prices Ahead of Friday’s emergency energy meeting, European Commission President Ursula von der Leyen proposed five radical steps to curb costs and demand: 1) Smart savings of electricity by mandatory targets to reduce peak hour demand for electricity; 2) Cap on revenues of companies producing electricity with from low-cost sources such as wind and solar with profits being re-channeled to vulnerable people and companies; 3) Solidarity contribution from fossil fuel companies; 4) Liquidity support for energy utility companies in order for them to cope with elevated market volatility; 5) Cap on Russian gas revenues on the remaining 9% Russia supplies to Europe, down from a pre-war level around 40%. China’s PPI is expected to have risen as CPI remained stable in August PPI is expected to fall sharply to 3.2% (Bloomberg consensus) in August from 4.2% in July.  Base effect and a decline in coal prices in August could be factors contributing to the deceleration in producer price inflation.  CPI, however, is expected to edge up to 2.8% in August from 2.7% in July.  Analysts suggest that favourable base effect was offset by vegetable price increases amidst the heatwave. Bilibili reported below expectation earnings on margin compression   Bilibili (09626:xhkg/BILI:xnas) reported a worse than expected adjusted loss per share of RMB4.98 (Bloomberg consensus: loss per share RMB4.37, 2Q2021: loss per share RMB2.23). Revenue came in at RMB4.91 billion, largely in line with analyst estimates. The larger-than-expected loss came from disappointing margins.  Gross margin contracted to 15.3% from 16.4% in 1Q2022 and 22.4% in 2Q2021 due to the weak performance of the mobile game business (segment revenue -15% YoY).  Operating margin deteriorated to -39.4% in 2Q2022 from -33.9% in 1Q2022 and -20.9% in 2Q2021 which are attributable to higher general and administrative expenses +44% YoY) as well as research and development expenses +68% YoY).   The company’s revenue guidance of RMB5.6bn-5.8bn for 3Q was below market expectations.  A lender appointed receivers to siege Evergrande’s Hong Kong headquarters premises The Financial Times said that a lender had appointed receivers to siege the headquarters building of China Evergrande (03333:xhkg, suspended) and looked to force a sale of the premises.  The distressed developer’s Hong Kong headquarter has been pledged to secure a loan from a syndicate of lenders led by China Citic Bank International.  Evergrande has previously been served a winding-up petition and is scheduled to have a hearing on the petition at the High Court on 28 Nov 2022. Separately, the Wall Street Journal reports that a consortium of Chinese state-owned banks and private enterprises agreed to pay USD1.05 billion in a court-arranged auction for Evergrande’s 14.6% in Shengjing Bank, a regional bank based in Shenyang, Liaoning province. For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.     Source: APAC Daily Digest: What is happening in markets and what to consider next – September 9, 2022 | Saxo Group (home.saxo)

The Australian dollar has posted sharp gains today. In the European session, AUD/USD is trading at 0.6837, up 1.27%. China inflation falls unexpectedly China’s economy has been stalling, as global demand has weakened and China rigorously enforces a zero-Covid policy. The slowdown in the Chinese economy has hurt global growth, but the silver lining is that August inflation also dropped, which has taken the edge off global inflation. China is a key driver of external inflation pressures, and the decline will be welcome news in the major economies, where inflation remains enemy number one and has led to a sharp tightening in policy. China released the August inflation earlier today. On an annualized basis, August CPI was up 2.5%, lower than the 2.7% gain in July and below the consensus of 2.8%. The Producer Price Index for August slowed to 2.3%, down from 4.2% and below the estimate of 3.1%. The drop in CPI in the world’s number two economy has raised risk sentiment and sent risk-related currencies like the Aussie sharply higher today. The RBA raised rates by 0.50% earlier this week, bringing the cash rate to 2.35%. RBA Governor Lowe said on Thursday that the RBA would need to raise interest rates at least twice more to contain the “scourge” of inflation. Lowe reiterated that the pace and extent of future rate hikes would be data-dependent, especially inflation and wage growth. After four straight hikes of 0.50%, the RBA may decide to ease up in October with a small hike of 0.25%. Next week’s employment report will be an important factor in the RBA’s rate decision. . AUD/USD Technical AUD/USD is testing support at 0.6737. Below, there is support at 0.6661 There is resistance at 0.6737 and 0.6846 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The Australian dollar showed a strong rise of 94 points on Friday. The stop occurred at the target level of 0.6870. The Marlin Oscillator faces double resistance: in front of the upper border of the descending channel (the signal line exited the wedge anyway), and in front of the border with the growth territory - the zero line. Overall the 0.6870 level looks very strong, supported by the oscillator, so a reversal from 0.6870 with the first downside target at 0.6755 is the main scenario. The price is developing above both indicator lines on a four-hour scale, the Marlin Oscillator has turned down and is trying to quickly approach the border with the downtrend territory. We follow the development of events; the movement in any direction should still be confirmed.           Relevance up to 04:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321366

The US dollar has continued its retreat against most of the major currencies today. The Australian dollar has jumped on the bandwagon, climbing about 2% in just two days. AUD/USD is trading at 0.6882 in the North American session, up 0.59% on the day. Australian Dollar (AUD) Driven By Chinese News The Australian dollar skyrocketed on Friday after China’s inflation report indicated that CPI dropped in August to 2.5%, down from 2.7% and lower than expected. The decline in inflation in the world’s number two economy will lower global inflation, and this raised risk sentiment on Friday. The Australian dollar, which is very sensitive to developments in China, climbed 1.36%. The Australian currency’s dependence on China is a double-edged sword, as lower growth in China will weigh on the Australian economy and the Australian dollar. In the meantime, AUD/USD has jumped on the bandwagon and hit a 2-week high. Read next: Fed May Hike The Rate By 75bp, Oracle (ORCL) And Adobe (ADBE) To Release Their Earnings Shortly| FXMAG.COM We’ll get a look at Australian and business and consumer confidence indicators on Tuesday. NAB Business Confidence is expected to tick lower to 6, down from 7 prior. However, Business Conditions are forecast to improve to 27, up from 20 prior. The Westpac Consumer Sentiment index has posted nine straight declines, pointing to prolonged consumer pessimism about economic conditions. US inflation next The US releases a critical inflation report on Tuesday. August inflation is the last major release prior to the Fed meeting on September 21st and headline CPI is expected to drop for a second straight month, from 8.5% to 8.1%. Another drop in inflation will likely result in some headlines that inflation has peaked. Still, the Fed is committed to remaining aggressive and the markets have priced in a 75 basis point hike at around 90%. Lower gasoline prices may push headline CPI lower, but core CPI is expected to rise to 6.1%, up from 5.9%. AUD/USD Technical AUD/USD is testing support at 0.6737. Below, there is support at 0.6661 There is resistance at 0.6737 and 0.6846   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie rally continues, business confidence next - MarketPulseMarketPulse

Summary:  An important US CPI release up later today, which could extend the USD weakening move in the short term if we see a soft print, with JPY crosses likely the most sensitive to any jolt the data delivers to US treasury yields. Elsewhere, it is all about market sentiment, which has rushed higher on hopes that Ukrainian battlefield momentum will continue and change the game for the European energy outlook. FX Trading focus: US CPI release and USD picture. AUDNZD in the spotlight. Over the last few days, the US dollar has largely weakened as a function of brightening risk sentiment and hopes that the energy situation might eventually improve for Europe if Ukrainian battlefield successes compound further and prove a gamechanger for the medium term energy outlook for Europe. It’s impossible to predict developments there, but to get a more determined extension higher, we’ll need a steady stream of improvements and something that can bring the prospect of actual deliveries of Russian natural gas through the pipelines. I’m not sure I understand the path in that direction in the near term. That brings us to today’s August US CPI release, which is expected to show headline inflation at -0.1% month-on-month and +8.1% year-on-year, with the more important core “ex Food and Energy” CPI reading expected at +0.3% MoM and +6.1% YoY (vs. +5.9% in July and a cycle peak of ). The core print, especially the month-on-month reading, is far more important than the headline data. Look for a significant reaction on a downside miss even of 0.1%, but the market may get very upset if we get a +0.4% or higher reading. It’s hard to know how the market is positioned for this data point, given that Fed expectations are pinned near the highs of the cycle, while the USD has backed off very sharply and risk sentiment has enjoyed a strong surge. The latter suggests that the surprise side is a hot core inflation reading. Chart: GBPUSDSterling is trading a bit firmer as the currency is the most sensitive to prospects for an improved natural gas delivery outlook, with the markets hopes up on that front due to developments in Ukraine. The UK August payrolls data this morning was stronger than expected and the unemployment dropped to a nearly 50-year low of 3.6% versus expectations for 3.8% expected. And yet, August Jobless Claims posted their first positive reading since early 2021 and are trending very sharply higher. The Bank of England is rapidly seeing expectations repriced for a 75 basis point hike at next Thursday’s meeting, but it’s not fully there yet. Ahead of today’s US CPI release, GBPUSD is trading up close to the first important resistance, the major pivot low in July near 1.1760. The next few sessions should be pivotal for the pair. AUDNZD update as the pair pushes on resistance again. The drumbeat of economic data out of Australia is not particularly encouraging, and the last Australian trade balance saw the surplus shrinking sharply after a string of record levels in recent months. That surplus relative to the new very large external deficits that New Zealand has been running due to its reliance on energy imports is one of the key factors favouring a significant break higher in AUDNZD into a new range above the 1.1250 that has held since 2017 (and on a weekly close basis since 2015, with the highest weekly close since 2013 only slightly above 1.1300). Watching that pair for a change of mentality, as fair price in the very long term perspective looks more like 1.2000+. The Norwegian Regions Survey for August showed the first negative print (-0.16 vs. +0.80 in July) for the expected growth for the next six months since 2009, a fairly remarkable development suggesting that the oil and gas boom has not sufficiently offset concerns for real growth in the country. NOK trades a bit weaker this morning versus the euro and SEK, with NOKSEK only having a bit more than a figure to worth with before suggesting a reversal lower (1.0500 area versus current 1.0620 as of this writing). Table: FX Board of G10 and CNH trend evolution and strength.The USD is leaning lower – does the CPI deliver the coup de grace today? Elsewhere, the weak JPY will be very sensitive to the US treasury market reaction on the back of the CPI, as its weakness is reflection of US treasury yields pinned near the highs for the cycle. Table: FX Board Trend Scoreboard for individual pairs.USDCAD is trying to turn negative – let’s have a look at the US CPI release today and the close on the day before drawing conclusions. EURUSD flipped positive yesterday and needs to remain above 1.0100 after the US data today to keep the focus higher, perhaps to 1.0350 next. Upcoming Economic Calendar Highlights 1000 – US Aug. NFIB Small Business Optimism 1230 – US Aug. CPI 1700 – US 30-year T-bond Auction Source: https://www.home.saxo/content/articles/forex/fx-update-usd-eyes-cpi-europe-eyes-energy-prices-13092022    

The Australian dollar continues to rally and has climbed above the 0.69 level for the first time in September. AUD/USD has gained 150 points since Thursday, as the US dollar continues to lose ground. Australia released key confidence indicators earlier today, and the decent numbers gave the Aussie a slight push higher. NAB Business Confidence climbed to 10 in August, marking a 4-month high. This was up from 7 and above the forecast of 6 points. NAB Business Conditions remained steady at 20, shy of the estimate of 27 points. Westpac Consumer Sentiment for September bounced back with a strong 3.0% gain, crushing the forecast of -0.3% and recovering from the -3.0% read in August. The rebound is somewhat surprising, as it was the first gain since November 2021 and the RBA just raised interest rates. The survey noted that consumer confidence still remains low, at 84.4. Perhaps the drop in gasoline prices gave a jolt to consumer optimism. Next up is the Australian employment report on Thursday. The market consensus stands at 35.0 thousand for August, which would be a huge rebound after the -40.9 thousand reading in July. A strong release will make it easier for the RBA to remain aggressive as it continues to battle inflation. US inflation next It could be a busy day for the markets, with the US releasing August inflation later today. Headline CPI is expected to drop for a second straight month, from 8.5% to 8.1%, driven by lower gas prices. Core CPI, however, is expected to rise to 6.1%, up from 5.9%. If headline CPI does fall, it would mark a second straight decline, and likely lead to some headlines proclaiming that inflation has peaked. However, Fed Chair Powell has said loud and clear that the Fed will pursue its aggressive stance, even if one or two inflation reports show declines. The markets were exuberant after the unexpected drop in July inflation, sending the US dollar sharply lower. Since then, investors appear to have internalized that the Fed is not about the reverse policy, and I don’t expect a repeat performance from the US dollar, even if inflation is lower than expected. AUD/USD Technical AUD/USD has support at 0.6807 and 0.6737 There is weak resistance at 0.6915, followed by resistance at 0.6985 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar extends gains on solid data - MarketPulseMarketPulse

The Australian dollar's fall from yesterday amounted to 2.27% (157 points). This happened amid a powerful flight from risk - the US stock index Nasdaq lost 5.16%. This morning, data came out on the deterioration of New Zealand's balance of payments for the 2nd quarter (-27.82 billion dollars y/y against -23.27 billion y/y in the previous period). On the other hand, a slight increase in inflation indices in the UK is expected today, and in the euro area, a drop in July industrial production by 1.0%. From the outside, the Australian currency still has no support. The price went under the target level of 0.6755 on the daily chart, ahead of it is the target level of 0.6685, and below it is 0.6640. The signal line of the Marlin Oscillator has unfolded from the upper boundary of the falling channel, ahead of it there is enough distance to the lower boundary of the channel for the price to fall by another one and a half figures. The price settled under the target level of 0.6755 on the four-hour chart. The decline occurs under both indicator lines. We are waiting for the development of a downward movement towards the designated goals. Relevance up to 04:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321620

Markets collapsed on Tuesday after the release of consumer inflation data in the US. The report has indicated that inflation increased by 0.1% m/m and 8.3% y/y in August, instead of a decline that economists have been expecting. Of course, traders reacted negatively to the news, primarily because it is likely that the Fed will continue raising rates aggressively in order to curb high inflation. But if the figure declines, albeit gradually, the Fed may consider not a 0.75% rate hike, but a 0.50%. That would return risk appetite and lead to a decrease in both Treasury yields and dollar. So, positive market sentiment will return, perhaps starting today as an upward movement is seen in European and US stock indices. A rebound is also brewing in the forex market, prompted by the slight weakening of dollar. That being said, attention should be paid to the data on manufacturing inflation in the US as a slowdown will increase positive market sentiment. Forecasts for today: AUD/USD The pair is trading below 0.6725. If negative trends continue in the markets, the quote will continue to decline towards 0.6685. EUR/USD The pair is consolidating above 0.9965. Further buying pressure will push it to 1.0100. Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321648

Summary:  The core US August inflation data shocked the market as prices reportedly rose at twice the expected rate in August at the core. This triggered a massive spike back higher in the US dollar, with the market caught on the wrong foot and suddenly forced to entertain the risk of a 100 basis point rate hike from the Fed at next week’s FOMC meeting. Overnight, the Bank of Japan and Japanese Ministry of Finance upped the ante on intervention risks, tempering the rise in USDJPY. FX Trading focus: Core CPI shocker from the US resets the USD. Beware the BoJ. The headline US CPI data came in slightly above expectations, with a year-on-year reading of 8.3% vs. 8.1% expected and a month-on-month reading of +0.1% vs. -0.1% expected, the latter a solid surprise given sharp drops of late in gasoline prices. But the real shock was the core Ex Food and Energy inflation reading of +0.6% month-on-month, twice what was expected. This triggered an enormous slide in risk sentiment as the market rushed to price the risk that the FOMC might hike as much as 100 basis points next week. As of this morning, nearly 85 basis points of tightening are priced in the market for next meeting. The Fed doesn’t like to surprise the market, so if that builds a bit higher rather than receding back closer to 75 basis points on its own accord by early next week, the Fed will need to send out the WSJ’s Timiraos to pen an article guiding for 75 basis points if it wants to avoid shocking the market. There are a number of good reasons that the market was looking for a softer print yesterday, and this one data point is not enough to suggest that inflation will continue at the run-rate suggested by the August CPI data point, but as is readily evident, it had changed the odds on the size of next week’s hike, the guidance in the wake of that hike in terms of the monetary policy statement and the Fed’s own macro-economic projections. To get follow-on USD strength here, the next data points of note are tomorrow’s US August Retail Sales and weekly US initial jobless claims. I lean for the risk of a stronger than expected Retail Sales data point due to the psychological boost of gasoline prices having dropped so precipitously from their June highs and as millions of US consumers saw their student debt loads drastically reduced by the Inflation Reduction Act that was passed mid-month. As for the weekly claims, these seem to be in a new declining trend after rising into the early summer period from record lows (adjusted for population) earlier in the year. The Bank of Japan and Japanese Ministry of Finance, as I discuss below, may make life difficult for FX traders. Chart: AUDUSDInteresting to note that the USD reaction was most violent against some of the traditional risk-correlated currencies like AUD and NZD, with AUDUSD suddenly poking down close to cycle lows this morning, or at least below the lowest daily close of the cycle at one point this morning. To get new lows, we’d likely need to see the weak risk sentiment persisting her and a test of the June market lows, together perhaps with the Fed delivering a 100 basis point hike next week and US 10-year yields moving above the 3.50% cycle high from June (this morning trading at3.43%.) The recent price action cemented the 0.6900+ area pivot high as the key tactical resistance of note. Australia reports employment data tonight. The Bank of Japan carried out a “rate check” in the FX market, which is widely seen as a precursor for actual market intervention. This tamed the USDJPY move higher from sub-142.00 levels to nearly 145, as the gains were pared back below even 143.00 this morning, with the JPY also firmer broadly. Finance Minister Suzuki said nothing could be ruled out in response to the weakening JPY and that if the current trend persisted, stepping into markets is an option. But as past experience has shown, intervention often only creates temporary volatility if the underlying issue is not addressed - in this case, the Bank of Japan's insistence on maintaining very low rates and capping yields out to 10 years. If yields continue to rise globally, Japanese officialdom will have an enormous and likely unwinnable fight on its hands if the Bank of Japan fails to change its policy. In the meantime, history shows that determined intervention can make for very choppy markets, even for other USD pairs as USDJPY volatility spikes back and forth. Table: FX Board of G10 and CNH trend evolution and strength.The USD has leaped back higher – watching for the degree to which the price holds and follows through if the 100 basis point FOMC move scenario next week solidifies amidst a supporting cast of data. Note the marked NOK weakening, a theme discussed yesterday. And note the CHF Strength – an interesting test for the EURCHF pair next week over the SNB meeting, given EU plans to cap energy prices as the pair trades near multi-year lows. Will there be a bit more caution from the SNB than before? Table: FX Board Trend Scoreboard for individual pairs.We noted many pivotal USD pairs yesterday: well the USD provided a pivot and then some yesterday – now about seeing whether the action remains choppy a la USDJPY or reasonably smooth new USD trend can develop. Note USDNOK trading up against a big resistance line, NZDUSD toying with 0.6000 this morning and AUDUSD not far from the cycle lows, while USDCAD has poked near the cycle top. Also, very interesting signs of possible exhaustion of weak GBP sentiment as the currency is rolling higher against a growing cast of the smaller G10 currencies (GBPNOK, GBPNZD, GBPAUD on the cusp, etc.) Upcoming Economic Calendar Highlights 1230 - US Aug. PPI  1230 - Canada Jul. Manufacturing Sales 1430 - ECB's Villeroy to speak 2245 - New Zealand Q2 GDP 2350 - Japan Aug. Trade Balance 0120 - China Rate Announcement 0130 - Australia Aug. Employment Data Source: https://www.home.saxo/content/articles/forex/fx-update-us-august-cpi-triggers-a-landslide-beware-the-boj-14092022  

Jobs figures are back in focus in Australia following some interesting comments from RBA Governor Lowe a few days back. Of course the RBA doesn't care about the employment situation directly. But the theory is that jobs support consumer demand, which in turn supports prices. With the employment situation expected to turn around, particularly going into Australia's spring season, does that mean it's time to start considering a change in RBA policy? The Governor insists that it's not, and that policy will be consistent. The issue is that market expectations seem to not align with the RBA's outlook, pricing in more hikes into next year. In his latest speech, Lowe appeared to be trying to temper expectations. One key point is insisting that Australia did not need to follow the Fed's rate higher, citing the employment situation. What is the employment situation? Australia has relatively low unemployment, which has contributed to upward pressure in wages. However, wages have not kept pace with rising inflation, which means the RBA doesn't have to worry about a wage-price spiral. With housing prices starting to fall, but exports remaining strong, there is a case that the reserve bank might not feel as much urgency to control the market. Healthy appetite for raw materials from China has continued to support the dollar, which in turn puts downward pressure on prices. Given the amount of imports from Australia, this might have a bigger impact on reducing inflation than direct monetary policy. Recently there has been a little weakness in employment, but that was seen as a result of lower participation. Increasing labor force participation would be seen as helping the RBA's objective to bring prices down, as it would help increase production and solve some of the supply side issues. For that reason, the RBA might be wary about going above the neutral rate. Lowe did not give a specific range, just simply said that current policy was "nearer". What to look out for Australia August unemployment rate is expected to stay steady at 3.4%, despite the participation rate expected to tick up a couple of decimals to 66.6% from 66.4% prior. Australian firms have been complaining for months that they have been having trouble enticing workers back. The employment change is projected to turn around, and show 35K jobs created compared to -49.9K in July. These figures are seasonally adjusted to account for Australia coming out of the middle of winter. Chief sector that had been impacted over the last few months was construction as home sales and prices started to fall. Potential market reaction The issue now is whether the RBA will hike another 50bps or just do 25bps at their next meeting at the start of October. So far, there is much consensus, but the market still seems to be betting on a more hawkish option. Better jobs numbers would actually give the RBA more room to maneuver, and could be interpreted by the market as meaning a harsher hike is more likely. On the other hand, if the labor market were to not show the expected rebound, it could shake some of the confidence that policy will be as tight as expected, and weaken the Aussie.

The Australian dollar is licking its wounds today, after a brutal collapse on Tuesday. AUD/USD is trading at 0.6739 in the European session, up 0.12%. US inflation sends USD soaring On Tuesday, I noted that the Australian dollar had edged higher, thanks to decent consumer and business confidence data. That changed in a hurry after the US inflation report, and by the end of the day, AUD/USD had plunged an astounding 2.29%. The Aussie wasn’t alone, as the US dollar posted sharp gains against all the major currencies. In the US, investors were dismayed with the August inflation report, even though headline inflation fell to 8.3%, down from 8.5%, thanks to lower gasoline prices. The reading was well above the consensus of 8.0%, and core CPI rose to 6.3%, up from 5.9% and above the forecast of 6.1%. The markets reacted sharply to the news, as equity markets slumped and the US dollar was off to the races. The market response was a polar opposite to the July inflation report, when market euphoria sent the stock markets flying and the US dollar tumbling. Read next: Markets Look Like Battlefields After The US Inflation Print. S&P 500, Dow Jones And Nasdaq All Plunged. Forex: Will BoJ Intervene?| FXMAG.COM The latest inflation numbers have removed any expectations of a modest 50bp increase at the Fed’s meeting next week and have raised the possibility of a massive 100bp hike. The markets have priced in a 75bp increase at 60% and a 100bp rise at 40%, compared to 80% for 75bp and 20% for 100bp after the inflation report was released. I expect these odds to continue to fluctuate as we get closer to the September 21st meeting. Larry Summers, a former Treasury Secretary, said on Tuesday that the inflation report indicated that the US has a “serious inflation problem” and a 100bp move would “reinforce credibility”. Australian Jobs Market Data To Be Released This Week Market attention will shift to the Australian employment report on Thursday. The market consensus stands at 35.0 thousand for August, which would be a huge rebound after the -40.9 thousand reading in July. A strong release will make it easier for the RBA to remain aggressive as it continues to battle inflation. The RBA will be keeping a close eye on Consumer Inflation Expectations, which will also be released on Thursday. The index is expected to rise to 6.7% in August, up from 5.9% in July. AUD/USD Technical AUD/USD is testing resistance at 0.6737. Above, there is resistance at 0.6807 There is support at 0.6629 and 0.6559 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie stabilizes after freefall - MarketPulseMarketPulse

AUD/USD is in the vicinity of the trough formed in July at 0.6680 which is also the lower band of a descending channel. A break below the latter would clear the way towards 0.6620, then  0.6540/0.6465, economists at Société Générale report. Break above 0.69 needed to see a rebound “The pair has recently failed to reclaim 50-DMA near 0.6900; this hurdle must be crossed for an extended bounce.”  “In case it fails to defend 0.6680, ongoing downtrend could extend towards next projections at 0.6620 and 0.6540/0.6465.”

Summary:  The US dollar remains firm after the shocking CPI data from Tuesday and with US Retail Sales for August today the latest data point ahead of the FOMC meeting next Wednesday, where a sizable minority are looking for 100 basis points from the Fed, while US long yields have run out of range to the upside. The Chinese yuan is trading weakly after China passed on easing rates any further overnight and despite the country moving to ease rules on property investment, with USDCNH hitting 7.00 today. FX Trading focus: USDCNH breaks above 7.00. USD eyes retail sales, new peak in long yields. The reaction in US yields and the US dollar after the far stronger than expected US August core CPI data from Tuesday is holding up well, with US yields all along the curve perched at or near the highs for the cycle and the 10-year US Treasury benchmark yield running out of range into the key high from June at 3.50%. The US Retail Sales report for August out shortly after this article is published is likely to drive the next step for US yields and the US dollar, which will likely move in the same direction. Somewhere out over the horizon, however, I wonder how the US dollar trades in the event a recession is afoot and investors are still marking down equities, not on a the challenge to multiples from higher yields, but on a profits recession. The past “norm” is for equities to only bottom out during the phase in which the Fed is rapidly easing to get ahead of a cratering economy. For now, the bout of risk off has seen NZD and NOK as the interesting pair of weakest currencies, with AUD and CAD not far behind and sterling struggling a bit more today, even as the market edges up the pricing of the Bank of England next week closer to 75 basis points (still only slightly more than 50/50 odds according to futures prices). Sterling almost can’t hope to perform well if risk sentiment But perhaps most importantly, the USD sell-off picked up its pace a bit today on USDCNH breaking above 7.00 for the first time since the summer of 2020 and despite constant PBOC pushbacks via setting the daily fixing stronger for the last three weeks and more on a daily basis. Overnight, China kept its rate unchanged as well, though there were a couple of bright spots in thew news from China overnight, as local authorities have listened to Xi Jinping’s calls for easing up on property investment with a raft of measures. As well, the Chengdu Covid lockdowns are easing. Still, any significant extension above 7.00 in USDCNH will have markets on edge, particularly if the 7.187 all time highs come into view. The USD strength and yield remaining pinned higher have emboldened prevented a further slide in USDJPY after USDJPY traded south of 143.00 overnight. We all know that the BoJ/MoF will more than likely step in if USDJPY trades north of 145.00 again, but note the more profound correction in crosses like AUDJPY, possibly a better place to speculate for a JPY resurgence if risk sentiment remains downbeat. That pair has rejected the recent extension above 97.00, though it probably needs to cut down through 95.00 together with tamer long global yields to suggest something bigger is afoot. Chart: AUDUSDThe Aussie caught a broad, if brief, bid overnight on a strong August jobs report, but wilted again in today’s trade as risk sentiment deflated once again and as the move lower in the CNH versus the US dollar picked up a bit of extra steam and crossed the psychologically important 7.00 level. Watching the lows for the cycle here below 0.6700 for a possible extension to at least 0.6500 on a break lower and a retest of the cycle lows from June. Table: FX Board of G10 and CNH trend evolution and strength.Interesting to note the CHF topping the leaderboard as EURCHF tries at the cycle lows today and Europe can’t get on the same page on its attempts to cap energy prices (drives risk of higher CPI outcomes and more CHF strength to offset). Elsewhere, the NZD is the weakest of the lot, while Japanese officialdom has impressed with its latest verbal intervention, as can be seen in the tremendous momentum shift over the last week in the broader JPY picture. Table: FX Board Trend Scoreboard for individual pairs.AUDNZD remains in a positive trend, but it’s at a multi-year range top as we watch whether a proper trend develops. Elsewhere, NZDUSD is grinding down into the psychologically challenging sub-0.6000 levels, while USDCAD is banging on the cycle resistance at 1.3200 and USDNOK is poking at local highs and only a bit more than a percent from its highest close since the pandemic panic of early 2020 around 10.25. Wondering if today will prove a pivot day for EURGBP that confirmed the up-trend. Upcoming Economic Calendar Highlights 1230 – US Weekly Initial Jobless Claims 1230 – US Sep. Empire Manufacturing 1230 – US Aug. Retail Sales Source: https://www.home.saxo/content/articles/forex/fx-update-usdcnh-breaks-above-700-usd-eyes-retail-sales-15092022

The Australian dollar is showing little movement today after the solid Australian employment report. Australian employment rebounds The Australian labour market remains resilient, as indicated by a solid August employment report. The increase in employment of 33.5 thousand was very close to the consensus of 35 thousand, with the gain of 58.8 thousand full-time jobs especially impressive. The release was within expectations and the Australian dollar’s response has been muted. The unemployment rate ticked higher to 3.5%, up from 3.4%. The employment data likely will not change things for the RBA, which meets on October 6th. The RBA has delivered 50bp rate hikes four straight times, but may be looking to ease its tightening and guide the economy to a soft landing. If the RBA needs an excuse to hike by 25bp, it could hang its hat on the slight rise in the unemployment rate. Australia’s Inflation Expectations slowed to 5.4% in August, marking a third consecutive decline. This is a dose of good news for the RBA, which wants to ensure that inflation expectations do not become unanchored in an environment of red-hot inflation. Read next: Crude Oil Price Has To Struggle Through A Way Full Of Obstacles| FXMAG.COM In the US, the August inflation report resulted in plenty of volatility, as stock markets fell sharply before recovering. The US dollar rose sharply after inflation came in at 8.3%, higher than the forecast of 8.1%. The markets have been forced to recalibrate after assuming that inflation had peaked and the Fed would make a U-turn on policy. The Fed has been consistent in its hawkish message, and it seems that the markets are finally listening. The FOMC is expected to raise rates by 75bp, with market pricing showing plenty of fluctuation. Currently, there is a 74% likelihood of a 75bp increase, with a 26% of a massive 100pt hike. Gone is the anticipation of a “modest” 50bp rise, as the Fed is expected to continue to stay aggressive until inflation shows unmistakable signs that it has peaked and is moving lower. The Fed is saying that inflation will be brought down to the 2% target in 2023, but it looks like the road to low inflation will have bumps along the way, as the battle with inflation has been difficult and that is likely to continue to be the case. AUD/USD Technical AUD/USD has weak support at 0.6737, followed by support at 0.6629 There is resistance at 0.6807 and 0.6915   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar yawns after jobs report - MarketPulseMarketPulse

The aussie resolutely headed towards the 0.6686 target support (March 2020 high) on Thursday, this level was reached this morning. The Marlin Oscillator is decreasing in its own descending channel on a daily scale, we are waiting for the signal line to work out its lower border. At a low, this can happen when the price reaches the next support at 0.6640 (if the price develops a sideways movement), the target level of 0.6565 looks like the best option. The price turned down on the H4 chart yesterday after touching the MACD indicator line. This is a fairly common sign of the upcoming medium-term movement. The Marlin Oscillator, after a narrow consolidation, is ready to develop a new branch of decline. The downward scenario will be confirmed if the price breaks the level of 0.6686.   Relevance up to 04:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321861

China's President Xi Jinping delivered a speech at Shanghai Cooperation Organisation (SCO) summit in Uzbekistan on Friday. Key quotes   Will prevent foreign forces from instigating 'colour revolution'. Welcome all countries to sign up to china's global security initiative. China will train 2,000 law enforcement personnel over the next five years for sco member countries. Will step up cooperation on Belt and Road initiative. Will provide 1.5 bln yuan worth of humanitarian aid to developing countries. Urges countries to stop zero sum game and bloc politics. China's economy remains resilient, full of potential.   Related reads PBOC: Will aim to stabilize employment, prices AUD/USD breaks below 0.6700, hits the lowest level since June 2020 amid stronger USD

Summary:  The US dollar continues to drive higher together with the pricing for the Fed’s terminal policy rate reaching new highs near 4.50%. The JPY managed to hold the line and then some against a surging greenback as the market seems unwilling to challenge the Bank of Japan for now despite the higher US yields. Elsewhere, the descent in sterling is verging on scary, with GBPUSD staking out new record lows since 1985 below 1.1400 as EURGBP broke the range highs. FX Trading focus: Sterling descent getting scary after weak UK Retail Sales. USDJPY stays tame even with stronger USD and higher US treasury yields. The USD arched to new highs this morning versus a majority of G10 currencies, with USDJPY the notable pair not participating in the move as the market seems unwilling to challenge the Bank of Japan for now. One of the proximate triggers for a shift lower in risk sentiment late yesterday was the weak result and guidance from FedEx after US trading hours. As well, US short treasury yields continue to rise and provide plenty of pressure on markets. As for USDJPY, arguably longer yields are a more important coincident indicator, and US long yields have not yet broken to new cycle highs (3.50% for the US 10-year Treasury benchmark) although they are pushing hard on that level. The short end of the US yield curve, continues to rise apace even as the predictions for next week’s meeting pulled back slightly, meaning that the “terminal rate” for the cycle is getting priced higher – and has nearly hit 4.50%, more than a hundred basis points above where it was in early August. Data from the US yesterday was mixed. The headline US August Retail Sales report was slightly stronger than expected at +0.3% MoM vs. -0.1% expected, but July was revised down to -0.4% from 0.0%. The core Retail Sales data was slightly weaker than expected at +0.3% ex Autos and Gas, likewise with a negative revision (down to +0.3% for July after +0.7% was reported). Important to note that the US reports Retail Sales in nominal dollar changes, so this report suggests stagnating volumes. The latest weekly jobless claims data point yesterday was the lowest since late May, extending the recent falling trend. The UK August Retail Sales data this morning, on the other hand, was distinctly weak and set off an extension lower in sterling, as EURGBP broke above 0.8722 for the first time since early 2021 UK reports Retail Sales in volumes, not in nominal prices, and the month-on-month data developments were extremely weak, pointing to a steep real growth slowdown. Sales including petrol fell -1.6% MoM in August and -1.5% ex petrol. The August Ex Petrol volumes dip takes the data below the 2019 level in August, the first time that has happened in this calendar year. Waiting for the close of trade today for next steps as we have quarterly “witching” of massive derivatives exposures in the US today and with it, possibly erratic trading. Very interesting to see the combination of USDJPY unwillingness to move today together with USDCNH on the rise (so CNHJPY dropping), while EURUSD is also a bit stuck and backing up after trying lower in the European morning today. Some USD exhaustion creeping in at least within the G3? And if risk sentiment continues to deteriorate, will it remain always a function of the rising Fed expectations, or can it jump horses to concerns for the economic cycle? In other words, the eventual chief question may be: what happens to the USD if bond and stocks diverge in direction? Chart: GBPUSDGBPUSD declines took on extra energy this morning in the wake of the weak August UK Retail Sales data that showed a sharp contraction in volumes in August, a sign of real GDP contraction. This took EURGBP to new highs since early 2021 (pointing that out as an indication of isolate GBPS weakness), while GBPUSD drove down to record lows since the mid-1980’s. Not sure what can bring relief for sterling here save for a halt to the relentless rise in US yields and/or thawing risk sentiment after the steep plunge this week. As for next level, only round, psychological ones seem relevant as the 1985 lows near 1.0500 are impossible to compare in real effective terms after 37 years. Bulls will have to hope that sentiment shifts here and for a quick rejection of the new lows to confirm a divergent momentum scenario (stochastic indicator turning back higher after new price lows posted with indicator not at new lows). EURCHF hit new cycle lows yesterday below 0.9550, but these were rapidly rejected. Without any catalyst I could identify, this looks like possible intervention – perhaps as energy prices have calmed, meaning that the SNB wants to lean a bit the other way now? Very curious to hear the SNB next Thursday. Table: FX Board of G10 and CNH trend evolution and strength.The stronger euro beginning to stick out, as does the JPY resilience, as the smaller currencies and sterling have traded weakest. Gold hit the skids on breaking below the big range level around 1,680. CNH is on the weak side, which is interesting, given the strong US dollar, but let’s watch 7.20 in USDCNH to see if there is any real fireworks potential. Table: FX Board Trend Scoreboard for individual pairs.JPY has strengthened enough to have a go at flipping stronger versus NOP and NZD today. More interested in whether the CNHJPY rate flips negative next week. Upcoming Economic Calendar Highlights 1200 – Poland Aug. Core CPI 1215 – Canada Aug. Housing Starts 1400 – US Sep. Preliminary University of Michigan Sentiment Source: https://www.home.saxo/content/articles/forex/fx-update-sterling-descent-takes-gbpusd-to-historic-low-16092022

The Australian dollar has started the week with considerable losses. In the North American session, AUD/USD is trading at 0.6694, down 0.40%. Will minutes shed light on RBA’s plans? It’s a light calendar this week for Australian releases. One of the highlights is the Reserve Bank of Australia’s minutes of the September meeting, which will be released on Tuesday. At the meeting, the RBA hiked rates by 0.50% for a fourth straight time, bringing the cash rate to 2.35%. RBA Governor Lowe has made it quite clear that additional rate hikes are coming, and last week he told a parliamentary committee that the 2.35% rate “is still too low”. At the same time, Lowe has signalled that he plans to slow the pace of tightening.  Lowe could decide to lower rates to 0.25% as soon as the October 6th meeting, but that is by no means certain, given that inflation rose to 6.1% in the second quarter, up from 5.1% in Q1. Inflation is the RBA’s number one priority, and Lowe may not want to ease up on rates until there are clear signs that inflation has peaked. The RBA is also concerned about inflation expectations, and there was good news last week as inflation expectations slowed to 5.4% in August, which was a third successive decline. This week sees several major banks holding rate meetings, highlighted by the Federal Reserve meeting on September 21st. The Fed has relied on a strong labour market to continue tightening at a steep pace as it grapples with high inflation. In August, inflation dipped for a second straight month, but the 8.3% reading was higher than the consensus. Inflation is proving to be more persistent than expected, which means that the Fed will have to remain more hawkish than the markets had anticipated. This sentiment has sent the US dollar higher. The markets have priced in a 0.75% hike at the upcoming meeting, with an outside chance of a massive 1.00% increase. With the Fed remaining in hawkish mode, the short-term outlook for the US dollar appears bright. AUD/USD Technical AUD/USD has support at 0.6623 and 0.6523 There is resistance at 0.6769 and 0.6869 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar falls, RBA minutes loom - MarketPulseMarketPulse

Yesterday the Australian dollar worked out the support of 0.6686 with the lower shadow of the daily candle, but the general market's stability in the process of waiting for the Federal Reserve's decision on monetary policy on Wednesday kept the price in the accumulation range of 1.6686-0.6755. At the moment, the price is decreasing, as the market generally expects an increase in the rate by 0.75%. After the support at 0.6686 is overcome, the 0.6640 target will open, the 0.6565 target level is even lower. The Marlin Oscillator is going down in its own descending channel. On the H4 chart, the price reflects down from the MACD line for the second time. This time the reversal is supported by the reversal of the Marlin Oscillator from the zero line. The downward movement is gaining momentum. Relevance up to 04:00 2022-09-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322090

China's Foreign Minister Wang Yi urges to deal with the Taiwan issue properly, Reuters reported on Tuesday. Last week, Wang said that Japan must not 'obscure' its stance on the Taiwan issue. The tension between US and China over Taiwan escalated this week after American President Joe Biden that the “US military would defend Taiwan in the event of an invasion by China.” Market reaction The aussie remains undermined by the renewed US dollar buying and looming US-China woes. The spot is currently trading at 0.6719, down 0.10% on the day.

Here is what you need to know on Tuesday, September 20: Major currency pair trade in familiar ranges on Tuesday as investors move to the sidelines ahead of key central bank policy decisions. The US Dollar Index (DXY), which closed virtually unchanged on Monday, moves sideways slightly above 109.50 and the market mood improves modestly with US stock index futures rising between 0.2% and 0.3%. Later in the day, Building Permits and Housing Starts data for August will be featured in the US economic docket. Consumer Price Index (CPI) figures from Canada will also be watched closely by market participants. Wall Street Journal author Nick Timiraos, who correctly leaked the 75 basis points (bps) rate hike in July, published an article late Monday and refrained from suggesting that the Fed could raise its policy rate by 100 bps on Wednesday. The greenback lost some interest after this development and the DXY erased its daily gains. The benchmark 10-year US Treasury bond yield stays relatively quiet near 3.5% on Tuesday. Federal Reserve Preview: Forecasting 5% interest rates? Dollar to move on dot-plot, Powell's pledges. Earlier in the day, Sweden's central bank, Riksbank, announced that it raised its policy rate by 100 bps to 1.75%, compared to Reuters' estimate for a rate increase of 75 bps. With the initial reaction, EUR/SEK fell to a fresh daily low of 10.7305 but managed to recover to the 10.8000 area. During the Asian trading hours, the Reserve Bank of Australia's (RBA) September monetary policy meeting minutes showed that policymakers saw a case for a slower pace of rate increases as becoming stronger. AUD/USD's reaction to the RBA's publication was largely muted and the pair was last seen trading flat on the day at around 0.6730. Annual CPI in Canada is expected to decline to 7.4% in August from 7.6% in July. Ahead of this data, the USD/CAD pair trades in a tight range near the mid-1.3200s. EUR/USD managed to stage a rebound in the second half of the day on Monday and closed in positive territory above parity. The pair was last seen posting small daily gains near 1.0030. GBP/USD clings to modest daily gains at around 1.1450 early Tuesday. “There aren’t currently any negotiations taking place with the US and I don’t have any expectation that those are going to start in the short to medium term," British Prime Minister Liz Truss said regarding a potential trade deal with the US but these comments were largely ignored by market participants. The data from Japan revealed on Tuesday that the National CPI climbed to 3% in August from 2.6% in July. Although this print came in stronger than the market expectation of 2.6%, USD/JPY managed to hold its ground and was last seen rising 0.2% on the day at 143.50. Gold is having a tough time attracting buyers and trading in negative territory slightly above $1,670. The resilience of the 10-year US T-bond yield makes it difficult for XAU/USD to gather recovery momentum. Bitcoin shook off the bearish pressure late Monday but it's yet to reclaim $20,000. Ethereum gained nearly 3% on Monday but failed to preserve its bullish momentum early Tuesday. At the time of press, ETH/USD was down 1% on the day at $1,360.

The Australian dollar is in negative territory today. AUD/USD is trading at 0.6706, down 0.30% on the day. RBA says rates to increase The RBA minutes of the September 6th meeting didn’t shed any new light on the central bank’s rate policy, and the Australian dollar’s response has been muted. The minutes reiterated the message that the markets have already heard from Governor Lowe – additional rate hikes are coming, but the size of the hikes will depend on inflation and growth. The minutes noted that rates are approaching “normal settings”. At the meeting, members argued over whether to raise rates by 25bp or 50bp – in the end, the Bank went for the latter option, bringing the cash rate to 2.35%. With no inflation or employment data prior to the October meeting, the RBA may still be up in the air with regard to the size of the rate hike right up to decision time. This will make for an interesting meeting which could trigger volatility from the Australian dollar. There are arguments to be made on both sides. Inflation rose to 6.1% in the second quarter, and as the RBA’s number one priority, Lowe may want to keep the pedal on the floor until there are clear signs that inflation is moving lower. On the other hand, inflation expectations have slowed over three straight months, a possible indication that inflation may have peaked or will do so shortly. Lowe would very much like to guide the economy to a soft landing, which would be facilitated by a modest 0.25% hike. The Federal Reserve meets on Wednesday, with the markets expecting a 0.75% hike. There is about a 20% chance of a massive full-point hike. The markets will be listening carefully to the Fed’s guidance – if it is hawkish, the US dollar should respond with broad gains. AUD/USD Technical AUD/USD has support at 0.6623 and 0.6523 There is resistance at 0.6769 and 0.6869 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. AUD/USD dips after RBA minutes - MarketPulseMarketPulse

Canada CPI Overview Statistics Canada will release the latest consumer inflation figures for August later during the early North American session on Wednesday, at 12:30 GMT. The headline CPI is expected to decline by 0.1% MoM as compared to a modest 0.1% rise reported in July. Furthermore, the yearly rate is anticipated to decelerate from 7.6% to 7.3% in August. More importantly, the Bank of Canada's Core CPI, which excludes volatile food and energy prices, is estimated to rise by 0.3% MoM in August and come in at 6% on a yearly basis, down from 6.1% in July. Analysts at RBC Economics offer a brief preview of the report and explain: “We look for a dip from 7.6% in July to 7.2% in August – down from a recent peak of 8.1% in June. But beneath the weakening headline number, some prices are still powering up. Food price growth likely accelerated again. And we look for the rate excluding food and energy products to hold steady at 5.5%. Alongside this, the Bank of Canada’s preferred core inflation measures also likely remained elevated. We continue to believe the headline inflation rate has hit its peak as lower commodity prices and easing global supply chain pressures lower growth in goods prices. But we don’t expect ‘core’ measures to peak until later this year when higher interest rates start to cut deeply into consumer demand.” How Could it Affect USD/CAD? The Bank of Canada (BoC)focuses more on the core rate. If the reading comes in line with expectations or slightly above, it will fuel speculations the BoC will keep its aggressive stance. This might be enough to provide a modest lift to the Canadian dollar, though subdued action around crude oil prices could cap any meaningful upside. Conversely, a softer print should allow the USD/CAD pair to build on its intraday positive move amid resurgent US dollar demand. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the USD/CAD pair is to the upside. Hence, a subsequent strength back towards testing the highest level since November 2020, around the 1.3345 region touched on Monday, remains a distinct possibility. The momentum could further get extended towards the top boundary of a multi-month-old ascending channel, currently placed just ahead of the 1.3400 round-figure mark. On the flip side, the 1.3220-1.3210 region, coinciding with the overnight swing low, might continue to protect any meaningful pullback ahead of the 1.3200 mark. Any subsequent decline might still be seen as a buying opportunity and find decent support near the 1.3120-1.3115 region. This is closely followed by the 1.3100 mark, below which the USD/CAD pair could accelerate the fall towards the next relevant support near the 1.3055 horizontal zone. Key Notes   •   Canadian CPI Preview: Forecasts from five major banks, core inflation to stay high   •   USD/CAD Forecast: Bullish potential intact, Canadian CPI eyed ahead of FOMC meeting   •   USD/CAD: Levels below 1.30 might remain out of reach for now – Commerzbank About Canadian CPI The Consumer Price Index (CPI) released by Statistics Canada is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of CAD is dragged down by inflation. The Bank of Canada aims at an inflation range (1%-3%). Generally speaking, a high reading is seen as anticipatory of a rate hike and is positive (or bullish) for the CAD.

Summary:  These are remarkable times as the Riksbank manages to surprise the market with a full 100 basis point rate hike and yet EURSEK trades unchanged within half an hour of the decision. This is likely on faltering risk sentiment this morning in Europe as the market mulls the risk that the Powell Fed has come to realize that actions speak far louder than guidance, as we mark up the odds for a 100 basis point hike at tomorrow’s FOMC meeting. FX Trading focus: Fed’s obsession with not surprising may be a thing of past: look for 100 basis points after Riksbank went 100 bps this morning. The Swedish Riksbank surprised today with a 100 basis point hike to take the rate to 1.75%, a move only a minority were looking for. This, in addition to guidance that the Riksbank would look to continue hiking rates, took Swedish yields higher, but didn’t do much for the currency. The reaction there, in fact, was remarkable as EURSEK fell well over a percent on the decision only to trade above the level prevailing immediately before the announcement within five minutes and then rising to new cycle highs since March a bit over half an hour after the decision. As I wrote in this morning’s Quick Take, I suspect SEK weakness (EURSEK top of range, USDSEK near all-time highs of 11.04 from 2001) might have tipped the scales, though the krona was not mentioned explicitly in the Riksbank’s statement today. That takes us to the FOMC meeting tomorrow. I have suggested in recent comments that it is less material whether the Fed moves 75 or 100 basis points at tomorrow’s meeting, provided that the Fed maintains sufficiently strong guidance on the terminal rate by the end of this year and an even higher rate forecast for 2023, but my thinking has evolved this morning and I am already leaning far more in favour of the Fed delivering 100 basis points. One aspect that in the past might have held back the Fed from hiking more than the market has priced (80-85 bps priced in this morning, depending on the measure of expectations) was the seeming Fed obsession with having the rate decision fully priced before the fact as was so patently obvious ahead of the June 16 FOMC meeting, which saw the leak of a WSJ article by noted Fed whisperer Nick Timiraos suggesting a 75 basis point move when the market was priced for only a 50-bp move. Given the stark Jackson Hole speech from Fed Chair Powell and the strong CPI data and other resilient US data, I wonder if this Fed is happy to change behaviour and let a proper surprise rip the market with a 100-bp move tomorrow together with a strong lifting of guidance and a 2024 PCE core forecast lift from its 2.3% level. Even better would be a 112.5 move that does away with the silly quarter-point upper-lower bound of the Fed policy rate and sets the rate to 3.50%.  Already, given that the market’s thinking is shifting in the direction of a 100-bp move tomorrow, the Fed almost has to do so or it will be delivering a dovish surprise with anything less. Fed actions will speak louder than guidance. Chart: USDJPYGet ready for chaos in USDJPY as US 10-year yields are already rising to new cycle highs ahead of the FOMC meeting and the Bank of Japan meeting only hours later in Asia’s Thursday session. The Bank of Japan and Ministry of Finance achieved a modicum of respect with their latest verbal intervention, as fresh highs in long US treasury yields haven’t seen USDJPY challenge the 145.00 level yet, but if the Bank of Japan fails to shift after a more hawkish Fed (our bias), then watch out for significant volatility risk to the upside, followed by a likely intervention fight to follow, as discussed in my colleague Charu’s latest excellent piece.   RBA minutes overnight were nothing to write home about for Australian rates, but AUDNZD jumped higher through the key 1.1250 area resistance, a possibly seismic move we have been out the lookout for since the pair approached that level a few weeks ago. We have argued that a significant resetting higher of the currency pair is possible – possibly toward 1.2000 and higher – given the diverging trajectories of the two countries’ current accounts. Table: FX Board of G10 and CNH trend evolution and strength.The kiwi is getting squashed and the RBNZ may have to change its mind about where the policy cycle may have to go at some level of NZD weakness. Elsewhere, watching the G3 over the FOMC to see if a hawkish surprise can continue to drive USD strength there as well as versus the weaker currencies. If we are set to test new equity bear market lows, SEK may be set for extended weakness and USDSEK may be set for a go at its all time high above 11.00 as EURSEK is also threatening higher. Table: FX Board Trend Scoreboard for individual pairs.AUDNZD has torn above resistance – big development there, even if nominally, there are some shreds of resistance up to 1.1430 before the big space opens up on the chart. Elsewhere, EURSEK trades top of range despite and USDSEK is 2% from all time level of 2001 ahead of FOMC meeting tomorrow. Interesting that USDJPY remains range-locked despite US 10-year yield at new highs this morning – helmets on there as noted above. Upcoming Economic Calendar Highlights 1230 – Canada Aug. Teranet/National Bank Home Price Index 1230 – US Aug. Housing Starts & Building Permits 1230 – Canada Aug. CPI  1700 – ECB President Lagarde to speak Source: https://www.home.saxo/content/articles/forex/fx-update-riksbank-raises-risk-of-100-bp-hike-from-fomc-20092022

AUD/USD remains depressed near 0.6700 mark amid stronger USD, seems vulnerable A combination of factors prompts fresh selling around AUD/USD on Tuesday. Aggressive Fed rate hike bets, elevated US bond yields revive the USD demand. Recession fears also underpin the buck and weigh on the risk-sensitive aussie. The AUD/USD pair attracts fresh selling in the vicinity of mid-0.6700s, or a three-day high touched earlier this Tuesday and continues losing ground through the early North American session. The pair is currently placed near the lower end of its daily trading range, around the 0.6700 mark, and remains well within the striking distance of its lowest level since June 2020. The Australian dollar started weakening following the release of the Reserve Bank of Australia's (RBA) September meeting minutes. The central bank reiterated that policy was not on a pre-set path and noted that interest rates are getting closer to normal levels. The RBA further added that it sees the case for slowing the pace of rate hikes. This, along with resurgent US dollar demand, is exerting downward pressure on the AUD/USD pair. Expectations that the Federal Reserve will stick to its aggressive rate-hiking cycle to curb stubbornly high inflation assist the greenback to rebound swiftly from a one-week low. The US central bank is expected to deliver at least a 75 bps rate hike at the end of a two-day monetary policy meeting on Wednesday. This, in turn, remains supportive of elevated US Treasury bond yields and continues to act as a tailwind for the greenback. Apart from this, a softer risk tone - amid growing recession fears - provides an additional lift to the safe-haven buck and contributes to driving flows away from the risk-sensitive aussie. The USD sticks to its intraday gains and moves little following the release of the mixed US housing market data. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the AUD/USD pair is to the downside. Bearish traders, however, might prefer to wait for some follow-through selling below the 0.6670 region before positioning for any further depreciating move. Investors might also refrain from placing aggressive bets and prefer to move to the sidelines ahead of the key central bank event risk - the highly-anticipated FOMC decision on Wednesday. Technical levels to watch

Tension in markets has increased markedly. Investors are already aware that interest rates will rise by 0.75% to 3.25%, so they are trying to determine the overall impact to the US economy and global financial markets. Most likely, the effect will be negative as rates above 3% are definitely restrictive, affecting the income of businesses, industrial activity and employment. Rising interest rates will hit companies that have high debts first, which will lead to a slowdown in production and beginning of layoffs. In this situation, the stock market may sink deeper, and many companies and businesses will go bankrupt. Treasury yields will also increase, which will lead to a rise in the cost of servicing the public debt by the US government. In the event of geopolitical tensions, no rate hikes, even by the ECB, will ease pressure in the market. This is because dollar is a safe haven asset and a better option in the face of military conflict in the Euro area. Another supporting factor for dollar is the decreasing demand for stocks, which was also brought upon by the increase in rates and the desire of the Fed to actively raise them further. The situation will only change if, at the press conference, Fed Chairman Jerome Powell announces that further plans on interest rates will depend on the incoming inflation data. Stocks and other commodities, such as gold, will rally at that time, while dollar will fall. This is because a decrease in inflation will prompt the Fed to ease the pace of rate increases, and then stop it altogether. Forecasts for today: USD/CAD The pair is trading above 1.3370. If the conflict in Ukraine intensifies, demand for dollar will surge, which will lead to a growth towards 1.3500. AUD/USD The pair fell below 0.6675 because of the escalation of crisis around Ukraine. If the Fed raises rates by 0.75%, the quote will dip further to 0.6585. Relevance up to 09:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322248

The Australian dollar has edged lower today. Earlier, AUD/USD dropped to 0.6654, its lowest level since May 2020. Risk sentiment has soured after Russia announced that it is moving quickly to annex territories that it has captured in Ukraine. European leaders quickly denounced the move as a “sham”. An annexation would seriously escalate the conflict in Ukraine, as Russia could argue that any fighting in the annexed territory was an attack on sovereign Russian land. President Putin also ordered the mobilization of 300,000 reservists, an indication of how badly the campaign is going for Moscow. Fed poised to deliver 75bp increase All eyes are on the Federal Reserve which wraps up its policy meeting later today. The Fed is expected to hike by 0.75%, which would bring the benchmark rate to 3.25%. This move would be significant as rates would move above the neutral rate level of 2.5%, into restrictive territory. There is an outside chance that the Fed will raise rates by a full point, which would unnerve the markets and likely send the US dollar sharply higher. Aside from the rate hike, investors will be keenly monitoring the Fed’s latest quarterly forecasts for the economy. This will include projections for unemployment and interest rate levels. The Fed is expected to remain hawkish and argue that the price of higher unemployment and a further rise in rates is the painful but necessary price to rein in inflation. RBA says rates to increase The RBA minutes of the September meeting didn’t contain any surprises. The minutes reiterated the message that further rate hikes are coming, but the size of the hikes will be data-dependent. At the meeting, members argued over whether to raise rates by 25bp or 50bp – in the end, the Bank went for the latter option, bringing the cash rate to 2.35%. With no inflation or employment data prior to the October meeting, RBA members may again be split over how much to tighten. This should make for an interesting meeting that could trigger volatility from the Australian dollar. AUD/USD Technical AUD/USD has support at 0.6623 and 0.6523 There is resistance at 0.6769 and 0.6869   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar extends losses - MarketPulseMarketPulse

Today, the US Federal Reserve will finally announce its decision on interest rates and present new economic projections as well as the dot plot. On Wednesday morning, the futures market saw an 82% probability of a 75 basis point rate increase and an 18% chance of a hike by 100 basis points at once, which is in line with the earlier forecasts. Meanwhile, the greenback is edging higher but its upside potential is limited. During the day, demand for risk assets could increase as the Kremlin is preparing to hold a referendum in four partially occupied regions of Ukraine on joining Russia. This could trigger geopolitical jitters and change the course of the military confrontation. USD/CAD Inflation in Canada slowed to 7% in August from 7.6% in the previous month, beating economists' forecasts. Core inflation came at 5.8% versus 6.1% a month earlier. In this light, expectations of the hawkish Bank of Canada could ease, causing a drop in the loonie. The Canadian regulator will hold the board meeting in a week. Now there is a high probability of a more than 50 basis point rate rise. Otherwise, the Bank of Canada could choose to pause with tightening as the CPI, excluding food and energy prices, grew by 2.6% on a seasonally adjusted and yearly basis, the lowest rise since February 2021. In other words, with a slowdown in the inflation rate, the Bank of Canada could take some time – at least 5 weeks until the next meeting – to see how things unfold. The net long position on CAD dropped by 481 million in a week. CAD positioning is still bullish although bearish sentiment is increasing. Meanwhile, the fair value is rising. Last week, the target stood at the swing high of 1.3222, The quote broke through the barrier and approached the technical resistance level of 1.3335. The impulse is still strong and is unlikely to end any time soon. The new target is seen in the 1.3640/60 resistance zone. The price could approach the range already by the end of the week. USD/JPY In Japan, inflation hit 3% year-over-year in August, coming above market expectations. Still, Japan is not one of those countries that are now dealing with soaring inflation. Although the price of goods in the country accelerated by 5.7% year-over-year, the price of services saw an uptick of just 0.2% (49.54% of the whole index). This is due to a sluggish rise in wages and long-term prospects of decreasing internal demand amid the depopulation and aging of Japanese society. The Bank of Japan simply cannot set the same inflation target as in the West, given its significant structural differences. In other words, while other central banks, including the Federal Reserve and the ECB, are doing everything to tame inflation, the Bank of Japan should do the opposite. Therefore, the Japanese regulator will hardly change its stance on monetary policy. The Bank of Japan has recently checked to see how the yen is doing. It called dealers at commercial banks to find out about the current state of the foreign exchange market. The bank does this, expecting intervention from the government (the Minister of Finance), which is legally responsible for the country's exchange rate policy. Exchange rate checking serves a dual purpose. Firstly, it lets the market know that the government is ready to intervene. Secondly, it signals that the authorities are concerned about the speed of market change. Oftentimes, after such checks, the government intervenes to stabilize the yen, especially since the yield on 10-year bonds has been holding 1 point above the target (0.251%) for several days. In other words, intervention is the only thing that can be done. This is also a signal of an imminent inflow of liquidity. So, the yen is likely to deepen its weakening. The net short position on JPY is still increasing, with a weekly gain of 1.883 billion. The currency is likely to stay bearish, with the fair value above the long-term MA. In this light, short-term consolidation slightly below 145 is coming to an end and could be followed by a breakout above the mark. The psychologically important level stands at the next target of 147.71. Still, it could hardly be reached. The Federal Reserve's monetary stance is likely to be exactly the opposite of the Bank of Japan's in the long run. So, the yen will remain in a bear trend unless, of course, sudden geopolitical events change the balance of risk. Relevance up to 08:00 2022-09-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322234

The Australian dollar now and in the coming days will be in the weakest position against European currencies, as amid a general strengthening of the US dollar, commodity and stock markets are declining. Oil in the last two days has fallen in price by 2.35%, copper has lost 2.04% over the same time, the S&P 500 stock index -2.82%. The price is approaching the target level of 0.6565 on the daily chart, its breakthrough will open the way to the underlying level of 0.6515. The Marlin Oscillator of the daily scale is going down, it has an oversold zone ahead of it. A slight price correction from the nearest level of 0.6565 is possible, or a larger one from the level of 0.6515. The price is in a completely downward position on the H4 chart - the price is falling below both indicator lines, the Marlin Oscillator is falling in the negative area. Relevance up to 05:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322351

Summary:  The Fed’s 75bps rate hike came with a strong message emerging from the Dot Plot that rate hikes will continue despite risks of slower economic growth and higher unemployment rate. Clear focus remains on tightening the financial conditions, which was reflected in equities and other risk assets. Russia’s partial mobilization has raised geopolitical concerns as well, adding a risk-off bid to the US dollar. EURUSD appears to be heading for 0.98 even as pressure on the Japanese yen remains capped due to lower long-end US yields. Hard to expect Bank of Japan pivot today, but FX comments could be the highlight before focus turns to another jumbo hike from the Bank of England later. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) are looking bearish again The Fed managed to deliver a hawkish surprise without going for a 100bps rate hike, as the message was clear – rate hikes will continue even if economic pain worsens. While the initial reaction from equities was a negative one, some ground was regained with Powell’s presser, once again, lacking further hawkish surprises. However, Powell said in his concluding Q&A response that rates will likely get to levels seen in the Dot Plot, reigniting their signaling power after initially warnings against taking the Dot Plot as Fed’s plan. Whether that was the catalyst or not is hard to tell, but stocks went on to sustain new lows into the close. What’s for sure is the Dot Plot still gives a clearer message on the Fed’s path than Powell. S&P500 fell below 3800 to close down 1.7% while NASDAQ 100 was down 1.8%. General Mills (GIS:xnys) reported better-than-expected earnings and raised its outlook, which helped it to defy the broader market decline, while also lifting other food stocks such as B&G Foods (BGS:xnys) and Kellogg (K:xnys), and supporting the overall consumer staples sector. Another chemical manufacturer joined the chorus of negative pre-announcements. Chemours (CC:xnys) revised down its 2022 EBITDA by 7% from its previous guidance, citing weaker demand from Europe and Asia. Lennar (LEN:xnys), up by 0.9%, reported adj. EPS of USD5.18, beating consensus estimate of USD4.87, primarily due to a lower tax rate and an improvement on margins. Unit orders, however, fell 12% Y/Y, missing expectations of modest growth, signing moderating housing demand, especially in Texas and the West. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) After the Fed delivering a 75bps hike as expected but signaling a hawkish higher terminal rate of 4.6% in 2023 as well as projecting lower real GDP growth rates (0.2% in 2022, 1.2% in 2023, 1.7% in 2024) and higher unemployment rates (4.4% in 2023, 4.4% in 2024, 4.3% in 2025) than the long-run equilibrium levels (1.8% real GDP growth, 4% unemployment rate) anticipated by the Fed, the treasuries yield curve went further inverted, with 2-10 year spread closing at -54bps. Traders sold the 2-year notes, bring yields up by 7bps to 4.05% in response to clear “no pivot” message from the Fed. On the other hand, long-end yields declined on the Fed’s acceptance of slower growth and higher unemployment for longer as a price to put inflation under control. The 10-year yields fell 3bps to 3.53% and 30-year yields plunged 7bps to 3.50%. The U.S. yield curve’s trend to go deeper into inversion continues. The 3-month bills versus 10-year notes yield spread may go negative (inverted) as the 3-month rates keep rising on Fed tightening and the 10-year yield being anchored by improved inflation expectations. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Stocks in Hong Kong, Shanghai, and Shenzhen bourses continued to decline, with Hang Seng Index and CSI300 Index falling 1.8% and 0.7% respectively, and both making new lows.  Hang Seng Tech Index (HSTECH.I) lost 3%, dragged down by China Internet, tech hardware, and EV names.  Sunny Optical (02382:xhkg) tumbled 10.5% as analysts had concerns over a saturated smartphone market and increased competition in smartphone cameras.  Alibaba (09988:xhkg) and Tencent (00700:xhkg) declined 3.7% and 2.5% respectively.  While real estate stocks gained on the mainland bourses after some Chinese cities relaxed second-property buying restrictions, shares of Chinese developers traded in Hong Kong fell, with CIFI 00884:xhkg) tumbling 11.3%, Country Garden (02007:xhkg) sliding 4%.  The solar power space plunged from 5% to 8%.  Following the news of a partial mobilization in Russia to bolster armed forces, higher crude oil prices boosted the shares prices of energy companies, CNOOC (00883:xhkg) up by 2.2%, PetroChina (00857:xhkg) up by 1.2%.  %.  A tanker shipping company, COSCO Shipping Energy Transportation (01138:xhkg) soared more than 8%.  Bloomberg reported that Chinese refiners are applying for quotas from the Chinese government to export as much as 16.5 million tons of fuel oil, such as gasoline and diesel. A dry bulk shipping company, Pacific Basin (02343:xhkg) surged 7.9% after the Baltic Dry Index jumped over 11%.  The tanker shipping space and natural gas space gained and outperformed in A shares.  Asian markets to face risk-off after a hawkish Fed message Australia holds a National Day of Mourning to honour the Queen. Trading of ASX instruments will not occur as the ASX is closed. Trading resumes Friday September 23. Japan’s Nikkei 225 opened down 1.4%, eying the Bank of Japan meeting later today. Taiwan, Indonesia and the Philippines are also likely to raise rates today. AUDNZD and the NZ trade balance AUDNZD remained supported above 1.1320 and upside tests were seen with the relative current account balances in play. NZ reported August trade data this morning and imports accelerated while exports have declined. The deficit in NZ Trade Balance data has widened further to -$12.28B vs. the prior release of -$11.97B on an annual basis. Also, the monthly deficit has widened to -$2,447M against the former figure of -$1,406M. This is a contrast to Australia which is reporting fresh highs in trade balance due to its bulk of commodity exports. The next focus for AUDNZD is perhaps 1.1516, the high of 2015. EURUSD heading for 0.98 EURUSD broke lower to fresh 20-year lows of 0.9814 amid Putin’s partial mobilization and the strength of the dollar from the hawkish Fed signals. While the ECB stays hawkish as well, the relative hawkishness still tilts in favour of the Fed due to the harsh winter coming up especially for Europe as Russia has cut gas supplies. Stronger case of a recession also continues to bode for more downside in EURUSD in the near-term. Crude oil (CLU2 & LCOV2) Crude oil prices bumped up higher on Wednesday after Putin’s speech but gains faded later in the day amid a hawkish Fed boosting the US dollar and strengthening the case for a deeper economic slowdown. The EIA data saw a 1.1mn barrel build in crude stocks, similar to the private data, although given the 6.9mn barrel SPR release, that was a net 5.8mn draw. WTI futures slid below $83/barrel although some recovery was seen in early Asian hours, and Brent futures attempted to head back over the $90/barrel mark.   What to consider? Powell beats the hawkish drum louder The Federal Reserve delivered its third consecutive 75bps rate hike and showed no sign of easing its push into restrictive territory as it battles to cool inflation. This comes despite Fed’s latest projections showing slower growth and a rise in unemployment next year. The FOMC raised the benchmark rate to 3-3.25% and projected the terminal rate at 4.6% in 2023, suggesting Fed will remain committed to bring inflation down even if that means significant economic pain. Fed members estimate the economy will grow 0.2% in 2022, down sharply from a prior forecast of 1.7%. Growth forecasts were also revised lower for 2023 and 2024 to 1.2% and 1.7% from 1.7% and 1.9%, respectively. The central bank now sees the unemployment rate at 3.8% at year-end, up slightly from a prior forecast of 3.7%. But labor supply and demand may likely be restored in subsequent years, with unemployment expected to reach 4.4% in 2023 and remain unchanged the following year, according to the Fed's projections. That is above the prior June forecast of 3.9% and 4.1% unemployment in 2023 and 2024, respectively. Russia’s partial mobilization spurs risk off Russian President Putin, in his televised speech to the nation Wednesday morning, announced partial mobilization, calling up 300k reserves, whilst threatening the west with “All means of destruction, including nuclear ones”. Referendums in Donetsk, Luhansk, Kherson and Zaporozhye (15% of Ukraine territory) are scheduled September 23-27, and any fighting in these regions will eb considered as attacks on “Russian territory” and thus pave the way for a potential military escalation, justifying the use of mass destruction weapons. Looking out for some FX comments at the Bank of Japan meeting While it is still hard to expect a pivot from the Bank of Japan this week, given that Governor Kuroda remains focused on achieving wage inflation, the meeting will still likely have key market implications. There will likely be increased voicing of concerns by the authorities on yen weakness, and there is also some chatter around the Bank of Japan bolstering its lending programs to support the private sector as high inflation curbs spending. Also watch for intervention risks as highlighted here. Bank of England may tilt to hawkish despite recession concerns The BoE meets on Thursday after last week’s meeting was delayed by a week for Queen Elizabeth II’s funeral. Policymakers are expected to hike rates by another 50bps, which would bring the Bank Rate to 2.25%, although a 75bps hike is still on the table. Beyond September, analysts forecast a 50bps increase in November and 25bps in December, taking the Bank Rate to 3%, where it is expected to stay until October 2023. Also worth highlighting is the “fiscal event” delivered by new Chancellor of the Exchequer Kwasi Kwarteng on Friday. This will be his first statement on how he plans to deliver new Prime Minister Liz Truss' pledge to make the U.K. a low tax economy, which risks stoking inflation in the medium-term. However, short-term plans on energy support package suggests lower inflation to end this year, but that wouldn’t be enough for the BoE to go easy on its inflation fight. Rio Tinto joins BHP in saying Copper’s near-term outlook is challenged Rio Tinto’s CEO has joined a suite of companies, including BHP, saying copper’s short-term outlook faces pressure. From supply-chain issues to 30-year high inflation and restricted demand from China, the metal is seeing less demand, and supply is outpacing supply. However, that is not expected to be the case over the longer term. Goldman Sachs predicts copper demand will be greater than supply by 2025, and will push prices to twice their current levels. Copper is used in everything from buildings to automobiles, to wiring in homes and mobile phones. Chinese media called for Loan Prime Rate Cuts Although the Loan Prime Rates (“LPR”) were fixed at the same level earlier this week, leading Chinese financial newspapers, including the China Securities Journal and Shanghai Securities Journal are calling for LPR cuts in the coming months to boost the economy.  Temporary measures to shield European consumers from high energy prices are becoming permanent According to the calculations of the Brussels-based think tank Bruegel, European governments have allocated about €500bn to protect consumers since September 2021 (see the report). The exact figure is higher because Bruegel has not yet counted the most recent packages from the United Kingdom, Germany and Denmark. We would not be surprised if the total amount will reach at some point next year €1tr. But there is more. European governments have also allocated more to support utilities facing risk of liquidity crisis (several instruments are used including loans, bailouts and fully fledged nationalisation). This represents a total amount of €450bn (this is actually above half of the NexGenerationEU funding which was agreed after the Covid crisis). Dreadful growth forecasts for the eurozone We all know forecasting is a tricky task, even more so in the current macroeconomic environment (the impact of the energy crisis is tough to assess). Yesterday, Deutsche Bank revised downward its 2023 growth forecast for the eurozone, from minus 0.3 % to minus 2.2 %. This is a massive drop in GDP if it happens. It would actually be the third lowest euro area GDP growth since WW2 (behind 2009 and 2020, of course). This shows how expectations are low for the eurozone next year.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-sept-22-2022-22092022

Economists at Westpac have lowered their forecast for the AUD/USD by year’s end from 0.69 to 0.65. However, they expect the pair to recover in the second half of the next year. End-2023 forecast also lowered to 0.72 from 0.75 “We have significantly lowered our 2022 end year ‘target’ for the AUD/USD to 0.65. That means that over the remainder of 2022 there will be periods when the aussie will trade below the 0.65 level given the high volatility in currency markets to date.” “We still expect the AUD to lift against the USD in 2023, with most of the recovery occurring in the second half of 2023 but have lowered our forecast for end-2023 for AUD/USD from 0.75 to 0.72.”

Yesterday, the aussie fell by 73 points. With the lower shadow, the price almost touched the embedded line of the descending price channel, a corrective rebound took place from it. The signal line of the Marlin Oscillator has worked out the lower limit of its own channel and also turned into a correction. The resistance is the target level of 0.6515. Correction, upon the reversal of the oscillator, can be stretched over time, for several days. Upon completion of the local growth, we expect a continuation of the decline to the lower levels of the price channel: 0.6400, 0.6350. The Marlin Oscillator went either into a reversal or into a consolidation on the four-hour chart. The price is also in a neutral state between the levels of 0.6439 and 0.6515. It's time for the market to cool down after the hyped events yesterday and Friday.     Relevance up to 04:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322724

Markets tried to recover from the recent sharp sell-offs, but failed. And after a highly volatile trading session, European and US stock indices ended with mixed dynamics. The main reason is the confidence of investors that not only the Fed, but also a number of other world central banks will aggressively raise interest rates, trying to tame galloping inflation. In fact, Bank of England Member Huw Pill and Fed members Neel Kashkari and James Bullard spoke about the need to fight high inflation by any means because high prices continue to put pressure on national economies. This indicates that the two central banks are not putting their utmost priority on economic growth, but on curbing inflation. That is why it will not be surprising if interest rates continue to increase in the foreseeable future, which will cause further sell-offs in stock markets and rise in dollar. The upcoming inflation data in the Euro area will also stir up the markets again, especially if there is a slight slowdown in growth or an increase. It will lead to a new wave of sales in euro in the forex market. Forecasts for today: AUD/USD The pair is currently trading at 0.6375. A consolidation below may lead to a further decline to 0.6245. XAU/USD Gold is testing the level of 1621.00. A drop below it could cause a price drop to 1600.00.   Relevance up to 09:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322868

The Australian dollar can’t find its footing and continues to lose ground against the surging US dollar. AUD/USD was down considerably earlier today but has pared most of these losses. In the North American session, AUD/USD is trading at 0.6425, down 0.14%. Australia retail sales higher than expected Australia’s retail sales for August rose 0.6% MoM, above the consensus of 0.4%. This was slower than the super-strong gain of 1.3% in July, but household spending appears to be holding well, despite the Reserve Bank’s rate-tightening cycle and high inflation. The RBA hiked rates by 0.50% earlier this month, bringing the cash rate to 2.35%. The RBA isn’t done with the current tightening cycle, but some Bank officials had signalled that the pace of tightening would slow after a series of large 0.50% rate increases. The strong retail sales release puts such a scenario in doubt since it’s unlikely that inflation has peaked if retail sales remain strong. The central bank has designated inflation as public enemy number one and needs the economy to slow in order to curb inflation, even if that means the price is a recession. The RBA meets on October 4th and may have to deliver another 0.50% and hold off from easing on rates until the data shows that the economy is slowing. Fed officials have signalled that the current cycle may soon come to a close, but the markets don’t expect any easing until there are clear signs that inflation has peaked. Although CPI dropped in August, inflation was higher than expected, which poured cold water on any hopes of the Fed easing up on policy. The war in Ukraine has seen some worrying developments, which is weighing on risk sentiment. The Nord Stream pipeline system, although inactive, was hit by explosions that appear to have been deliberate. This follows the sham referendums in Russian-occupied Ukraine, which Moscow expected to formally annex the territories on Friday. This double-whammy of a hawkish Federal Reserve and a loss of risk appetite due to the escalation of the war in Ukraine has pushed the Aussie to its lowest levels since April 2020. AUD/USD Technical AUD/USD has support at 0.6623 and 0.6523 There is resistance at 0.6769 and 0.6869 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar extends losses - MarketPulseMarketPulse

The price correction from the embedded line of the price channel (0.6364) turned out to be very strong yesterday (170 points) due to the increased volatility of the entire currency market. The 0.6515 target was worked out. The price is decreasing in today's Asian session. With the Marlin oscillator turning down, we can expect the price to return to the target supports at 0.6439, 0.6400 and update the low at the target level of 0.6350, which will become a retest of the price channel line. On a four-hour scale, the price is trying to consolidate below the level of 0.6515 (consolidation will occur with the closing of the candle), the Marlin Oscillator is approaching the zero line. Leaving the area below it can increase pressure on the price. We follow the price behavior on the supports 0.6439 and 0.6400.   Relevance up to 04:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322978

Weekly Review & Forecast: The general trend of the AUD/USD pair is still stronger to the downside. Investors will not care about the arrival of technical indicators towards oversold levels as far as interacting with the factors of the gains of the AUD dollar and the continued faltering of the USD. The closest bearish targets are currently 0.6441 and then the parity price for the currency pair. New targets 0.6404, 0.6350 and 0.6300 (historical target). AUD/USD pair is expected to trade around the spot of 0.6441 and 0.6460 by started of this week, according to trading economics global macro models and our expectations. Looking forward, we estimate it to trade at 0.6441 in or Sept. 2022. The pair dropped from the level of 0.6514 (this level of 0.6514 coincides with the ratio of 23.6%) to the bottom around 0.6441. Today, the first resistance level is seen at 0.6514 followed by Yesterday (the weekly pivot point), while daily support 1 is found at 0.6404. Also, the level of 0.6514 represents a weekly pivot point for that it is acting as major resistance/support this week. Some follow-through selling would make the AUD/USD pair vulnerable to challenging the valence mark in the near term. From a technical perspective, the overnight swing low, around the 0.6441 area, now seems to act as a support point, below which spot prices could extend the fall towards the 0.6404 mark. The AUD/USD pair continues to move downwards from the level of 0.6350. For these reasons we would be very difficult to see further significant decline for the euro before tomorrow, with signs of stabilization and correction to be the most possible scenario. A choppy morning saw the AUD/USD pair fall to an early morning low of 0.6441 before rising to a high of 0.6514 (pivot point). An extended rally could test resistance at 0.6441 and the second major resistance level (R2) at 0.6559. The third major resistance level (R3) sits at 0.6596. The direction of the AUD/USD pair may reflect the strength of either the EU or AUD economy. Moreover, the EUR to AUD dollar rate may reflect the overall global market sentiment. We had already shared in our previous topic that the psychological price sets at the level of 0.6514. The AUD/USD weekly forecast is mildly tilted towards the downside as the pair failed to sustain above the 0.6514 area after several attempts. The AUD/USD pair weekly forecast is mildly tilted towards the downside as the pair failed to sustain above the 0.6514 area after several attempts. If the price were to depress the resistance 0.6514 in the short term, this would be a sign of possible consolidation in the short term, but against the trend trading would then perhaps be riskier. Moreover, the moving average (100) starts signaling a downward trend; therefore, the market is indicating a bearish opportunity below 0.6514. So, it will be good to sell at 0.6514 with the first target of 0.6404. It will also call for a downtrend in order to continue towards 0.6350. The strong weekly support is seen at 0.6350. Sellers would then use the next support located at 0.6325 as an objective. Crossing it would then enable sellers to target 0.6300.     Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295004

The Australian dollar closed the day down 95 points on Friday, having worked out one of the embedded lines of the falling price channel (daily) with a lower shadow. This morning the price is trying to get above the resistance of 0.6439. In the event of consolidating above the level, the price may continue to grow towards the target resistance of 0.6515. The Marlin Oscillator is already turning into a correction. The price's return to the area under the Friday low, or rather, under the line of the price channel of 0.6385, opens the target along the underlying parallel line in the area of the price level of 0.6330. On a four-hour scale, the price is attacking the resistance level of 0.6439 and at the same time the Marlin Oscillator is trying to move into the zone of positive values. If such a synchronous qualitative transition takes place, then the aussie will continue its short-term growth, but it may not reach the 0.6515 target, since the MACD line is already passing under this level, and over time it will be lower and lower, creating its own resistance. We are waiting for the correction to end and the price to return to a new downward wave.   Relevance up to 04:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323206

AUD/USD firms up at the start of the week, with all eyes on Tuesday’s RBA. US dollar is finding fresh demand as Asia’s factory activity weakens. Further upside appears capped in the aussie amid risk-aversion. AUD/USD is paring back gains towards 0.6400, having met fresh supply on a rejection near the 0.6450 psychological level. Bears are fighting back control, as the US dollar recovery is ganing traction amid strengthening risk-off flows in the late Asian session. The aussie is adding 0.50% on the day, at the time of writing, underpinned by a short-covering rally. Investors resort to repositioning ahead of Tuesday’s RBA policy decision. The Australian central bank is widely expected to hike rates by 50 bps but a dovih surprise of 25 bps cannot be ruled out, as recession fears mount. Despite the renewed upside, bulls have pulled back slightly over the last hours, as Asia’s factory activity weakens due to global slowdown and surging cost pressures, leaving investors on the edge. Further, falling commodities prices also add to the weight on the resource-linked aussie. Markets also remain cautious amid aggressive Fed tightening bets and ahead of the US payrolls data due for release this Friday.

Normally, higher rates would be seen as good for the banking sector. So there is understandably some concern about the financial markets since Australian banking shares are down considerably despite a broad consensus that the RBA will raise rates tomorrow (or late tonight, depending where you are on the globe). There is a global issue, and it might give the RBA a little pause. Rumors circulated on Sunday that a "major bank" was "on the brink" of collapse. This sent global banking shares down. It was also reported that the BOE was looking at Credit Suisse, given the shake up in global markets. The sudden moves in the pound and yen have made things particularly difficult for banks. What it means for the RBA The one thing that could significantly disrupt central banks' plans with regards to monetary policy is the risk of failure of a major bank. That would be equivalent to a "Lehman Brothers" event, but on a global scale. Even if it isn't a bank in the country, the loss of confidence in the financial industry could shake policy, and force central banks to inject liquidity. However, it's just rumors at this point. Putting that aside, the RBA is broadly expected to raise rates by 50bps, and continue tightening. There is a discrepancy with the projections, though. 97% of Australian economists forecast 50bps, but only 75% of international economists do. What it means for the markets In the scheme of practical effects, the solid consensus implies that the rate hike is fully priced in. What level of uncertainty there is around the outlook. A recent survey by Bloomberg showed that a majority of international economists believe this is the last "outsized" hike by the RBA, and that only 25bps will be forthcoming at the next meeting. Australian economists aren't so sure, with more betting on stronger action by the Reserve Bank. They point to inflation still rising and data remaining strong (if the housing situation isn't considered). Another point brought up is that the RBA could go for a one-and-a-half hike, since it is at an "unusual" rate that isn't a multiple of 0.25. Thus, there is a growing call for a "consensus" hike of 40bps at the next meeting, splitting the difference between 25 and 50. It's not all up to them As for the currency, the major obstacle is that the Fed keeps raising rates faster than any of the other majors. Even the most hawkish scenario for the RBA leaves the interest rate gap widening. And with inflation still rising in Australia, while US inflation (at least on the headline) is receding, then the real spread is getting even wider. A post rate rally in the case that Lowe gives clear indications that more than 25bps is likely at the next meeting, might sputter out quite quickly. If the RBA fails to be as hawkish as the Australian economists expect, then the currency could slide even further.

The dollar is falling again at the beginning of the week after a strong fall last Wednesday, when the dollar index (DXY) lost more than 1%, and further decline on Thursday. Today, at the time of this writing, DXY futures are trading near 111.93, 280 pips below a new local 20-year high reached last week. It seems that buyers of the dollar have not yet decided on active actions. Perhaps this is in anticipation of the Institute for Supply Management (ISM) report on business activity and employment in the manufacturing sector of the US economy. The PMI index for September is predicted at 52.3, slightly lower than the previous value of 52.8. A result above 50 is seen as positive and strengthens the USD. However, the expected relative decline is likely to alarm investors. The indicator has been gradually falling since May of this year (previous values of the indicator: 52.8, 53.0, 56.1, 55.4, 57.1, 58.6, 57.6). It is possible that its decline may be more than expected, and this, one way or another, indicates a slowdown in the growth rate of activity in this most important sector of the American economy, which cannot be ignored by the central bank's leadership when conducting a cycle of tightening monetary policy. Although, as has been repeatedly stated by various representatives of the Fed leadership, a recession is most likely unavoidable. However, the Federal Reserve still intends to tighten monetary policy further, actively raising the interest rate in order to curb high inflation, which is not declining in any way. A number of speeches from the Federal Reserve representatives are scheduled for today (at 13:05, 18:15, 19:10, 22:45 GMT). Their speeches are assumed to focus on the need for further interest rate hikes, and this will most likely not have a strong impact on markets that are already ready for this. But if they talk about the possibility of a pause or a slowdown in this cycle, the decline in the dollar, observed last week, may continue this week, especially on weak macro data from the US. The focus of market participants will be on the publication of key data from the US labor market on Friday—the US Department of Labor will present its monthly report for September. Positive indicators are expected, while unemployment remains at minimal levels. Market participants who follow the dynamics of commodity currencies and, in particular, the Australian dollar will be waiting for the publication tomorrow (at 03:30 GMT) of Reserve Bank of Australia's decision on the interest rate, which is predicted to be raised again by 0.50% to 2.85%. Actually, this is a bullish factor for the national currency. AUD may also receive support amid a decrease in supply on the natural gas market due to the undermining of the Nord Stream gas pipelines. Australia is known to be a major supplier of raw materials, including coal and liquefied natural gas. However, the market's reaction to tomorrow's interest rate hike may not be very positive, and the rate hike may not become a growth driver for the AUD, given the growing recession risks for the Australian economy. The RBA, like other major world central banks, is in the same difficult situation—high and rising inflation, on the one hand, and a slowdown in the economy, on the other. In other words: "rates cannot be raised or lowered." At the same time, the US dollar continues to receive support as a safe-haven asset, especially given the high geopolitical risks in Europe and the world. As of writing, the AUD/USD pair is trading near the 0.6450 mark, resting on the resistance level of 0.6455. In case of its breakdown, further corrective growth is not ruled out. In general, the downward dynamics of AUD/USD remains, making short positions preferable.       Relevance up to 11:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323242

AUD/USD has started the trading week with strong gains. The Aussie is trading at 0.6447, up 0.67%. Is the nasty slide over? The Australian dollar is coming off a third straight losing week. September was a disaster, as AUD/USD plummeted 6.4%. The escalation in the war in Ukraine, which has sapped risk sentiment, and the aggressive Federal Reserve have dampened market appetite for the risk-related Australian dollar. RBA likely to hike by 50bp The RBA meets on Tuesday, and Bank members are widely expected to deliver a fifth consecutive hike of 50 basis points, which would take the benchmark rate to 2.85%. After that, the RBA may lower gears to 25bp moves. Governor Lowe has signaled that he would like to shift to 25bp hikes at some point, which would help guide the economy to a soft landing and avoid choking off economic growth. However, there is no indication that inflation has peaked, and soaring inflation was the primary reason for the RBA’s sharp rate-hike cycle. The next inflation report will be released in late October, with the RBA November meeting just one week later. It’s a safe bet that the size of the rate hike in November will depend to a large extent on that inflation report. Read next: British Pound (GBP): Would The UK Tax Cut Prospect Be Abandoned? | Crude Oil Up| FXMAG.COM In the US, the Fed may make a U-turn in policy before the end of the year, depending on the strength of the economy. The data can be conflicting, which was the case on Friday. The Fed’s preferred inflation indicator, the Core PCE Index, rose 4.9% in August, up from 4.7% in July and above the consensus of 4.7%. At the same time, the University of Michigan sentiment index showed that inflation expectations for 5-10 years ticked lower to 2.8%, down from 2.7%. In the meantime, the Fed’s hawkish stance has fuelled the US dollar’s upswing. AUD/USD Technical AUD/USD has support at 0.6450 and 0.6363 There is resistance at 0.6598 and 0.6685 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. AUD/USD rebounds ahead of RBA - MarketPulseMarketPulse

Summary:  After a series of positive surprises on US economic data last week, the disappointment from the ISM manufacturing was a big deal for the markets. US Treasury yields slumped, with rising expectations of an earlier Fed pivot which we think may be premature. But that helped equity markets close higher, more a signal of positioning rather than expectations. UK’s tax cut U-turn instilled a fresh bid in sterling, but further impeded confidence in the government. Oil prices extended gains and Gold also reclaimed the $1700-mark. On watch today will be how the Reserve Bank of Australia transitions to a slower rate hike pace. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rally over 2% US stocks rallied for the first day of the quarter with the Nasdaq100 up almost 2.4%, and the S&P500 up about 2.6%, which is the best gain since July 27. It comes as the 10-year US Treasury yield rolled over to trade at around 3.65% (after topping 4% at one-point last week). The risk-on mood was fueled by several things; firstly, the UK government did a U-turn and will reverse plans to scrap the top rate of income tax. Secondly, the United Nations called on the Fed and other central banks to halt interest rates hikes. And thirdly, what also boosted sentiment was that two Fed speakers at the weekend, Brainard and Daly were reportedly discussing the downside of hiking too fast. And fourthly, weaker than expected US economic news came out with; US manufacturing falling for the third time in four months. As for the S&P500, the technical indicators; the MACD and the RSI also remain in oversold territory, which supports the notion that some investors believe a short-term rebound may be seen perhaps amid the risk-on mood. However, caution still remains in the air ahead of further Fed's hikes. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) The US Treasury yields retreated on Monday as a subdued ISM manufacturing print led to calls of slower Fed tightening and an earlier Fed pivot, which had already been building last week as well due to the risk of wider market disruptions as things have started to break. The reversal of the UK tax cut also supported Gilts, and some pass-through was seen to the US Treasuries. 2-year yields declined over 16bps to 4.11%, while the 10-year was down 19bps to 3.63%. Australia’s ASX200 (ASXSP200.1) poised to raise 1.5% with a focus on oil stocks Commodities will be focus on the ASX today with Oil and LNG stocks like Woodside (WDS), Santos (STO) set to see some action after the oil and gas prices jumped 5%. Other stocks to watch include Worley (WOR) who services the energy sector. Iron ore companies will be watched as well, supported higher by the iron ore price jumping 1.8% to US$94.50. So it’s worth watching if BHP, RIO and CIA can extend their short-term uptrend. AUDUSD rallies back to 0.6516 ahead of RBA’s expected 0.5% hike Australia’s RBA is likely to make another jumbo rate hike and take rates up by 50 bps (0.5%) to 2.85% on Tuesday (which is what consensus thinking is). And then after that, the RBA is likely to move in smaller increments, according to interest rate futures and what RBA Governor Phillip Lowe signaled he wants. With the majority of Australian mortgages at floating-rates, and wage growth being stronger, the RBA’s thinking is that most Aussies will be able to sustain the higher rates as a lot of Australian made extra mortgage repayments amid the lockdowns, as pulled back on discretionary spending. However there are about 2.5 million Aussies who have no buffer. And 9.8 million Aussies have mortgages. So we still think a property pull back might be on the cards. It’s the magnitude of the pull back that is being questioned. The technical indicator, the MACD suggests the AUDUSD could rally if the RBA proceeds with a likely 0.5% hike. However over the long term, our house view remains bearish on the AUDUSD until Fed hikes cool, and commodity demand picks up from China. GBPUSD made a strong recovery, will it last? Cable was seen advancing above the 1.13 handle in early Asian hours on Tuesday as it extended Monday’s gains following announcement of plans to scarp the tax cut by the UK government. A softer dollar also supported pound’s gains, amid a slide in US Treasury yields. However, more Fed tightening is still in the cards and the lack of trust in the new UK government cannot be ignored even if the tax policy has been reversed for now. Focus on the BOE meeting on November 3 where 115bps rate hike is priced in, lower than last week’s pricing of 150bps. However, a full-budget statement will be released before that and further austerity measures, if included, can bring fresh downside for the sterling. EURGBP slid below 0.8700. Crude oil (CLX2 & LCOX2) extends gains on OPEC+ chatter Crude oil trades higher ahead of Wednesday’s OPEC+ meeting in Vienna as the alliance is considering a production cut of more than 1 million barrels/day to support prices following a 25% slump during Q3 2022. That would be the biggest cut since the pandemic with OPEC+ slashed production by 10 million barrels/day as demand collapsed. WTI futures rose above $83/barrel while Brent was close to $90. With several OPEC+ producers, including Russia, producing below target, and only Saudi Arabia may be able to limit production without a loss in additional market share. Meanwhile, expectations of an earlier Fed pivot also stabilized demand weakness expectations. Gold (XAUUSD) reclaims 1700 on lower US yields Gold extended recent gains as yields on Treasuries continued to decline. After the 10-year yields were seen topping the 4% level at one point last week, they are now off about 40bps to end at 3.63% yesterday. Meanwhile, a softer dollar and rising geopolitical tensions have also brought back investor demand for the yellow metal. A weaker ISM manufacturing print yesterday (read below) has also increased calls for an earlier Fed pivot, which we think may be premature. But the increasing calls for a recession have meant gains for Gold which was last seen back at $1,700/oz.   What to consider? US ISM manufacturing disappoints The headline for September’s US ISM manufacturing came in weaker than expectations at 50.9 from the prior month’s 52.8 and expected 52.2. Both employment and new orders both dropped into contractionary territory printing 48.7 (exp. 53.0, prev. 54.2) and 47.1 (prev. 41.3), respectively. The report showed that higher interest rates are starting to weigh on business investment sentiment, at least in the interest rate sensitive sectors. Still, the inflationary gauge of prices paid declined to 51.7 (exp. 51.9, prev. 52.5) falling for the sixth straight month. Supplier delivery times suggested some easing on the supply chains, but overall the report indicated the case of a slowdown in the US economy as rapid Fed tightening continues. UK scraps plans to cut taxes The UK government confirmed reports it will not go ahead with the abolition of the 45p rate of income tax but they are committed to borrowing extra over the winter to help with the ongoing energy crisis. The Chancellor told BBC the proposal was "drowning out a strong package", which includes support for energy bills, cuts to the basic rate of income tax, and the scrapped increase in corporation tax. However, he saw the abolition of 45p tax rate as a distraction from the overriding mission, and thus decided to remove it. This puts water on the Bank of England’s bond-buying, and exposes further the cracks in UK policymaking, thus suggesting that the UK assets are not out of the woods. A full-budget, which has now been brought forward to before the next BOE meeting on November 3, could include more tax cuts. Fed pushes back on an earlier pivot Fed’s NY President John Williams repeated inflation is too high and the Fed's job is not done, also saying that the monetary policy is still not in restrictive zone, pushing back on some calls for an earlier Fed pivot. He acknowledged signs of a slowdown in the housing sector or the consumer and business investment spending, but nothing that could deter the Fed from fighting inflation. On forecasts, he sees inflation likely down to 3% by next year (median view for Core PCE 3.1%), and the US is likely to see unemployment rise to 4.5% by end of 2023 (median view 4.4%). Thomas Barkin (2024 voter) made the case for more inflation in the post-pandemic world, noting that the Fed must consider global developments, but the focus is on the US. Japan’s Tokyo inflation accelerates further Japan’s September Tokyo CPI came in at 2.8% YoY, a notch softer than last month’s 2.9% YoY and in-line with expectations, but the core-core (ex-fresh food and energy) print accelerated to 1.7% YoY from 1.4% YoY, also coming in ahead of expectations at 1.4% YoY. Higher global food and energy prices along with a record weak yen has brought import price pressures on Japan’s economy, and this print hints at further gains in CPI on the horizon. While the pressure on the Bank of Japan to hike rates may have eased for now as US yields are easing, but there is still more Fed tightening in the pipeline and fresh pressures cannot be ignored. Reserve Bank of Australia may step away from moving to a slower rate hike pace The Reserve Bank of Australia is scheduled to announce its next rate decision on Tuesday, October 4. Governor Lowe had previously signalled that the pace of rate hikes is likely to slow from here after four consecutive rate hikes of the magnitude of 50bps. However, money markets and Bloomberg consensus forecast is still calling for another 50bps rate hike at the October meeting suggesting that RBA may delay taking the foot off the pedal just yet. The recent slide in the Australian dollar and worries over a turmoil in global financial markets may prompt the policymakers to front-load more of the rate hikes while the economy is still holding up. Retail sales data last week was upbeat while the first monthly inflation data reading at 6.8% is only slightly off the 7% levels seen in the preceding month. So, even as a monthly meeting can ensure a steady pace of rate hikes even with a smaller 25bps rate move, policymakers would possibly prefer to make a larger move this week to provide some support to the AUD. Likewise, the Reserve Bank of New Zealand is also expected to hike rates by another 50bps at their October 6 meeting.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-4-oct-04102022

AUD/USD meets with some supply after RBA hikes interest rates by 25 bps on Tuesday. A modest USD uptick further exerts some pressure, though the downside seems limited. Retreating US bond yields, the risk-on impulse seems to cap the buck and offers support. The AUD/USD pair comes under fresh selling pressure on Tuesday and erodes a part of the previous day's strong gains. The pair maintains its offered tone through the early European session and is currently placed near the lower end of its daily trading range, just above mid-0.6400s. The Australian dollar reacts negatively to the Reserve Bank of Australia's (RBA) decision to slow the pace of policy tightening and raise interest rates by 25 bps against expectations for a 50 bps hike. This, along with a modest US dollar uptick, exerts downward pressure on the AUD/USD pair. The downside, however, seems limited, at least for the time being, warranting some caution for bearish traders. In the accompanying monetary policy statement, the Australian central bank said that it expects to keep raising interest rates this year as inflation is trending well above the target range. Furthermore, RBA Governor Philip Lowe noted that inflation is likely to rise in the coming months and end the year at about 7.75%. This, along with a tight labour market, gives the RBA more space to tighten further. The USD, on the other hand, has been struggling to gain any meaningful traction amid the ongoing fall in the US Treasury bond yields. Apart from this, the risk-on impulse - as depicted by a strong follow-through rally in the US equity futures - acts as a headwind for the safe-haven greenback. This, in turn, offers some support to the risk-sensitive aussie and helps limit losses for the AUD/USD pair. Market participants now look forward to the US economic docket - featuring JOLTS Job Openings and Factory Orders data. This, along with speeches by FOMC members and the US bond yields, will influence the USD and provide some impetus to the AUD/USD pair. Traders will further take cues from the broader market risk sentiment to grab short-term opportunities around the major.

Summary:  Markets yesterday show how quickly this hot-tempered market can try to sniff out a Fed that will eventually pivot to a less hawkish stance as a weak US September ISM Manufacturing survey data point engineered a huge decline in US yields and significant USD weakness. More important US data is to come this week through Friday’s jobs report. Elsewhere, the surprisingly dovish RBA battled with supportive developments in commodities to sway the Aussie overnight. FX Trading focus: Desperation for the Fed pivot. Sterling: can it really be that easy? Dovish RBA. Yesterday saw US 10-year treasury yields almost 25 basis points lower from intraday highs, with much of the treasury buying/yield drop coming in the wake of a weaker than expected September US ISM Manufacturing survey, out at 50.9, below the 52.0 expected and 52.8 in August. The New Orders were far worse than expected at 47.1 vs. 50.5 expected and 51.3 in August. Alas, we have to remember that the Manufacturing sector is small in the US and about half of the dips to near or below 50 have not indicated imminent recession in the US. The ISM Services survey – up tomorrow - would be a different matter if it were to show marked deterioration. Elsewhere, a tweet from the WSJ’s Nick Timiraos noting that influential economist Greg Mankiw agreed with economist/pundit Paul Krugman’s assessment that the Fed is tightening too quickly may have helped to drive the sentiment shift at the margin as well. Pushing back against that was Fed Vice Chair Williams out expressing the belief that the Fed must remain on message: “Tighter monetary policy has begun to cool demand and reduce inflationary pressures, but our job is not yet done.” Williams speech does suggest that the Fed thinks that it is succeeding, so the strongest risk to markets here would be stronger US data suggesting a still strong pace of activity in services and a still very tight labor market with accelerating wage pressures. The Fed forecast assume a fairly soft landing of weak growth and 4.4% unemployment. Self-feeding cycles in a downturn and the Fed’s focus on lagging indicators like employment are likely to eventually lead to far worse outcomes. The USD has weakened at the outset of the week here – but note EURUSD holding the line so far just ahead of the key 0.9900 level. AUDUSD has far more wood to chop for a reversal, as discussed below. The most remarkably priced pair at the moment, however, may be USDJPY, which remains pinned near 145.00 despite the significant drop in long US treasury yields. Still uneasy about the risk of a blowout market-BoJ/MoF showdown – that’s a very weak performance from the yen today. Chart: AUDUSDThe AUDUSD chart has been an interesting one to watch since yesterday and overnight. Strong risk sentiment and lower US treasury yields weighed on the US dollar and helped boost commodity prices, both strongly Aussie supportive. But then the huge mark-down in Australian yields on a quite dovish RBA (more below) challenged the Aussie overnight. Looks like a battle-zone tactically around the local 0.6530 resistance, which was briefly taken out this morning on the further USD weakness before reversing back into the zone later in trading today. The down-trend is so well established that it would take a surge to at least above 0.6700 to begin challenging the down-trend here. The RBA surprised the majority of observers with a smaller 25 basis point hike to take the policy rate to 2.60%. It’s a reminder of the vast shift relative to the old regime, in which one might have expected an RBA rate at least 100-200 bps higher than the Fed’s. The last time the Fed was hiking to north of 3.00% was in mid-2005, when the RBA cash target had already reached above 5%. The RBA chose to emphasize caution in its latest statement, citing the anticipation that unemployment will eventually rise beyond the near term strength in the labor market as the economy eventually weakens. Governor Lowe and company are clearly uneasy and uncertain on the effects of the sharp tightening in the bag on mortgage rates and future spending, and the statement continues to cite lower wage growth than elsewhere. In addition to AUDUSD note above, also interesting to watch the relative strength in AUDNZD over tonight’s RBNZ, as the sharply lower Australian yields (the year-forward RBA rate has been marked a remarkable 50 basis points lower by the market after this meeting). A surrender below the 1.1250-1.1300 zone would suggest a risk that the attempt to reprice the pair higher on the shift in relative current account dynamics I have cited before has failed for now. Sterling rose further after Chancellor Kwarteng yesterday reversed his decision on the tax cut for the highest incomes in the UK. Interesting that this is was particularly item, while politically unpopular, was one of the least consequential in terms of the fiscal impact. For now, given the soaring risk sentiment backdrop, sterling short covering continues, but surely it’s not this easy? Technically, watching the major resistance zone at 1.1500 zone in GBPUSD and whether the bearish reversal back into the old range below 0.8700 in EURGBP sticks. This is still a government that is very much on the rocks. The latest controversy PM Truss is courting is claiming that she has yet to decide whether UK welfare distributions, outside of pensioners, should be raised with inflation, which has some Tory MP’s up in arms. Chancellor Kwarteng, feeling the rising pressure, will bring forward his fiscal statement to later this month from late November, around the time the Office of Budget Responsibility publishes its forecasts. Table: FX Board of G10 and CNH trend evolution and strength.The USD rose so far in its up-trend before the recent setback, that there is some residual medium term up-trend strength left, though momentum has shifted markedly against the greenback. The opposite is the case for sterling, which has achieved a positive trend reading versus the G10 broadly due to weak G10 smalls of late (note GBPNZD, for example, at a high since late February. Elsewhere, strong risk sentiment, together with concerns of a struggling Swiss bank have brought CHF south in a hurry over the last week. Table: FX Board Trend Scoreboard for individual pairs.CHF on its back foot and our longest surviving trend, the GBPCHF downtrend, is now dead. Sterling upside breaks are spreading, in fact. Also note the shift in US yields taking XAGUSD onto a sudden moonshot, while XAUUSD is eyeing an up-trend as well. Upcoming Economic Calendar Highlights 1230 – ECB's Centeno to speak 1300 – US Fed’s Williams (voter) to speak 1315 – US Fed’s Mester (voter) to speak 1400 – US Aug. Factory Orders 1400 – US Aug. JOLTS Job Openings 1500 – ECB President Lagarde to speak 0100 – New Zealand RBNZ Official Cash Target Announcement Source: https://www.home.saxo/content/articles/forex/fx-update-the-desperation-for-the-fed-pivot-04102022

AUD/USD started the day with losses, but has since recovered. The Aussie is trading at 0.6540, up 0.37%. RBA surprises with 0.25% hike The Reserve Bank of Australia was widely expected to deliver a fifth consecutive hike of 50 basis points at today’s meeting, but the Bank surprised the markets with a small increase of 0.25%, which raises the cash rate to 2.35%. Governor Lowe had signalled that he was planning to ease up on the 0.50% increases, but with inflation running at 6.1% and not giving any indications of peaking, expectations were for the Bank to deliver at least one more 0.50% hike. Interestingly, the RBA statement acknowledged that inflation has not yet peaked and is expected to rise to 7.75% in 2002 before dropping to 4.0% in 2023. If soaring inflation has not yet been beaten back, why did the RBA ease up? The answer is likely related to the continuing global economic uncertainty – China’s economy has been slowing and the war in Ukraine is escalating, with Europe facing an energy crisis this winter. The RBA statement included the usual mention that inflation and the labour market will be important factors in future rate policy, but Lowe & Co. will also be closely eyeing global developments. As well, the RBA is anxious to prevent a recession due to the sharp tightening in recent months, and a 0.25% hike will be easier for the economy to absorb than a 0.50% increase. Read next: RBA Missed Market Expectations With Their Interest Rate Decision| FXMAG.COM Over in the US, the Fed hasn’t signalled it will change its aggressive tightening stance just yet. Still, there are signs that the economy is slowing down. On Monday, the ISM Manufacturing PMI dropped to 50.9 from 52.9, barely in expansion territory and its lowest level since May 2020. Until inflation is unmistakably moving lower, the Fed is likely to continue delivering outsized rate hikes. AUD/USD Technical AUD/USD is putting pressure on support at 0.6433. The next support line is 0.6329 There is resistance at 0.6503 and 0.6607 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. RBA underwhelms with modest rate hike - MarketPulseMarketPulse

Stock markets recovered earlier losses on Monday and are adding to that in early trade on Tuesday, with Asia also posting strong gains. The turnaround in risk appetite appears to have been driven by another deterioration in PMI surveys as traders speculate that such weakness could be a precursor to slower monetary tightening. If that sounds like straw clutching, it’s probably because it is but then, equity markets have had a rough ride of late and that can’t last forever. The deceleration begins The RBA became the first major central bank to slow the pace of tightening overnight, hiking rates by only 25 basis points against expectations of another 50. After four consecutive super-sized hikes, the RBA determined it can start to ease off the brake and is on course to hit its inflation target over the medium term. Of course, this had nothing to do with weak PMI surveys but it will probably assist the narrative that a global deceleration in rate hikes is underway, which could boost risk appetite further. Markets do love to set themselves up for disappointment. The jobs report on Friday could quickly put an end to that. Damage control The pound has continued its recovery this week amid reports that UK Chancellor Kwasi Kwarteng will shortly unveil his second u-turn in 24 hours. Despite repeatedly insisting otherwise, Kwarteng is poised to announce that the government’s debt-cutting plan will be brought forward – perhaps later this month – alongside OBR forecasts in a bid to calm the markets. While the damage to the pound can be undone, the needless reputational harm the government has suffered won’t be as easily repaired. The Chancellor has shown a flagrant disregard for the markets – and the general public for that matter – and that will take time to undo. The move is a welcome first step, now he must convince everyone that his plan is credible and won’t come at a significant economic cost. ​ ​ Less enthusiasm for bitcoin The risk relief rally is extending to bitcoin but perhaps to a lesser extent, with the cryptocurrency up a little over 1%, but still shy of $20,000. The slight disconnect between bitcoin and other risk assets recently has been interesting. We’ve seen more resilience during downturns and seemingly less enthusiasm during rallies. It will be interesting to see whether this relationship holds and what that means going forward. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. An unsustainable rebound? - MarketPulseMarketPulse

The Bank of Australia raised its base rate yesterday by a modest 0.25% against a general expectation of 0.50%. As a result, the aussie lost 13 points during the day. Today, the Reserve Bank of New Zealand raised the rate by the expected 0.50%, but this does not help the kiwi grow. The daily timescale chart shows that yesterday's candle opened and closed below the level of 0.6515, respectively, the exit of the upper shadow above the level, almost to the target of 0.6565, can be taken as a false movement. Now we are waiting for the development, strengthening of the declining sentiment. The first target is 0.6439. Overcoming the first target opens the second one - 0.6385 - the nearest line of the green price channel. The price settled above both indicator lines on the H4 chart. This circumstance makes it difficult for the bears to act, although the Marlin Oscillator is trying - it is falling to the zero line and is clearly set to overcome it. Full consolidation of the downward trend, however, will occur after the price goes under 0.6439.   Relevance up to 04:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323435

Summary:  Oil rallies for the second day with OPEC+ considering an output cut as much as 2 million barrels a day, which is more than anticipated. US stocks rallied for the second day, moving off their lows on softer than expected labor market data that supported the notion of central bank peak hawkishness. The Reserve Bank of Australia hikes less than expected, and the Reserve Bank of New Zealand meeting ahead today. Also watch for the US ISM services print later, pivotal for Fed pivot expectations that are gaining momentum prematurely. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rally for the second day, moving off lows US stocks rallied for the second day, rebounding from their deeply oversold levels with the S&P500 seeing its best two-day surge since April 2020. The S&P500 ended up almost 3.1% higher on Wednesday, the Nasdaq 100 up 3.1%. Retail favorite, Tesla (TSLA) shares revved up 2.9% after Cathie Wood scooped up 132,000 more shares in the electric vehicle giant. Tesla was among the biggest contributors to the S&P500’s gains, along with Amazon and Microsoft. For a detailed discussion of Tesla’s challenges ahead, please refer to Peter Garnry’s excellent article here. The Energy sector was the best performer in the S&P 500, gaining 4.3%, followed by Financials which were up 3.8%. Only seven stocks in the S&P500 closed in the red. However, the news of the day was that Twitter’s takeover by Musk is back on. On top of that, softer US economic data out also boosted sentiment, with the market thinking the Fed might not be as fierce with rate hikes later this month. US job openings sank to a 14-month low, following the day prior weaker than expected manufacturing data. So, perhaps a short-squeeze is fueling the rally here. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) declined modestly on the front end Treasury yields fell first on a dovish hike (25bps vs the 50bps expected) from the Reserve Bank of Australia during Asian hours and then on the biggest decline of the JOLTS job opening (10,053K vs prior 11,239K).  10-year yields made an intraday low at 3.56% before paring it and settled little changed at 3.63%.  The curve bull steepened with the front-end 2 to 5-year fell 2-3bps in yield and the 30-year yield edging up 1bp.  Australia’s ASX200 (ASXSP200.1) rallied above 6,700, snapping its downtrend The ASX200 charged 3.75% yesterday (including the 1.2% rise after the RBA’s pivoted to going softer on rate hikes) which took the market to its highest level since September 23 (just shy of 6,700, closing at 6,699). Today the market opened 0.8% up in the first 10 minutes of trading, with the futures implying the market could rise 1.6% on Thursday to 6,803. If the market can hold above 6,700 it means the market will effectively have broken its downtrend and is staging a comeback. This notion was supported by our technical analyst. For more read on here. EURUSD touches parity again Lower US yields and a softer US dollar is turning things around in the FX space, although pricing out the Fed rate hikes from 2023 appears to be premature. Some of this could also be the positioning ahead of key US NFP data due this week. EUR made a strong recovery on the back of a weaker dollar, as it rose from lows of 0.9800 to touch parity. Commentary from the ECB’s Villeroy also helped, as he said that interest rates will be raised as much as necessary to lower core inflation and called for rates to go to neutral by year-end without hesitation. Meanwhile, President Lagarde reiterated her view that inflation was undesirably high, and it is difficult to say whether or not it had peaked. Crude oil (CLX2 & LCOX2) higher on OPEC cut expectations Crude oil prices rose further amid speculation that OPEC is considering an even larger cut to production than first thought. The group is said to be considering a cut of up to 2mb/d, according to media reports. It is also being reported that the cuts will be made from current production levels and not the quotas as most members are already producing below their quota. That, if true, will likely tighten the market especially as European sanctions will kick in from December and US is also pausing the release from its strategic reserves. This tightness could be exacerbated by a rebound in Chinese demand if it can contain outbreaks of COVID-19. WTI futures rose above $86/barrel while brent crossed the key $90-mark. A significant draw was also reported in API inventories, with crude stocks down 1.77mn. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong is set to have some catch-up to do with the 5.7% gain in the S&P 500 and 6.1% rise in the NASDAQ Golden Dragon China Index when it returns from a public holiday today.  The stock markets in Shanghai and Shenzhen remain closed for the rest of the week for public holidays.     What to consider?   US JOLTs signalling the tightness in the labor market may be moderating US JOLTs data was out with a weaker than expected number. The number of job openings in the U.S. declined to 10.1 million in August, the lowest since June 2021, and below expectations of 10.8 million. The job openings rate was down to 6.2% from 6.9% in July, and puts the focus on the ADP data due today in the run upto the NFP data on Friday. OPEC+ meeting to bring production cuts There have been some reports that OPEC members have started talking about cuts with Russia proposing a 1 mln barrels per day cut, a reduction towards which they are unlikely to contribute much as they are already producing below their quota. At its last meeting on September 5, the group agreed a token reduction of 100,000 barrels a day for October, despite calls from consuming nations to help tame rampant inflation by keeping the taps open. With gasoline prices retreating in the US, some of that external pressure may now be easing, and that further raises the prospects of some price-supportive action. FT also reported the production cuts will be from current production levels, not from the quota's which many producers do not meet - emphasising the impact of the production cut. The credit market showed signs of calming down Over the past two days, the sharp rise in investment credit spreads has tentatively reserved, showing some sign of relief in the investment grade credit market.  The Markit CDX North America Investment Grade Index (CDX IG39), which represents an equal-weighted average of credit default swap spreads of 125 North American investment grade corporate, fell more than 6bps on Tuesday to 98bps, a decline of nearly 16bps from its intraday high of 114 last week. The Reserve Bank of New Zealand meeting ahead The RBNZ will announce its latest monetary policy decision today. NZ house prices have seen one of their biggest quarterly drops on record in the three months to September. It’s worth watching the NZD against the AUD (NZDAUD) given their current account trajectories. RBA hiked less than expected, signaling peak hawkishness could be behind it. What does it mean to traders and investors? Yesterday the RBA rose rates by just 25bps (0.25%) instead of the 50bps (0.5%) expected, which took the cash rate to 2.6%. The RBA’s hiking power has been diminished as household spending is dropping, along with forward looking projections. We know it typically takes 3-months for an interest rate hike to be felt by the consumer, and the RBA alluded to this, in saying higher inflation and interest rates are putting pressure on households, with the full effects yet to be felt. The RBA referenced although consumer confidence and house prices had fallen, the central bank is still focused on slowing inflation which it sees increasing ‘over the coming months ahead’. Plus the RBA expects unemployment will continue to fall over the months ahead, before rising. This means, the RBA could slow the pace of hikes after December onwards. This implies peak hawkishness is behind us. AUDUSD fell 1% after the meeting however it since reversed those losses and trades 0.6% higher from the meeting. It’s been supported as the USD continued to roll over on expectations the Fed might not be as aggressive with rate hikes later this month. However if the Fed perhaps hikes by 0.75% the AUDUSD might revert back to a bearish stance. For investors, the RBA pivot supports a risk-on tone in equities which is why all 11 sectors rose yesterday, with tech and mining up the most. Energy markets saw the most gains as they have the most momentum amid the energy crisis. Lithium and agricultural stocks dominated the top 10 risers; with lithium stocks Sayona Mining (SYA), Lake Resources (LKE), Core Lithium (CXO), Pilbara Minerals (PLS) and Allkem (AKE), gaining 10%+ each. Musk revived his $44 billion Twitter bid send Twitter shares up 22% Billionaire Elon Musk revived his bid for the social media giant, at the original offer of $54.20 a share after spending months trying to back out of it. Shares of Twitter (TWTR) jumped almost 22% to $52.00 on the news. US ISM services will be key to watch today With chatter on Fed pivot gaining momentum out of a miss in one ISM manufacturing print, possibly also underpinned by the turmoil in the financial system, it will become more key to watch the services sector data out today. Consensus expects the number to be 56, down from 56.9, as higher interest rates and high inflation begins to eat into services spending after a solid post-pandemic rebound.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-5-oct-05102022

News about the change in the interest rate by the Bank of Australia disappointed traders, that is why AUD/USD declined and updated the yearly lows. From a technical point of view, the pair traded within a range over the past two trading weeks, the upper limit of which is 0.65300. This level was falsely broken yesterday during the European session. Considering this, as well as the three-wave pattern (ABC), where wave A represents bearish pressure, traders can enter the market by selling from current prices up to the 50% retracement level. Set stop loss at 0.65400, then exit the market on the breakdown of 0.64500 and 0.63600. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 10:00 2022-10-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323479

Summary:  With perfect hindsight, much of the recent aggravation of the USD spike was down to a troubled sterling as UK gilts markets were roiled by pension fund hedging after signals from the Truss government that fiscal prudence is a forgotten priority. With bond markets becalmed and sterling having come full circle from its level before the volatility event, we have now developed an additional narrative of a possible general central bank pivot to less tightening, driven by a couple of soft US data points and a dovish RBA. But can we get much more out of the pivot narrative here? FX Trading focus: We have neutralized the GBP wipeout and a central bank pivot narrative has partially broken out. Now what? Not much to add in today’s observations as yesterday saw an aggressive extension of trades aligning along the risk sentiment axis, particularly the US dollar lower, if mostly only against the European currencies. The lack of more pronounced breadth in the weakening greenback may be down to long US yields stabilizing ahead of the key 3.50% area in 10-year US treasury yield, but also down to the fact that the UK was at the center of the recent aggravated ramp up in the USD as treasury yields spiked. As well, positive news for Ukraine and softer natural gas prices in Europe are likely additional drivers for improved European FX sentiment. With GBPUSD trading back almost as high as 1.1500 this morning, the approximate kick-off area from where the UK gilt market melted down and took sterling with it starting after the September 22 Bank of England meeting, we now have to ask ourselves if there is more sustenance for a continuation of the move. Barring actual signals of a pivot from the Fed and/or energy and power prices in Europe dropping significantly further due to an actual visibility emerging on the longer term shape of Russian supplies, the answer is most likely “no”. Of course, a big miss in the September US ISM Services survey today (expected at 56.0 vs. 56.9 in August) and/or a bad miss on payrolls and earnings in the Friday US September jobs report could drive an extension of the “central bank pivot” narrative in the near term, with the US dollar on its back foot. But weaker global growth is no boon to risk sentiment at some point beyond the immediate relief from a cessation in the seemingly inexorable rise in yields. Chart: EURUSDParity in EURUSD an obvious psychological resistance line and was also the big, sticky round level that the exchange rate hugged for several weeks before the excursion to below 0.9600 that was mostly about the contagion (into a strong USD) from the sterling meltdown that was a traumatic liquidity event in the wake of the Bank of England meeting and the subsequent, deficits-be-damned moves by UK Chancellor Kwarteng. We are more or less back to square one, with the added narrative twist of a central bank pivot as noted above. Uniformly weak US data through Friday could drive an extension higher, but even a move to 1.0200+ may simply represent a larger scale consolidation within the massive downtrend, even if the downward channel denoted on the chart would be disrupted. A strong batch of US data and significant pull back higher in US yields would likely cap the action for now, although it will take some considerable work to get the downtrend back on track after this sharp back-up. The RBNZ hiked rates overnight by 50 basis points, as expected, and it was the fifth consecutive hike of that size from the Bank. Given the less dovish guidance from the RBNZ in its statement relative to the RBA’s more modest hike and guidance, the AUDNZD dropped quickly to sub-1.1250 levels overnight before rebounding considerably – an underwhelming performance. That 1.1250 area, with a bit of slippage, is arguably the bull-bear line for that pair, with commodity prices, particularly energy, a possible determinant of whether the pair reprices back higher toward 1.2000 as I have argued might be possible due to the relative change in fortunes for the two countries’ current accounts over the last couple of years. A more significant assessment of policy awaits at the final RBNZ meeting of the year on November 23 (expectations still solid for a 50 bps move then). EURCHF reached important resistance around 0.9800 after the thaw in risk sentiment and rumors of a troubled major Swiss bank helped Swiss government bond yields to drop far further than EU counterparts. Swiss yields have rebounded a bit this morning – hard to believe in a major reversal here unless we see a major further improvement in the European economic outlook. Table: FX Board of G10 and CNH trend evolution and strength. The USD uptrend is limping, if not yet reversed meaningfully in a broad sense. Note the weak commodity dollars -interesting to see if OPEC+ can pull off the threatened production cuts after its meeting today. Sterling has seen a mind-bending reversal over the last many days – maybe peak amplitude on that account for a while? Table: FX Board Trend Scoreboard for individual pairs.AUDNZD up-trend status in play here after the RBNZ reaction in favour of the kiwi has not stuck well. Note EURUSD trying to turn to a positive trend reading today – the ISM Services and ADP payrolls data the likely deciders there. Upcoming Economic Calendar Highlights Poland Central Bank Rate Announcement 1215 – US Sep. ADP Employment Change 1230 – US Aug. Trade Balance 1230 – Canada Aug. Building Permits 1230 – Canada Aug. International Merchandise Trade 1400 – US Sep. ISM Services 2000 – US Fed’s Bostic (non-voter) to speak 0030 – Australia Aug. Trade Balance Source: https://www.home.saxo/content/articles/forex/fx-update-we-have-neutralized-the-gbp-wipeout-now-what-05102022

A seven-day long consolidation in a 0.6390-0.6547 range is likely to explode sooner. The RSI (14) has shifted its range to the bullish territory of 60.00-80.00. The AUD/USD pair is advancing firmly right from the initial tick amid an improvement in the risk appetite of the market participants. The asset has reached near Tuesday’s high at around 0.6547 and is expected to overstep the same with sheer confidence as commodity-linked currencies have hogged the limelight. A seven-day long consolidation on an hourly scale after reporting a fresh two-year low at 0.6363 is indicating a bullish reversal ahead. The asset is displaying the balanced auction profile in a 0.6390-0.6547 range. The chartered region will be marked as the most auctioned region forward. The aussie bulls have driven the asset above the 50-and 200-period Exponential Moving Averages (EMAs) at 0.6492 and 0.6508, which adds to the upside filters. A formation of a golden cross, which is represented by the bullish cross of 50-and 200-EMAs, will strengthen the aussie bulls further. Meanwhile, the Relative Strength Index (RSI) (14) has shifted its oscillation range from 40.00-60.00 to 60.00-80.00, which indicates that upside momentum has been triggered. Going forward, a break above Tuesday’s high at 0.6547 will drive the asset towards and September 22 high at 0.6670 and September 18 high at 0.6734. Alternatively, a drop below the two-year low at 0.6363 will drag the asset towards the 16 April 2020 low at 0.6264, followed by the round-level support at 0.6100. AUD/USD hourly chart

Although the employment report from ADP showed that the number of new jobs in the US is increasing, indicating the strength of the economy, stock markets declined as this could mean that the Fed may not ease the pace of interest rate hikes in the coming months. Earlier, many have considered the idea that the state of the labor market could change the stance of the central bank regarding monetary policy. They believe that if the number of new jobs fall steadily, the Fed will see that the economy has slowed down enough for them to start turning down the pace of interest rate increases. But yesterday's data showed non-farm payrolls climbing to 208,000 in September, up from an estimate of 200,000 and August figure of 185,000. Of course, the values from ADP are not official and the market will really act after the release of data from the US Department of Labor tomorrow. But the growth in the number of new jobs will be perceived by the market as a signal that the Fed may reduce the pace of rate growth. In terms of today's market dynamics, there may be a consolidation until the employment data tomorrow show whether the US labor market is still strong or has already begun to experience problems amid high interest rates . Forecasts for today: EUR/USD The pair has not yet overcome the 1.0000 mark. It is likely that before the release of employment data in the US, there will be a consolidation around 0.9830-1.0000. AUD/USD The pair is trading above 0.6520. It may rise to 0.6580 if positive sentiment prevails on markets today.   Relevance up to 08:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323555

AUD/USD started the week with huge gains, but has been in calm waters since then. In the European session, the Australian dollar is trading at 0.6478, up 0.17%. Retail sales points to slowing economy The RBA’s sharp tightening is having an effect on economic growth. There was no surprise as retail sales slowed to 0.6% in August, down sharply from 1.6% in July and matching the consensus. The fall in retail sales can be seen as a vindication for the RBA, which surprised the markets with a modest hike of 0.25% this week. Most analysts had expected one more 0.50% increase before the RBA started to ease up on rates. The central bank was late to join the global dance to raise rates, as Governor Lowe insisted that inflation was transient before he finally started to raise rates. Inflation has not let up, running at 6.1%. The RBA statement acknowledged that inflation has not yet peaked and is expected to rise to 7.75% in 2002 before dropping to 4.0% in 2023. Given that the RBA’s number one priority is lowering inflation, the 0.25% hike caught the markets off guard. When it comes to loosening policy, the RBA has taken the lead, with an eye to guide the economy to a soft landing and avoid a recession. Lowe again is marching to his own tune, as the Federal Reserve is expected to deliver at least one more oversized hike of 0.75%. This will widen the US/Australia rate differential and likely put strong pressure on the Australian dollar, which had a disastrous September, declining 6.4%. The markets are keeping a close eye on US nonfarm payrolls, which will be released on Friday. The ADP employment report showed a slight improvement at 208,000, up from 185,000 (200,000 est.) ADP is using a new methodology to calculate its readings, but it’s too early to tell if this will improve its reliability in forecasting the official nonfarm payrolls report. The markets are bracing for a decline in NFP to 250,000, down from 315,000 prior. AUD/USD Technical AUD/USD tested resistance at 0.6503 in the Asian session. The next resistance line is 0.6607 There is support at 0.6433 and 0.6329 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Yesterday, the Australian dollar showed a strong fall from the target level of 0.6515 to the target level of 0.6385. The lower shadow did not reach the descending line of the price channel by several points, but taking into account fluctuations, errors in the chart, we can accept the target as worked out, since after it the price rebounded upwards. Also, the signal line of the Marlin Oscillator reacted to the price surge with a slight upward reversal. Data on employment in the US will be released today. The forecast for new jobs in the non-agricultural sector is 250,000, which is a very good indicator with an unemployment rate of 3.7%. As a result, we are waiting for the price to overcome the support of 0.6385, then the consistent development of the supports of the price channel 0.6360 and 0.6310. On a four-hour timescale, the price consolidated under both indicator lines, under the target level of 0.6439. The Marlin Oscillator is already firmly established in the downtrend area.       Relevance up to 04:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323666

Summary:  S&P 500 plunged 2.8% following a decline of U.S. unemployment to 3.5% in September, signing a tight labor market and providing cover for the Fed to front-load larger rate hikes. U.S. treasury yields and the dollar continued to charge higher. The AUD dollar fell to a 2.5-year low. WTI crude jumped 5.4% as the OPEC+ production quota cut continued to linger. The U.S. tightened its restrictions on the export of semiconductor technology to China. Putin called an emergency meeting with his Security Council. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) retreated on a hot labour market After a stronger-than-expected payroll report and a decline in the unemployment rate to 3.5%, U.S. stocks slid throughout the session and managed only to bounce slightly from the lows toward the market close.  S&P 500 plunged 2.8%, with all 11 sectors of the benchmark declining.  The information technology and consumer discretionary sectors fell the most, down 4.1% and 3.5% respectively. On the back of a 5.4% jump in crude oil prices during the day, the energy sector was the best performer, losing only 0.7%. Nasdaq 100 tumbled 3.9%.  Advanced Micro Devices (AMD:xnas) fell the most among the NDX constituents, down 13.9%, following slashing over USD1 billion from its revenue guidance for Q3. Close behind was another semiconductor name, Marvel Technology, falling 11.7%. Intel (INTC:xnas) and NVIDIA (NVDA:xnas) plunged 5.4% and 8% respectively.  The Biden administration issued new rules to restrict American companies from exporting advanced chip equipment to China.  CVS Health (CVS:xnys) plunged 10.5% after being downgraded to a worse-than-average quality rating from Medicare Advantage’s Star Ratings and on its plan to acquire Cano Health (CANO:xnys).  Trading desk talks suggested large short-selling initiated in financials while short-covering was prevailing in the energy space. This week could be another pivotal moment for markets with the U.S. earnings season kicking off, the September FOMC minutes, and the US CPI. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) climbed from 5bps to 7bps across the curve on the fall in the unemployment rate to 3.5% U.S. treasuries sold off on the larger-than-expected +263K print of the non-farm payrolls and the 3.5% unemployment rate (vs 3.7% expected), with the belly of the curve being hit most.  5-year yields jumped 7bps to 4.14%, while 2-year yields climbed 5bps to 4.31% and 10-year yields moved up 6pbs to 3.88%.  The money market curve now prices in a 75bp hike almost a done deal for the November FOMC. The cash treasury bond market is closed on Monday for Columbus Day (but U.S. stock exchanges are open).  Hong Kong’s Hang Seng (HSIU2) fell in light volume with China property and EV stocks underperforming Hang Seng Index sank for the second day in a row after the sharp rally on Wednesday, falling 1.5%. Chinese EV stocks tanked, with Li Auto (02015:xhkg) tumbling 14.8%, Nio (09866:xhkg) plunging 10.5%, and XPeng (09868:xhkg) moving down 6%. The collapse of EV stock prices contributed significantly to the 3.3% decline of the Hang Sent Tech Index (HSTECH.I).  Investors were concerned about the severe competition in the EV industry with new entrants to the market and rising battery costs.  China developer names plunged from 2% to 9% across the board as sentiment was clouded by CIFI’s (00884:xhkg) discussion with banks about posting an interest payment and a 2-notch downgrade to B3 (long-term rating) and Caa1 (senior unsecured debts) by Moody’s. CIFI and Longfor (00960:xhkg), each tumbled over 8%.  Turnover in the Stock Exchange of Hong Kong hit a new 2022 low at HKD57 billion. Shanghai and Shenzhen exchanges were closed for the National Day holiday the whole last week and are returning today.   Australia’s ASX200 (ASXSP200.1) tipped to open the week lower, while focus remains on commodities The ASX200 charged 4.5% last week outperforming global markets, with the rally being supported by commodity prices moving higher, including iron ore. On Monday the Futures indicate the market could fall 0.9% following Wall Street. Trading screens will likely be in the green (black) in the commodity sector, after the oil price rallied 4.7% to $92.62. A focus will also be on iron ore companies as after China’s markets reopen after a weeklong holiday, and China is the largest buyer of iron ore. It’s also worth noting the US listed BHP closed just 0.8% lower on Friday, outperforming US equites. Other stocks to watch might include; Karoon Energy (KAR), after Brazil agreed to lower the royalty rate on the company’s Bauna project. Core Lithium (CXO) and NRW Holdings (NWH) will also be in focus after NRW’s Primero won a contract for Core Lithium’s plant. And Tabcorp (TAH) will also be in view for traders, after investing $33 million for a 20% equity stake in Dabble Sports.  The U.S. dollar climbed modestly on higher bond yields Higher bond yields lifted the dollar, seeing DXY 0.4% higher to 112.795.  USDJPY hovered above 145 but is yet to make a decisive upward move again to test the resolve of Japan’s Ministry of Finance.  EURUSD weakened -.5% to 0.9744 and GBPUSD declined 0.7% to 1.1089. The Australian dollar (AUDUSD) fell to a 2.5-year low, as the Fed gained more ammunition to hike   The AUD/USD fell 0.7% to 0.6361, which is its lowest level since April 2020. This follows the US jobs report coming out on Friday, which gives the Fed more ammunition to rise rates. Keep in mind, a currency generally appreciates when its central bank rises rates. This is in deeded one of the key reasons why the USD is marching up. And when you compare the Fed’s hawkishness to the RBA’s fresh dovish tone, it makes this currency pair an interesting one to watch, particularly with this week’s US economic data and Fed speeches on tap. On the weekly chart it could worth watching the support level at perhaps 0.61670.   Crude oil (CLX2 & LCOX2) surged more than 5% The front-month contract of WTI crude gained 5.4% to USD92.64 despite a modestly higher U.S. dollar. The production quota cut last Wednesday continued to provide support to crude prices.  Since OPEC+ announced the production quota cut, WTI crude oil prices have risen 7.7%.  While many news headlines say it is a production cut of 2 million barrels, we want to clarify here that the 2 million barrels number is referring to the quota, not production.  However, 15 out of the 23 oil-producing countries involved produced below their current levels of allocated quotas in September 2022. 13 of these oil-producing countries produced less oil in the last month than the reduced quotas to be implemented in November.  In other words, the reduced quotas will cut oil production in 10 countries if they adhere to cap the quota.  Having said that, the cut will still be about 1.3 million barrels a day effectively and it is still substantial, from Saudi Arabia (552,000 barrels), UAE (171,000 barrels), Iran (150,000 barrels), Kuwait (144,000 barrels), Libya (100,000 barrels), Iraq (69,000 barrels), Algeria (43,000 barrels), Gabon (28,000 barrels), South Sudan (21,000 barrels, and Oman (21,000 barrels).   What to consider?   US Unemployment Rate fell 0.2 percentage points to 3.5% Nonfarm payroll growth lowered to +263K in September, down from August’s +315K but slightly above the median forecast of +255K of Bloomberg’s survey.  Major areas of strength in the establishment report (i.e. payrolls) were healthcare, leisure, and hospitality while trade and transportation employment was weak. The market moving part in the cluster of data was the 0.2pp decline in the unemployment rate to 3.5% in September from 3.7% in August which the market had expected unchanged at 3.7%.  Part of the fall in the unemployment rate was attributed to a 0.1pp decline in the labor force participation rate to 62.3% from 62.4%. Investors and trades are concerned about the inability of the participation rate to sustain its rally toward 63 or higher so as to dampen upward pressure on wages. Average hourly earnings came in as expected at +0.3% M/M and +5% Y/Y.  FedEx’s ground delivery unit expects a slower volume ahead FedEx Ground, the ground delivery unit of FedEx (FDX:xnys) said in a statement that they are expecting “weakening macroeconomic conditions are causing volume softness. The unit is working with its customers on the latter’s projected shipping needs and making adjustments.  The U.S. tightened restrictions on exporting semiconductor equipment, components, and high-end chips to China The U.S. Department of Commerce rolled out new regulations last Friday to prohibit American companies from exporting to Chinese companies advanced semiconductor equipment and components that can be used to make equipment without first applying for a license from the Department of Commerce effective immediately. The Department of Commerce’s new rules bans U.S. persons from providing support to the development or production of semiconductors at Chinese semiconductor facilities without a license from the Department of Commerce.  The Department of Commerce also tightened the Foreign Direct Product Rule to restrict China from obtaining advanced microchips that can be used in supercomputers and artificial intelligence applications from American companies as well as foreign companies that rely on American technologies. Tourism data was weak for the National Day Golden Week holiday in China According to data from the Ministry of Culture and Tourism, domestic trips and revenues for the period from Oct 1 to 7 were 18.2% and 26.2% lower than those in the same period last year respectively.  According to estimates from the Ministry of Transport, the aggregate number of passenger trips via roads, railways, waterways and aviation from Oct 1 to 7 was 255.5 million trips or 36.5 million trips per day on average, which was 36.4% lower than that in 2021. Putin is chairing a meeting with his Security Council on Monday Russian President Putin is going to chair a meeting with the permanent members of the Russian Security Council today. It was apparently in response to the explosion two days ago that seriously damaged the Kerch bridge which links Crimea with Russia.   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-10-oct-10102022

On Monday, the Australian dollar decisively overcame the supports of the embedded price channel lines of the weekly timeframe (green lines). Now the price is heading to the next target - to the underlying line of the price channel around the level of 0.6205. The Marlin Oscillator is starting to hint at convergence with the price, but so far this is just an indication to enter short positions with reduced volumes. Weak data on Australia came out today. The Westpac consumer sentiment index for October fell by 0.9%, the NAB business confidence index for September fell from 10 to 5 points. On the four-hour chart, the price settled below the level of 0.6310, the Marlin Oscillator is not turning up yet, it only consolidated on the way to the oversold zone, which indicates its intention to go deeper into this area.   Relevance up to 04:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323917

AUD/USD continues to lose ground and can’t find its footing. The Aussie started the week on the wrong foot, with a decline of 1.0% on Monday. In today’s European session, AUD/USD is trading at 0.6266 down 0.52%. Earlier the day, the Australian dollar fell to 0.6247, its lowest level since April 2020. Weak PMI, confidence data weighs on Aussie Australia has posted weak numbers this week, adding to the downward pressure on the ailing Australian dollar. The Services PMI fell into contraction territory with a reading of 48.0 in September, down from 53.3 in August, as the uncertain economic outlook is weighing on business activity. Business confidence levels are down, with NAB business confidence slowing to 5 in September, down from 10 in August. Westpac Consumer Sentiment indicated that consumers are also in a sour mood, with a reading of -0.9% in September after a gain of 3.9% in August, which was the sole gain over the past 11 months. Risk appetite has been dampened by the escalating crisis in the Ukraine war, with Russia annexing parts of occupied Ukraine and firing missiles at civilian targets. As well, the energy crisis is looming over Western Europe, just weeks ahead of winter. This is weighing on the risk-sensitive Australian dollar. In the US, inflation releases have taken on added significance, as the Federal Reserve has designated soaring inflation as public enemy number one. The US releases PPI data on Wednesday and CPI a day later. Headline inflation has dropped over the past two months, but remains at 8.3%. Unless headline and core inflation both surprise with much lower readings than expected, I don’t anticipate any change in course from the Fed. If inflation underperforms, the US dollar could lose ground. Conversely, a higher-than-expected inflation report would be bullish for the US dollar. . AUD/USD Technical AUD/USD has resistance at 0.6299 and 0.6424 There is support at 0.6203 and 0.6106 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds

The Australian dollar got into a double situation. On the one hand, the price is trying to break above the resistance of 0.6300 and the descending price channel line (green), which may lead to a subsequent increase to 0.6360, and pushes the price to such a scenario of convergence with the Marlin Oscillator, on the other hand, the price is held in a downward direction as a price channel, and the oscillator channel. The bears have a stronger vector. The 0.6197 target is the nearest price channel line. Bears on the aussie are also helped by raw materials, which have been falling in price for the main groups for three days. The price is staying below the 0.6300 level on the four-hour chart. The Marlin Oscillator is not trying to move into the positive area. Above the level of 0.6300, the price is waiting for the resistance of the MACD line, so without good reason the price is unlikely to attack this level.   Relevance up to 04:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324161

The Financial Times (FT) is reporting on Thursday, half of Shanghai districts will be under lockdown this weekend to test millions of residents after signs emerged of renewed community transmission of coronavirus. This comes after China’s financial hub reported 11 new infections on Thursday. The strict measures will affect eight of Shanghai’s 16 districts, including Pudong, one of the worst-hit areas at the start of the lockdown, the FT said. Meanwhile, Beijing is also on high alert after a cluster of cases was detected in Chaoyang on Thursday. Market reaction The discouraging news from China seems to have little to no impact on risk sentiment so far, as the S&P 500 futures see a 0.20% gain while the AUD/USD pair is re-approaching 0.6300, at the time of writing.

AUD/USD extends bounce off 2.5-year low, grinds higher around daily top of late. Rebound from the key support joins price-positive oscillators to keep buyers hopeful. Sellers remain hopes unless the quote stays inside five-week-old bearish channel. AUD/USD dribbles around the intraday high of 0.6343 while extending the previous day’s rebound from a 30-month low. In doing so, the Aussie pair remains firmer for the second consecutive day while staying inside a bearish chart pattern, namely the descending trend channel established from September 07. The quote’s rebound from 0.6170 appears a corrective bounce from the aforementioned channel’s support, suggesting further recovery. Also favoring the pair’s upside momentum is the RSI’s gradual uplift from the nearly oversold region and the impending bull cross on the MACD. With this, the Aussie pair is all-set to challenge the 10-DMA hurdle, around 0.6375. However, the bearish channel’s upper line, close to 0.6410 at the latest, could challenge the AUD/USD buyers afterward. In a case where the prices successfully cross the 0.6410 hurdle, the odds of witnessing a run-up toward the monthly high of 0.6547 can’t be ruled out. Alternatively, pullback moves could aim for the 0.6300 threshold before highlighting the March 2020 high near 0.6215. Following that, the lower line of the channel, around 0.6150 by the press time, will be crucial for the AUD/USD bears to watch. AUD/USD: Daily chart Trend: Limited upside expected

AUD/USD struggles to preserve its modest intraday gains amid a pickup in the USD demand. A turnaround in the risk sentiment, aggressive Fed rate hike bets boost the safe-haven buck. Traders now look forward to US macroeconomic releases for some meaningful opportunities. The AUD/USD pair attracts fresh sellers in the vicinity of mid-0.6300s on Friday and surrenders its modest intraday gains to a four-day high. The pair slips below the 0.6300 mark during the first half of the European session and is now flirting with the daily low amid the emergence of some US dollar dip-buying. The latest optimistic move in the equity markets witnessed since the US session on Thursday fizzles out rather quickly amid worries about a deeper global economic downturn. The anti-risk flow helps revive demand for the safe-haven greenback and exerts some downward pressure on the AUD/USD pair. Apart from this, the prospects for a more aggressive policy tightening by the Fed favour the USD bulls. The US Bureau of Labor Statistics reported that the core inflation (excluding food and energy prices) registered the biggest gain since August 1982. The hotter CPI report reinforces bets for the fourth consecutive 75bps Fed rate hike in November. This, along with the potential economic fallout from fresh COVID-related lockdowns in China, validates the near-term negative outlook for the AUD/USD pair. That said, technical indicators on short-term charts are hovering around the oversold territory and warrant some caution for bearish traders. Nevertheless, the AUD/USD pair remains on track to register losses for the fifth successive week. Market participants now look forward to the release of the US monthly Retail Sales figures, due later during the early North American session, for a fresh impetus. Friday's US economic docket also highlights the Prelim Michigan Consumer Sentiment and Inflation Expectations Index. This, along with the US bond yields and speeches by influential FOMC members, will drive the USD demand and provide a fresh impetus to the AUD/USD pair. Traders will further take cues from the broader market risk sentiment to grab short-term opportunities on the last day of the week.

USD/CAD Current spot: 1.3722 • We haven’t changed our view that the loonie should emerge as a key outperformer once sentiment stabilises, thanks to low exposure to Europe and China, the positive impact from high energy prices and a hawkish Bank of Canada (which recently reiterated its commitment to fighting inflation despite economic pain). • Still, CAD’s high beta and USD strength will keep USD/CAD in the 1.35/1.40 region into the new year, in our view, regardless of the BoC matching the Fed’s tightening. • The recent output cuts by OPEC+ are surely a good sign for oilsensitive currencies, and may somewhat limit the downside risks for CAD even if risk assets remain weak. AUD/USD Current spot: 0.6323 • We remain bearish on AUD/USD into year-end, as risk sentiment fragility, China’s economic (and currency) woes and a strong USD all point to continuous weakness in the pair. • We currently forecast a bottom of about 0.60-0.61 around yearend before a rebound that should accelerate in the second half of 2023. A break below 0.60 this year is entirely possible though. • The Reserve Bank of Australia surprised on the dovish side in October as it delivered a “small” 25bp hike. Indeed, policymakers in Australia have greater flexibility given policy meetings are scheduled for each month; but our base case is that 25bp increases will become the norm. The FX implications, for now, should remain quite secondary. NZD/USD Current spot: 0.5603 • The Reserve Bank of New Zealand has steered away from any dovish signals as it hiked by another 50bp in October and signalled more tightening is on the way. Another 50bp increase is largely expected at the November meeting. • As with the Australian dollar – and many other developed currencies – the role of monetary policy remains secondary compared to global risk dynamics. • NZD/USD is looking at the 0.50 2009 lows as the next key support: that would be a 12% drop from the current levels and seems too stretched in our view. However, a move to the 0.52-0.53 area cannot be excluded should risk assets fall further. This article is a part of a report by ING Economics available here. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The Australian dollar confuses market participants as soon as it can. On Friday, the movement range of the aussie amounted to more than 150 points, having reached three lines of the price channel drawn on the daily chart at once. The Marlin Oscillator no longer has freedom of movement - it will either break above the upper boundary of its own channel under the influence of convergence with the price (pink line), or turn down from the upper boundary of the channel, breaking the convergence. In this case, the target of the downward movement will be the underlying line of the price channel around the level of 0.6130. The bulls' victory may be marked by reaching the target level of 0.6360, which they failed to do on Friday. The price corrects slightly from the 0.6195 support on the 4-hour chart. What this means is not entirely clear, but the Marlin Oscillator has returned to the negative area and is pulling the price down. Overcoming the price of support 0.6195 will open the 0.6130 target. Based on the combination of technical factors, the probability of a descending option is slightly higher than that of an ascending one: 55 versus 45.   Relevance up to 04:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324421

GBP/USD jumped on Monday amid news from the UK that the economic course presented by Prime Minister Liz Truss would be stopped. This was after Finance Minister Kwasi Kwarteng announced his resignation last Friday, as well as on the inability of Truss to convince markets that the decision to significantly ease fiscal policy will have a beneficial effect on the local economy. Pound got off to a solid start after it was revealed that the new finance minister, John Hunt, will present excerpts from his medium-term budget plan this afternoon. It seems that the market is hoping for some kind of compromise between the need to save the economy with regular infusions of unsecured money, and the need to take a tough course of savings. What is currently observed in the market can be explained by the closing of a large number of short positions in pound. And with the uncertainty factor looming ahead, as well as the significant deterioration in the economic situation in the UK, it is highly likely that prices will continue to collapse, especially if new measures from the new finance minister are unlikely to provide significant and long-term support for the local currency. Dollar also has a huge advantage being a strong safe-haven currency. Summing up, it is likely that the growth of pound will be limited. Forecasts for today: GBPUSD The pair is highly likely to be volatile today and would trade in the range of 1.1060-1.1370. AUD/USD The pair is also consolidating in the range of 0.6200-0.6350. But in the future, it will exit this range and go down to the level of 0.6150.   Relevance up to 08:00 2022-10-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324437

  As of writing, AUD/USD is trading near 0.6250, just below the first notable resistance at 0.6255 (200 EMA on the 15-minute chart). Given the strong bearish momentum of the overall downward trend in AUD/USD, we can expect a rebound and a resumption of decline already near this resistance level.     If it is broken, then the next point of the upward correction will be the level of 0.6325 (through it passes the resistance level in the form of a 200-period moving average on the 1-hour chart). But even after its theoretically possible breakdown, the corrective growth of AUD/USD will be limited, at least, by the important resistance levels of 0.6545, 0.6600, 0.6620 (50 EMA on the daily chart). In the main scenario, we expect a rebound from the current levels and a resumption of the decline. More conservative AUD/USD sellers will probably decide to wait for the breakdown of the local support levels of 0.6200, 0.6170.     Support levels: 0.6200, 0.6170, 0.5975, 0.5665, 0.5510 Resistance levels: 0.6255, 0.6325, 0.6455, 0.6500, 0.6545, 0.6620, 0.6685 Trading Tips Sell Stop 0.6220. Sell Limit 0.6320. Stop-Loss 0.6355. Take-Profit 0.6200, 0.6170, 0.5975, 0.5665, 0.5510 Buy Stop 0.6355. Stop-Loss 0.6290. Take-Profit 0.6400, 0.6455, 0.6500, 0.6545, 0.6620, 0.6685   Relevance up to 12:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324495

Here is what you need to know on Tuesday, October 18: The US dollar resumes its bearish momentum on Tuesday, having lost the recovery momentum in the Asian session, as risk flows extend into the second straight day following the UK's dramatic U-turn over the tax-slashing mini-budget. The US S&P 500 futures, the risk barometer, is gaining roughly 1.70% so far while the Asian indices rally 1.20% to 1.80%, led by the rebound in the Chinese stocks. In early dealing, China’s stocks turned south after the country’s junk dollar bonds dropped to a record low, as a property market crisis sparked by a crackdown on excessive borrowing. Meanwhile, Chinese traders digested comments from US Secretary of State Antony Blinken. The US official said on Monday, China has made a decision to seize Taiwan on a “much faster timeline” than previously thought. Across the fx board, the Kiwi dollar emerges as the strongest heading into the European open, followed by its Antipodean partner, the aussie. Meanwhile, the yen pulled away from 32-year highs above 149.05 against the US dollar, dragged lower by weaker Treasury yields and Japanese verbal intervention. Top Japanese officials continued their jawboning, reiterating that they are ready to take necessary steps to avoid undesirable, as they watch the FX price action with a sense of urgency. USD/JPY was last seen trading around 148.85, consolidating the upside before the next push higher. NZD/USD surges over 1% to challenge 0.5700, as hotter New Zealand’s Q3 Consumer Price Index (CPI) ramped up bigger RBNZ rate hike expectations. NZ inflation rose by 2.2% QoQ in the third quarter, beating expectations of a 1.6% increase. Meanwhile, the annualized inflation eased from a 32-year high of 7.3% to 7.2%, although outpaced expectations of +6.6%. Hawkish comments from RBA Assistant Governor Michele Bullock and RBA minutes underpin the sentiment around the AUD/USD pair, as they suggest the need for more rate increases in the coming months. EUR/USD also capitalized on retreating Treasury yields and a renewed broad-based US dollar selling, having recaptured the 0.9850 barrier. Although bulls remain cautious ahead of the German and Eurozone ZEW sentiment surveys. Germany’s Economy Minister Robert Habeck said on Monday that “with fiscal policy in place, they can avoid deep recession in Europe without fuelling inflation.” GBP/USD is fading an uptick above 1.1400, as investors assess the Financial Times (FT) report that stated the Bank of England (BOE) is set to delay quantitative tightening (QT) worth £838bn until bond markets calm. The report comes after the new UK Chancellor Jeremy Hunt ditched almost all of the mini-budget announced by PM Liz Truss on September 23. The gains in cable appear short-lived, as PM Truss braces for political challenges, with Tory backbenchers preparing to oust her. Gold is holding its recovery momentum above the $1,650 barrier but is likely to remain in a defined range until buyers reclaim the critical $1,670 hurdle. The softer dollar keeps lending support to the metal. Bitcoin price is gradually pushing higher while above $19,500 but bulls stay cautious amid a wall fall of healthy resistance levels on a daily timeframe.

Summary:  Risk sentiment was supported by more U-turns in UK fiscal policy and strong earnings from Bank of America supporting the US banks. Equities rallied and the USD declined, but the Japanese yen failed to ride on the weaker USD and continued to test the authorities’ patience on intervention. Higher NZ CPI boosted bets for RBNZ rate hikes, and the less hawkish RBA meeting minutes brought AUDNZD to fresh lows. EU meetings remain key ahead as the bloc attempts to finalize Russian price caps. What’s happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rally after UK-policy U-turn. So far this reporting season earnings are declining The mood was risk-on amid Monday’s rally; with the major indices charging higher with the S&P500 up 2.7%. The breadth of the rally was so strong that at one point over 99% of the companies in the S&P500 were rising, which pushed the index up away from its 200-week moving average (which it fell below last week). Meanwhile the Nasdaq 100 gained 3.5%. The rally came after the UK made $30 billion pounds worth of savings after scrapping tax cuts (see below for more). It was received well by markets and investors looking for short term relief. Bond yields fell, equities rallied and after the GBP lifted 1.6% the US dollar lost strength. But the UK is not out of the lurch with power outages likely later this year. Plus also consider, so far this US earnings season, only 38 of the S&P500 companies have reported results and earnings growth has so far declined on average by 3%. So it’s too soon to gauge if markets can sustain this rally, particularly with the Fed likely to hike rates by 75 bps later this month and next. Strong earnings from bank boosted market sentiment. Bank of America (BAC:xnys), reporting solid Q3 results with net interest income beat and a 50bp sequential improvement on CET1 capital adequacy ratio, surged 6% and was one of the most actively traded stock on the day. U.S. treasury curve (TLT:xnas, IEF:xnas, SHY:xnas) steepened Initially US treasuries traded firmer with yields declining, after taking clues from the nearly 40bps drop in long-dated U.K. gilts following the new U.K. Chancellor Hunt scrapping much of the "mini budget" tax cuts and the support for household energy bills. Some block selling in the long-end treasury curve however took 30-year yields closing 3bps cheaper and 10-year yields little changed at 4.01%. The 2-year to 5-year space finished the session richer, with yields falling around 5bps and 2-year closed at 4.44%. The market has now priced in a 5% terminal Fed fund rate in 2023 and a 100% probability for a 75bps hike in November and over 60% chance for another 75bps hike in December. Australia’s ASX200 (ASXSP200.1) lifts 1.4%; with a focus on Uranium, stocks exposed to the UK and lithium Firstly Lithium stocks are in the spotlight after Pilbara Minerals (PLS) accepted a new sales contract to ship spodumene concentrate for lithium batteries from Mid-may, at $7,100 dmt. PLS shares are up 3.1% with other lithium stocks rising including Core Lithium (CXO) up 3.7% and Sayona Mining (SYA) up 4.7%. Secondly, shares in Uranium are focus today after Germany plans to extend the life of the countries three nuclear power plants till April, as it contends with the energy crisis. The Global Uranium ETF (URA) rose 5.9% on Monday and ASX uranium stocks are following suit like Paladin (PDN) up 2%. For a deep look at the uranium/nuclear sector, covering the stocks to perhaps watch and why read our Quarterly Outlook on the Nuclear sector here. Thirdly, amid the risk-on short term relief in markets from the UK, companies with UK exposure are rallying amid the short-term sentiment shift , including the UK’s 5th biggest bank, Virgin Money (VUK) which is listed on the ASX and trades up 5.3%. Ramsay Health Care (RHC), which is a private hospital/ health care business with presence in the UK trades up almost 2% today. Ramsay's recent full-year showed UK revenue doubled to $1.2 billion. Hong Kong’s Hang Seng (HSIV2) China’s CSI300 (03188:xhkg) Stocks in Hong Kong and mainland China traded lower initially and spent the rest of the day climbing to recover all the losses, with Hang Seng Index and CSI300 finishing marginally higher. General Secretary Xi’s speech last Sunday hailed China’s “Dynamic Zero-Covid” strategy and gave no hint of shifting policy priorities toward economic growth as some investors had hoped for. Among the leading Hang Seng constituent stocks, HSBC (00005:xhkg) gained 1.5% and the Hong Kong Stock Exchange (00388:xhkg), which is reporting Q3 results on Wednesday, climbed 2.3%. Chinese banks gained, with China Merchant Bank rising 2.3% and ICBC (01389) up 1.7%.  Healthcare names gained, Hansoh Pharmaceutical (03692:xhkg) surged 13.2% and Sino Biopharm (01177:xhkg) rose 3.6%. EV stocks were among the laggards, dropping from 1% to 5%. Li Ning (02331:xhkg) tumbled over 13% at one point and finished the trading day 4.3% lower following accusations on mainland social media about the sportswear company’s latest designs resembling WWII Japanese army uniforms.  Japanese yen paying no heed to jawboning efforts The US dollar moved lower on Monday, but that was no respite for the Japanese yen. All other G10 currencies got a boost, with sterling leading the bounce against the USD with the help of dismantling of the fiscal measures by the newest Chancellor of the Exchequer Jeremy Hunt and the slide in UK yields. The only G10 currency that weakened further on Monday was the JPY, which continued to test the intervention limits of the authorities. USDJPY rose to 149.08, printing fresh 42-year highs. Bank of Japan Governor Kuroda will be appearing before the Japanese parliament from 9.50am Tokyo time, after some stern remarks in the morning saying that they “cannot tolerate excessive FX move driven by speculators”. While intervention expectations rose, the yen still did not budge until last check. NZD rose on higher New Zealand CPI boosting RBNZ tightening bets Another surprisingly strong inflation print from New Zealand, with Q3 CPI easing only a notch to 7.2% y/y from 7.3% y/y against consensus expectations of 6.5% y/y and an estimate of 6.4% from the RBNZ at the August meeting. The q/q rate rose to 2.2% from 1.7% in Q2 and way above expectations of 1.5%. This has prompted expectations of more aggressive tightening from the RBNZ with a close to 75bps hike priced in for the Nov 23 meeting vs. ~60bps earlier, and the peak in overnight cash rate at over 5.3% from ~5% previously. NZDUSD rose to 0.5660 with the AUDNZD down to over 1-month lows of 1.1120 with RBA minutes due today as well for the October meeting when the central bank announced a smaller than expected rate hike of 25bps. Crude oil (CLX2 & LCOZ2) Crude oil prices stabilized in early Asian hours on Tuesday after a slight decline yesterday, despite a weaker dollar and an upbeat risk sentiment. WTI futures rose towards $86/barrel while Brent was above $91. Chinese demand concerns however weighed on the commodities complex coming out of the weekend CCP announcements. On the OPEC front, Algeria's Energy Minister echoed familiar rhetoric from the group that the decision to reduce output is a purely technical response to the world economic circumstances.   What to consider? UK need to know: Policy U-Turn provides shorter term risk-on rally, but long-term headwinds remain, UK holds talks to avoid power shutdowns New British chancellor Jeremy Hunt reversed almost all of PM Liz Truss’ mini-budget. Initially Truss’ plans sent markets into a tailspin - whereby the pound hit record lows and the Bank of England was forced to intervene. However, after Hunt virtually scrapped all of the announced tax cuts, and cut back support for household energy bills, saving $32 billion pounds, then risk sentiment improved and the pound gained strength. But, the issue is, firstly; there are still almost $40 billion pounds worth of savings to be made to close the fiscal gap; meaning more government spending cuts will come and possibly tax hikes. This is probably why new UK finance chief, Hunt, declined to rule out a windfall profit tax. Nevertheless, the U-turn was received well by markets for the short term, bond yields fell, equities rallies and the pound sterling (GPBUSD) rose 1.6% against the USD with the US dollar losing strength. And the second reason the UK is not out of the lurch is that the fundamentals haven’t changed; the UK energy crisis is not resolved – yesterday in the UK government officials met major data centers discussing the need to use diesel as backup if the power grid goes down in the coming months. Amazon.com and Microsoft run data centers in the UK. Earlier this month, National Grid also warned some UK customers they could face 3-hour power cuts on cold days. The Bank of England is expected to downgrade its rate hike expectations.    NY Fed manufacturing headline lower on mixed components The NY Fed manufacturing survey for October fell to -9.1, contracting for a third consecutive month and coming in below the expected -4.0 and the prior -1.5. While survey data remains hard to trust to decipher economic trends, given a small sample size and questioning techniques impacting results, it is worth noting that more factories are turning downbeat about future business conditions which fell 10 points to -1.8 and was the second weakest since 2009. Also, the prices paid measure rose for the first time since June, echoing similar results as seen from the University of Michigan survey. Fed speakers ahead today include Bostic and Kashkari and terminal rate expectations remain on watch after they are touching close to 5%. La Nina is underway in Australia; floods decimate some wheat crops In the Australian state of Victoria at the weekend, floods decimated some wheat crops, which has resulted in the price of Wheat futures contracts for March and May 2023 lifting in anticipation that supply issues will worsen. The Australian Federal Emergency Management Minister said parts of Australia face ‘some serious flooding’ with more rain forecast later this week, with 34,000 homes in Victoria potentially expected to be inundated or isolated. The Bureau of Meteorology forecasts the La Lina event to peak in spring that’s underway in the Southern Hemisphere, before turning to neural conditions early next year. La Nina is not only disastrous to lives, homes and businesses, but the extra rainfall usually brings about lot of regrowth when rain eases. The risk is, if El Nino hits Australia in 2023 for instance, bringing diminished rainfall and dryness, then there is a greater risk of grassfires and bushfires. Investors will be watching insurance companies like Insurance Australia Group, QBE. As well as companies that produce wheat, including GrainCorp and Elders on the ASX and General Mills in the US. RBA Meeting Minutes out – AUDUSD climbs of lows, up 1.7% The Aussie dollar rose 1.7% off its low after the USD lost strength when the UK re winded some tax cuts. The AUDUSD will be in focus with the RBA Meeting Minutes released, highlighted why the RBA rose interest rates by just 0.25% this month, moving from a hawkish to dovish stance. The RBA previously highlighted it sees unemployment rising next year, and sees inflation beginning to normalize next year, which in our view, implies the RBA will likely pause with rate hikes after December, after progressively making hikes of 25bps (0.25%). Still the Australian dollar against the US (AUDUSD) remains pressured over the medium term, given the Fed’s expected heavy-pace of hikes, while China’s commodity buying-power is restricted with President Xi maintaining a covid zero policy. As such, the AUD's rally might be questioned unless something fundamentally changes. China delays the release of Q3 GDP and September activity data Chin’s National Bureau of Statistics delays the release of Q3 GDP, September industrial production, retail sales, and fixed asset investment data that were scheduled to come on Tuesday without providing a reason or a new schedule.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight.   For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-18-oct-18102022

Stocks rose on Monday, primarily due to the start of the corporate reporting season. Clearly, investors are no longer focusing only on increasing interest rates, high inflation and deteriorating world economy, but also on the performance of companies. This inspires optimism in the market, which decreases negative sentiment and brings back demand for shares. Thus, the stock markets in Europe and the US showed a noticeable increase, while US treasury yields have stalled and are not going anywhere after their recent growth. For example, the yield of 10-year bonds hit 4% and so far could not consolidate above it. This, in turn, puts pressure on the dollar, prompting a rise in other currencies paired with it. Considering that there is a two-week time lag until the Fed's meeting in November, investors have more time to win back losses. This may start today, during the European session, and may extend amid positive dynamics of US stock indices. Of course, the dollar will be affected negatively, but there is still the need to buy it because there are too many factors that do not allow it to decline fully. Most likely, further aggressive rate hikes by the Fed and the presence of high demand will keep it afloat for a long time. Forecasts for today: AUD/USD The pair failed to overcome 0.6330, which reinforces the existing downward trend. If this continues, the quote will fall to 0.6220. USD/CAD The pair is testing the level of 1.3715. A rise above it could lead to a further increase to 1.3885.   Relevance up to 07:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324580

Summary:  We have seen some wild swings in risk sentiment in recent days, with the USD first jerked one way and then the other, all while the JPY continues to fall broadly and set new lows versus even a shaky US dollar today as it appears Bank of Japan governor is willing to go down with the YCC ship and longer US treasury yields remain pinned near the cycle highs. Elsewhere interesting relative moves in Aussie and kiwi overnight on dovish RBA minutes and a hot NZ CPI print. FX Trading focus: Whiplash for USD traders, JPY continues plunge. Yesterday saw a bizarre melt-up in risk sentiment that took the USD down a few notches. There was no readily identifiable trigger for the sentiment shift yesterday, which could be related to heavy derivatives exposure and stretched sentiment. Even for the relatively near term, it is hard to see a meaningful USD turnaround without anticipation that the Fed is set to ease up on its tightening message, with the chicken-and-egg dilemma that it will likely only do so once employment indicators (badly lagging) are headed clearly south. A considerable portion of the USD weakness yesterday was against sterling, with GBPUSD managing to back all the way up above 1.1400 in late trading. Sterling even made a bid at breaking through pivotal levels in EURGBP, although that move has been corralled for now (low near 0.8575 – trading well above 0.8700 as of this writing). It is interesting to see headlines attributing the latest sterling surge to FT sources indicating that the Bank of England will delay any attempt to do QT for now (The BoE pushed back against that story this morning). Sure, the recent sterling recovery was achieved as the new UK Chancellor reversed most of Truss’ budget-busting initiatives, and on the Bank of England bringing emergency liquidity and indicating it would be will to hike as much as necessary to stabilize markets at the next meeting. When you ease the liquidity crisis in the proverbial burning theater, sterling can stabilize. Stabilization will not necessarily lead to a strong new rally. As for the QT, it would be a sign of ongoing fragility if the BoE was to fail to carry out any QT for now, not a source of sterling strength. We may have seen the top in GBPUSD here unless this strange melt-up in risk sentiment extends. Elsewhere, interesting to note that despite a weak US dollar yesterday and into this morning, the Japanese yen remains resolutely weak, with new highs in JPY crosses and even USDJPY again today (although possible signs of intervention as I am writing today’s report – more in the chart discussion below). Bank of Japan governor Kuroda remains unmoved, arguing for no change in policy once again overnight and saying that inflation would eventually fall back even if currency weakness risked aggravating inflation levels and telling a lawmaker who asked that he resign that he has no plans of quitting. Have to believe the next round of intervention may be coming up soon for JPY crosses, but speculators may be smelling blood after the prior round failed to impress beyond a few hours, as noted below. Chart: USDJPYIn posting a USDJPY chart today, I was originally going to ask whether intervention is on the way, given we were posting new highs in USDJPY this morning and nearing the 150.00 level. Then, what might be intervention or what might be a nervy market over-reacting to large transactions materialized suddenly, with all JPY crosses dipping suddenly and violently, only to recover much of the lost ground within minutes. Official intervention would more likely have driven a larger move. Let’s recall what happened the last time the BoJ intervened a few weeks ago, when USDJPY challenged above the important 145.00 area resistance at the time: an initial low was posted within an hour just below 141.00 and then a few hours later that low was slightly exceeded before the rebound back to more or less unchanged within two days. Working against the intervention efforts was a fresh rise in global bond yields at the time – a factor that will continue to overwhelm any intervention efforts as long as long yields stay here or run higher still. But safe to say that the threat of official intervention makes tactical trading a risky business. Source: Saxo Group An interesting session overnight for AUDNZD as the RBA minutes highlighted concerns that the steep pace of rate tightening in this cycle will heavily impact the Australian consumer, particularly as floating rate mortgages reset in the months ahead. In New Zealand, the release of the much hotter than expected Q3 CPI data jolted RBNZ rate expectations sharply higher, with solid odds now for the first 75 basis point move for the cycle from the RBNZ next month. AUDNZD pounded lower overnight, trading well below 1.1100 at times, but I wonder how much more the market can get out of this correction. I still see the relative current account trajectory as an important factor – will look for support to come in soon as the rate spread likely can’t get much more stretched in the kiwi’s favour and shouldn’t matter that much in the mix anyway. Table: FX Board of G10 and CNH trend evolution and strength.Awaiting the USD status again after this latest sell-off as the secular rally remains intact – would have to see above 0.9900 and even parity in EURUSD and USD weakness elsewhere to suggest a larger scale consolidation afoot. Note the CNH level in USDCNH terms as the action remains pinned in the 7.20+ area there and USDJPY applies further pressure to USD/Asia. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Interesting to see if GBP rolls over now to weakness in GBPCHF, EURGBP and GBPUSD terms. GBPUSD just flipped to positive as of yesterday’s close, but hasn’t broken above 1.1500 resistance – the chart is neutral within this range and tilts more negative back below 1.1000 again. Elsewhere, NOKSEK could be set for a challenge lower after an interesting sell-off today – trend is neutral and awaiting new momentum. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights 1215 – Canada Sep. Housing Starts 1315 – US Sep. Industrial Production 1400 – US Oct. NAHB Housing Market Index 1600 – ECB's Schnabel to speak 2130 – US Fed’s Kashkari (voter 2023) to speak Source: FX Update: Whiplash for USD traders, JPY remains in dumps. | Saxo Group (home.saxo)

The first thing that is seen on the daily chart of the AUD/USD currency pair is the exit of the signal line of the Marlin Oscillator from its own descending channel. Thus, the price convergence with the oscillator has started to work. The price went above the resistance of 0.6300 and is currently trying to overcome the green line of the downward price channel. The price will likely reach the 0.6360 level (28 September low). Consolidation above the level opens a second target at 0.6439 (26 September low). But the signal line of the oscillator is already approaching the zero line. If Marlin continues to grow ahead of the price, then it will touch the zero line simultaneously with the price reaching the level of 0.6360. And here a synchronous downward reversal of the price and the oscillator can occur. On the four-hour chart, the price settled above the level of 0.6300 and above the MACD line. The Marlin Oscillator is developing in the positive area. We are following the development of the last, as expected, branch of price growth.   Relevance up to 02:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324678

AUD/USD takes offers to renew intraday low, print the first daily loss in three. Market sentiment roils as economic calendar gets active. Four-month high covid numbers from China, hawkish Fed bets favor bears. Risk catalysts are important ahead of Thursday’s Aussie jobs report. AUD/USD takes offers to renew intraday low around 0.6300 as markets fade the previous risk-on mood during early Wednesday in Europe. Also exerting downside pressure on the risk-barometer pair could be the firmer US Treasury yields and anxiety ahead of Thursday’s Australian employment data for September. The US 10-year Treasury yields added six basis points (bps) near 4.06% mark at the latest. In doing so, the US bond coupons rush towards the 14-year high marked earlier in the week amid hawkish Fedspeak and mixed US data. Earlier in the day, Minneapolis Federal Reserve Bank President Neel Kashkari said, “Until I see some compelling evidence that core inflation has at least peaked, not ready to declare a pause in rate hikes.” With this, the CME’s FedWatch Tool signals that markets are pricing in a nearly 95% chance of the Fed’s 75 rate hike in November. That said, US Industrial Production for September improved but the NAHB Housing Market Index for October dropped, respectively around 0.4% MoM and 38 versus the market expectations of 0.1% and 43 in that order. Other than the Fed-linked catalysts, increasing covid woes in China and the market’s rush towards risk-safety amid higher inflation data from the major economies, recently by the UK, also propel the US Treasury yields and weigh on the AUD/USD prices. Additionally, Russia’s strong fight in Ukraine joins the political pessimism in the UK to exert additional downside pressure on the market’s previously positive mood and favor the Aussie pair sellers. It should be noted, however, that the firmer equities and cautious mood ahead of Thursday’s Australia jobs report for September put a floor under the AUD/USD prices. That said, the headline Aussie Employment Change is expected to ease to 25K versus 33.5K prior while the Unemployment Rate may remain unchanged at 3.5%. Should the scheduled Aussie job numbers match downbeat forecasts, the recently mixed comments from the Reserve Bank of Australia (RBA) could push back the hawks and please sellers. Technical analysis Failure to provide a daily closing beyond the 10-DMA hurdle around 0.6300 keeps the AUD/USD bears hopeful inside a six-week-old bearish channel, currently between 0.6345 and 0.6090.

AUD/USD is considerably lower today, trading at 0.6273, down 0.57%. Employment data expected to remain strong Australia releases employment data on Thursday, with the markets expecting that the report will show that the labour market remains robust. The economy is forecast to have created 25,000 jobs in September, following the 35,000 gain in August. Unemployment is expected to remain at 3.5%. The strong labour market has enabled the RBA to continue its sharp rate-tightening cycle, with the cash rate currently at 2.60%. The central bank plans to continue raising rates, as the focus is on curbing inflation, which came in at 6.8% in August. The October inflation report will be especially significant, as it will be released just days before the RBA meeting on November 1st (in addition to the quarterly CPI report, Australia has started releasing a monthly inflation release, but it covers only 70% of goods and services). Higher rates will curb inflation eventually, but the cost could be an economic recession. Already, households are straining their budgets as inflation remains red-hot and higher interest rates are increasing borrowing repayments. This will likely dampen consumer spending, a key driver of economic growth. The Australian dollar has hit hard times. Since August 1st, AUD/USD has plunged 550 points, as risk sentiment has taken a beating and the Federal Reserve’s aggressive tightening has boosted the US dollar. China’s economy has been struggling and the escalation of the Ukraine conflict, with no end in sight, has sapped the appetite for risk-related currencies like the Australian dollar. With the Fed likely to deliver more oversize rate hikes and China and Ukraine likely to remain hotspots, the outlook does not look bright for the Aussie. AUD/USD Technical AUD/USD faces resistance at 0.6331 and 0.6460 0.6250 is under pressure in support. Below, there is support at 0.6121 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. AUD/USD eyes job data - MarketPulseMarketPulse

AUD/USD recovers early lost ground amid the emergence of some selling around the USD. A positive risk tone undermines the safe-haven buck and benefits the risk-sensitive aussie. A combination of factors might continue to act as a headwind and favour bearish traders. The AUD/USD reverses an intraday dip to a three-day low and climbs back above mid-0.6200s in the last hour, though lacks any follow-through buying. A modest bounce in the US equity futures prompts some selling around the safe-haven US dollar, which, in turn, offers some support to the risk-sensitive aussie. That said, a combination of factors acts as a headwind for the AUD/USD pair and should continue to keep a lid on any meaningful recovery. Rising bets for aggressive interest rate hikes by the Federal Reserve remain supportive of elevated US Treasury bond yields. In fact, the rate-sensitive 2-year US government bond stands near a 15-year peak and the benchmark 10-year Treasury note hits its highest level since the 2008 financial crisis. Furthermore, any optimistic move is likely to remain capped amid growing worries about a deeper global economic downturn, which could further benefit the greenback's relative safe-haven status. Apart from this, the softer Australian jobs report might also contribute to capping gains for the AUD/USD pair. In fact, the Australian Bureau of Statistics reported that the number of employed people rose by 0.9K in September, well below expectations for a reading of 25K. This, to a larger extent, overshadows the fact that the unemployment rate held steady at 3.5% - the lowest level since the early 1970s. Apart from this, the Reserve Bank of Australia's (RBA) decision to slow the pace of policy tightening earlier this month suggests that the path of least resistance for the AUD/USD pair is to the downside. Hence, a slide back towards the YTD low, around the 0.6170 area, remains a distinct possibility. Traders now look to the US macro data - the Philly Fed Manufacturing Index, the usual Weekly Initial Jobless Claims and Existing Home Sales data. This, along with speeches by influential FOMC members and the US bond yields, will drive the USD demand and provide some impetus to the AUD/USD pair.

AUD/USD dropped close to 100 points in the Asian session but has recovered and is trading in positive territory. Australia’s labour market remains solid Australia released September’s employment report earlier Thursday, which indicated that the labour market remains robust. The economy added 13,300 full-time jobs, with a decline of 12,400 part-time jobs. This follows a superb gain of 55,000 jobs in August. Read next: People's Bank of China Loan Prime Rate Stays Unchanged | A Softer Labour Market In Australia |Eyes On The US - Philly Fed Manufacturing Index| FXMAG.COM The strong domestic economy, in particular the labour market, has contributed to rising inflation, forcing the Reserve Bank of Australia to continue raising rates. The RBA surprised the markets with a small rate hike of 0.25% at its October meeting, which was smaller than expected.  At the meeting, the RBA noted that inflation remains too high, but the modest rate hike fits in with that the central bank’s projection that inflation will peak in early 2023.  The RBA meets on November 1st, with the release of the September inflation report just a few days prior. The inflation data will likely be a major factor in the RBA’s rate decision. The Australian dollar has hit hard times. Since August 1st, AUD/USD has plunged 550 points, as risk sentiment has taken a beating and the Federal Reserve’s aggressive tightening has boosted the US dollar. China’s economy has been struggling and the escalation of the Ukraine conflict, with no end in sight, has sapped the appetite for risk-related currencies like the Australian dollar. With the Fed expected to remain aggressive for the remainder of 2023 and China and Ukraine likely to remain hotspots, there is room for the Aussie to continue to head south. AUD/USD Technical AUD/USD tested support at 0.6250 earlier today. The next support level is 0.6121 There is resistance at 0.6331 and 0.6460 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie briefly drops after jobs report - MarketPulseMarketPulse

Yesterday, like the European currencies, the Australian dollar stayed in a wide range, after which it outlined a break through of technical supports. On the daily chart, such support is the embedded line of the downward channel. Overcoming it (leaving the area below 0.6260) opens the next target at 0.6195, there is another price channel line below it, which the price can reach at around 0.6155. The Marlin Oscillator is still resisting such a plan and is growing against the price, which may slow down the aussie and strengthen it against European currencies in the short term. On the four-hour chart, the price is supported by the MACD indicator line. The Marlin Oscillator has already moved into negative territory and is helping the bears cope with the supports to the best of its ability.   Relevance up to 04:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324915

AUD/USD has dropped lower today and is trading at 0.6252, down 0.43%. Fed expected to remain aggressive The Federal Reserve has signalled that it plans to remain hawkish, as the relentless battle with spiralling inflation continues. This aggressive stance was reaffirmed by Philadelphia Federal Reserve President Patrick Harker on Thursday. Harker stated that higher interest rates had failed to curb inflation, and the Fed would have to continue raising rates “for a while”. He added that rates would be “well above” 4% by the end of the year. Currently, the benchmark is at 3.25%, with the Fed holding its next meeting on November 2nd. The markets have received the Fed’s message loud and clear, and have priced in a 0.75% hike at the November 2nd meeting and in December. The Fed has already raised rates by 0.75% at three straight meetings, and the steep rate-tightening cycle is set to continue, which is good news for the strong US dollar. Australia released September’s employment report on Thursday, which indicated that the labour market remains robust. The economy added 13,300 full-time jobs, with a decline of 12,400 part-time jobs. This follows a superb gain of 55,000 jobs in August. The strong labour market has allowed the Reserve Bank of Australia to hike rates in order to combat inflation, but the central bank has eased up on tightening. The RBA surprised the markets with a small rate hike of 0.25% at its October meeting, which was smaller than expected.  At the meeting, the RBA noted that inflation remains too high, but the modest rate hike fits in with that the central bank’s projection that inflation will peak in early 2023. The RBA meets on November 1st, a few days after the September inflation report, which will likely be a major factor in the RBA’s rate decision. The markets have priced in 0.25% increases at the November and December meetings. . AUD/USD Technical AUD/USD continues to test support at 0.6250. The next support level is 0.6121 There is resistance at 0.6331 and 0.6460 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Aussie bulls are witnessing fresh demand after testing Wyckoff consolidation’s breakout. The positive market sentiment has trimmed returns on US Treasury yields. The 20-EMA has acted as major support for the counter. The AUD/USD pair has attempted a rebound after dropping to near 0.6324 in the late Tokyo session as the risk-on impulse has strengthened further led by gains recorded in S&P500 futures after a solid Friday. The US dollar index (DXY) is working on establishment above 112.00, however, a cheerful risk profile could bring volatility to the counter. Meanwhile, the 10-year US Treasury yields have dropped further to near 4.15% amid improved risk appetite. Going forward, the Australian inflation data will be of utmost importance. On an hourly scale, the asset is testing the textbook-carbon Wyckoff’s consolidation breakout. The major rebounded firmly after Richard Wyckoff’s Spring formation which indicates the climax of the selling pressure and investors make a fresh demand, considering the asset a value buy. The Spring formed at the two-year low of 0.6170. The responsive action from aussie bulls has turned into a breakout of the longer consolidation phase and now the upside break is testing the breakout’s edge. The 20-period Exponential Moving Average (EMA) at 0.6340 is acting as major support for the counter. Meanwhile, the Relative Strength Index (RSI) (14) has retraced from the bullish range of 60.00-80.00. The aussie bulls will strengthen further if the RSI (14) returns to bullish territory. Going forward, a decisive break above Thursday’s high at 0.6356 will strengthen the aussie bulls. This will drive the asset towards October 7 high at 0.6432, followed by October 4 high at 0.6548. On the flip side, a downside break of Thursday’s low at 0.6229 will drag the asset toward the fresh two-year low at 0.6170 and April 2020 low at 0.5991. AUD/USD hourly chart  

Here is what you need to know on Monday, October 24: As investors prepare for the highly-anticipated central bank decisions later this week, major currencies stay relatively quiet at the start of the new week except for the Japanese yen. The US Dollar Index moves sideways at around 112.00 and US stock index futures trade flat on the day. S&P Global will release the preliminary October Manufacturing and Services PMI data for Germany, the euro area, the UK and the US. Federal Reserve Bank of Chicago's National Activity Index will also be looked upon for fresh impetus later in the day. During the Asian trading hours, the data from China revealed that the Gross Domestic Product grew at an annualized rate of 3.9% in the third quarter. This reading came in better than the market expectation for an expansion of 3.4%. Retail Sales in China, however, rose by 2.5% on a yearly basis, falling short of analysts' estimate of 3.3%. The Shanghai Composite fell sharply following mixed data and was last seen losing more than 2% on a daily basis. USD/JPY The USD/JPY pair climbed toward 150.00 in the first hours of trading early Monday but lost over 400 pips in a matter of 10 minutes. Japan’s top currency diplomat Masato Kanda refrained from clarifying whether they intervened in the market but reiterated that they will continue to take appropriate action against excessive, disorderly market moves. Following the sharp decline witnessed in the Asian session, the pair recovered to the 149.00 area, where it's up around 1% on the day. EUR/USD EUR/USD trades in a relatively tight range near mid-0.9800s following Friday's rebound. Business activity in the euro area's and Germany's manufacturing sectors are expected to continue to contract in early October.  GBP/USD GBP/USD trades in positive territory and continues to edge higher toward 1.1400 in the early European morning on Monday. Former British Prime Minister Boris Johnson announced that he ended his big to replace Liz Truss. Meanwhile, former chancellor Rishi Sunak has reportedly 165 supporters ahead of Monday's nomination deadline and remains the clear favourite to become the next PM. Gold Following Friday's impressive upsurge, gold climbed to a fresh 10-day high near $1,670 early Monday but struggled to preserve its bullish momentum. At the time of press, XAU/USD was little changed on the day at $1,657. Meanwhile, the 10-year US Treasury bond yield is down nearly 2% on the day, helping gold hold its ground for the time being. BTC Bitcoin climbed toward $20,000 on Sunday but lost its traction before reaching that level. As of writing, BTC/USD was down 1% on the day at $19,350. Ethereum ended up gaining more than 4% last week and seems to have gone into a consolidation phase above $1,300 early Monday.

The aussie is trying hard to maintain Friday's upward momentum, so yesterday it closed the day above Friday's open and above the nearest green price channel line. The next action, if the price intends to continue rising, should be the exit above the target level of 0.6360. In this case, the 0.6439 target can be reached. If the price fails to keep the upward trend, it will fall to the price channel line to the 0.6250 mark. Breaking the support opens the next target at 0.6195. The Marlin Oscillator in a neutral situation on the zero line. The price is turning up in an obvious way on the four-hour chart: it settled above both indicator lines, the Marlin Oscillator received support after yesterday's decline from the zero line, moves up, and the MACD line itself also turns into growth. There is still interest in risk in the stock market, which is likely to support commodities as well. As a result, the Australian currency may still rise until Thursday, when the European Central Bank will make a decision on monetary policy. Another thing is that the price has no room for growth – the nearest level 0.6360 is too close, and the next level at 0.6439 is obviously too high. The price may choose an intermediate solution - to retest yesterday's high at 0.6412.     Relevance up to 04:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325183

AUD/USD has steadied today after two days of sharp swings. In the European session, the Australian dollar is trading at 0.6317, up 0.09%. It was a brutal start to the week for the Australian dollar, which sank 1.1 per cent on Monday. The manufacturing and services PMIs both slowed in October, pointing to weaker economic activity. Manufacturing expanded but softened, as the Manufacturing PMI slowed to 52.8, down from 53.5. The Services PMI declined to 49.0, down from 50.6 points and its lowest level since September 2021. The decline in business activity is attributable to the continuing rise in interest rates and economic uncertainties. Australia’s labour market remains strong, but the steady diet of rate increases has slowed economic activity. Australia’s CPI expected to climb Australia releases CPI for Q3 on Thursday. The markets are bracing for an uptick in inflation. Headline CPI is expected to rise to 7.0%, up from 6.1% in Q2. Core inflation is projected to rise to 5.6%, up from 4.9%. The RBA says inflation will peak in Q4 2022 at 7.5% but will not fall back to the RBA’s 2% target until 2024. Tomorrow’s inflation report is the last key event before the RBA meets next week, which gives the inflation data added significance and could have a strong impact on the Australian dollar. The RBA surprised the markets with a 0.25% hike earlier this month, which was smaller than expected. The RBA appears to have completed its front-loading, which saw the central bank deliver four straight increases of 0.50%. The markets are expecting another 0.25% hike at the meeting next week, with the RBA hopeful that inflation will start to ease shortly without the need for oversize rate hikes, which would make a recession more likely. . AUD/USD Technical AUD/USD continues to test support at 0.6250. The next support level is 0.6121 There is resistance at 0.6331 and 0.6460 . This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The first reports came from the Pacific at the start of the day. This is an instant report on inflation in Australia. In the second half of the day I am waiting for important decisions from both Americas. Australian CPI At the beginning of the day, we get to know the report on the change in the price of goods and services from the perspective of the consumer in AUstralia. Both the annual and quarterly CPI results are positive. The price change from the third quarter of this year to the third quarter of last year increased by 1.2%. It was expected to rise to 7.0%, but the result turned out to be higher (7.3%). Looking at the previous periods, we can conclude that CPI YoY is in an exemplary trend. Source: investing.com CPI QoQ maintained its previous level of 1.8% and was higher than the forecasted 1.6%, therefore this reading was considered positive. BoC Interest Rate Decision Today the Bank of Canada will decide on interest rates. It is expected that this time there will be a hike of 75bp. Before the pandemic, interest rates were at 1.75%. Along with the increase in the risk of the crash, the rates dropped to the level of 0.25% and this level was maintained until March this year, when the first increase by 0.25% took place. Subsequent decisions on rate hikes confirmed the current level of 3.25%. To better understand the decisions of the Bank of Canada, traders will observe the press conference, which will take place one hour after the announcement of the new rate level. Crude Oil Inventories The weekly report on The Energy Information Administration's (EIA) Crude Oil Inventories will be released today. The reading is expected to be added and the number of barrels of oil held by the US Firms is expected to hit 1.029M. Such a result will mean an increase from the last level of -1.725M. If the increase in crude inventories is more than expected, it implies weaker demand and is bearish for crude prices. New Home Sales (Sep) According to forecasts, the annualized number of new single-family homes that were sold during the previous month will drop from 685K to 585K. Which may mean that the August peak turned out to be a false reflection of the downtrend. Since the beginning of the year, sales of family houses have been in a downward trend, despite several false rebounds from this trend. We can expect this trend to continue as long as interest rates continue to rise and the Fed does not ease its actions. Source: investing.com Brazil Interest Rate Decision Today, the largest country in South America will also decide on interest rates. The level is expected to be maintained. The last three decisions remained unchanged at 13.75% and a fourth such decision is expected. As of August 2020, interest rates in Brazil were at 2.0%. There have been increases in rates since March 2021. In February this year, they exceeded the level of 10.75%. They grew until they hit 13.75% in August. Summary: 2:30 CET Australian CPI (YoY) 2:30 CET Australian CPI (QoQ) 16:00 CET BoC Interest Rate Decision 16:00 CET New Home Sales (Sep) 16:30 CET Crude Oil Inventories 17:00 CET BOC Press Conference 23:00 CET Brazil Interest Rate Decision Source: https://www.investing.com/economic-calendar/

3Q22 inflation beat consensus expectations, as did all the core measures. This puts the Reserve Bank under pressure to return to 50bp rate hikes at their next meeting Australian retail sales  Source: Shutterstock  7.3% CPI inflation YoY% 3Q22 Higher than expected Never a good day when you have to change the axes on your charts... The chart below tells most of the inflation story quite well, though needed a fair bit of surgery this morning to extend the y-axis high enough to incorporate the latest surge in inflation. Australia's 3Q22 CPI index rose at a 1.8%QoQ pace, no slowdown from the pace of growth recorded in 2Q22, and this took the headline inflation rate to 7.3%, beating the consensus expectations for a 7.1% inflation rate. But the bad news doesn't end there. Core measures of the inflation rate, which might have tempered any outsize rises in erratic items driving the headline index, also showed larger-than-expected rises.  Trimmed mean inflation is now 6.1%YoY, and the weighted median inflation rate is 5.0%. All three measures are considerably above the Reserve Bank of Australia's 2-3% target range.  Australian headline and core inflation Source: CEIC, ING What's driving inflation now? Within the CPI basket, the biggest drivers for the year-on-year gain were housing and food.  For housing, there are still big year-on-year gains showing for purchase prices of homes. Though these are probably on the verge of turning lower. Rental inflation on the other hand is picking up and probably has some way to rise. But probably doing most of the damage on the housing side this quarter was a steep rise in utilities, driven by a 16.6%YoY increase in gas and other fuel prices.  Within the food index, fruit and vegetables have clearly been hit by floods and adverse weather, though this also seems to have spilt over into a wide range of other food items, including dairy, meat, oils, condiments, cereals and their products including bread. Indeed, there were very few food and beverage items where inflation did not rise.  The good news is that such weather-driven supply shocks tend to come and go, so food prices could pull back next quarter as supplies adjust, though subject to the increasingly important caveat that there are no more adverse weather effects.    Where does this leave the RBA At their October meeting, the RBA dropped the pace of their tightening to 25bp, hinting that they would prefer to move ahead at a slower pace as they pushed rates into restrictive territory.  Today's inflation data suggest that this moderation may prove short-lived. It is hard to see how the RBA can ignore such an outsized miss on inflation, even though they have been clear in their statements that they didn't think inflation had yet peaked. This inflation data adds pressure on the RBA to revert to a 50bp tightening pace next month.  Though if the wage price data out on 16 November remains moderate, they may be able to drop back to a 25bp rate at the December meeting.  Read this article on THINK TagsReserve Bank of Australia Australian inflation AUD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

AUD/USD is sharply higher for a second straight day. In the European session, the Australian dollar is trading at 0.6484, up 1.412. After losing over 1% on Monday, the Aussie has roared back with gains of over 2.7%. Australia’s inflation jumps to 7.3% Australia’s inflation report is the driver behind today’s gains, as third-quarter inflation was stronger than expected. Headline CPI jumped 7.3%, its highest level since 1990. This was way up from 6.1% in Q2 and above the consensus of 7.0%. The key core inflation indicator climbed to 6.1%, up from 4.9% and above the consensus of 5.6%. The unexpected rise in inflation upsets the apple cart for the RBA, which lowered its October rate hike to 0.25%, after four straight increases of 0.50%. The RBA would have liked to continue with a small hike at next week’s meeting and there has even been talk of a pause in rate hikes. The hot inflation report changes this thinking dramatically. It’s difficult to see how the RBA can ignore the jump in inflation, which is a painful reminder that inflation is yet to peak. The central bank will likely have to respond with a 0.50% increase, and the Australian dollar has soared today as a result. As the inflation report is the last key release before next week’s meeting, the RBA won’t have any additional data which could temper the need for a 0.50% hike. The RBA will have little choice but to continue with oversize rates until inflation is beaten, which could take a while yet. The central has projected that inflation will hit 7.5%, with some analysts expecting it to rise closer to 8.0%. That means that the cash rate, which is currently at 2.6%, is unlikely to peak until it rises to 3.5% or slightly higher. AUD/USD Technical AUD/USD continues to test support at 0.6250. The next support level is 0.6121 There is resistance at 0.6331 and 0.6460 .   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie extends rally as inflation outperforms - MarketPulseMarketPulse

AUDUSD grinds higher The Australian dollar finds support from strong CPI in Q3. From the daily chart’s perspective, sentiment remains extremely bearish and the latest rebound could be a mere flag-shaped consolidation near moving averages. The pair has met stiff selling pressure at the support-turned-resistance (0.6400). Its breach on a second attempt means that the bulls will be challenging 0.6540 before they could turn the mood around. Or a dip below 0.6300 could trigger a new round of sell-off below the critical floor at 0.6210.   XAUUSD attempts to bounce Bullion strengthens as a decline in US home prices weighs on Treasury yields. Gold saw bids at the previous low (1615) and a surge above 1660 may have prompted some short interests to cover. A rally fueled by profit-taking will not be enough to reverse the price action unless the precious metal secures follow-up buying. 1670 used to be a demand zone from a rally earlier this month and has become a key resistance. Its breach would carry the price to the previous high at 1730. A break below 1615 would push gold to 1570.   UK 100 tests resistance The FTSE 100 bounces as traders bet on a slowdown in the hiking cycle. The index has clawed back losses from previous sessions but the bias remains down. The price action is testing the supply zone between the 30-day moving average and the daily resistance at 7100 where strong pressure could be expected after the market edged into bearish territory. 6880 is a fresh support and 6820 the short-term bulls’ second line of defence. Their breach would invalidate the latest rebound and send the index below 6700.

The Australian dollar, paired with the US currency, is storming the 64th figure, reacting to the release of data on inflation in the country. The report turned out to be "unipolar": all components came out in the green zone, surpassing even the most daring expectations of experts. At the same time, the greenback is still under pressure: the US dollar index fell to the 110th mark, amid increased interest in risky assets. In other words, the situation is in favor of the upward scenario in AUD/USD, at least in the context of a large-scale correction. To confirm their ambitions, buyers of the pair will have to consolidate above the intermediate resistance level of 0.6450, which corresponds to the Kijun-sen line on the daily chart. But the main target is slightly higher—at 0.6540, which is the upper line of the Bollinger Bands indicator on the same timeframe. Above this target, Aussie rose for the last time at the end of September, so this price barrier has a psychologically important significance. But back to Australian inflation. According to published data, the consumer price index in the third quarter jumped to 7.3% YoY (with a forecast of growth to 7.0% and the previous value of 6.1%). In quarterly terms, the indicator rose to 1.8% with a growth forecast of up to 1.6%. On a monthly basis, the CPI also came out in the green zone, reaching 7.3%. Again—all components of today's report exceeded the expectations of most analysts. On the one hand, this fundamental factor really supported the Australian dollar, and not only paired with the US currency, such crosses as AUD/JPY and AUD/NZD demonstrate upward dynamics. But on the other hand, the published inflation report is unlikely to be able to keep buyers of the AUD/USD pair in good shape for a long time. As soon as the first emotions settle down, Aussie will again focus on the dynamics of the greenback. Indeed, by and large, today's release, despite its "green color," has not changed anything significantly. Representatives of the RBA may, to some extent, toughen their rhetoric, but at the same time, the regulator will continue to raise the interest rate in 25-point increments. Yes, inflation is growing at a faster pace, but it should be remembered that, according to the forecasts of the RBA, the CPI by the end of the year will be 7.8%. Therefore, the current growth of the index may be caused by "excessive concern" among RBA members, but no more. Australian Treasurer Jim Chalmers said that the government does not expect a significant change in the inflation forecast. According to him, the Treasury expects inflation to peak at the same level at the end of the year (that is, at around 7.8%). It is also worth recalling the comments of RBA Governor Philip Lowe, who, following the results of the October meeting, made it clear that members of the central bank are afraid of the negative consequences of aggressive tightening of financial conditions for consumer spending. According to him, the simultaneous increase in inflation and an increase in the rate "put a lot of pressure on consumers' budgets." In addition, members of the Reserve Bank were concerned about the state of affairs in the labor market. Whereas the latest "Australian Nonfarm" were quite contradictory – for example, the indicator of the increase in the number of employed came out at around 0.9k with a forecast of growth of 25k. Therefore, in my opinion, the positive effect of today's inflation release will be short-term. In the medium term, the Aussie will move in the wake of the US currency, which is weakening ahead of the November Fed meeting and against the backdrop of weak macroeconomic reports. In particular, the consumer confidence index dropped to 102 points, and the index of manufacturing activity from the Federal Reserve Bank of Richmond to -10 points. Such weak results have increased traders' concern about the Fed's next steps. Rumors have spread in the market that the Fed would demonstrate a less hawkish attitude at the November meeting against the background of further signs of economic weakness in the United States. It is noteworthy that experts are discussing the possible results of the December meeting, and not the November one (at which the Fed is 97% likely to raise the rate by 75 points). The probability of a 75-point rate hike in December is gradually decreasing, and this fact puts pressure on the US currency. Thus, the AUD/USD pair retains the potential for further corrective growth, but rather due to a temporary weakening of the greenback. Australian statistics supported the Aussie "at the moment," but this fundamental factor will not be able to keep the AUD/USD pair afloat if dollar bulls strengthen their positions again. The first and so far the main target of corrective growth is the mark of 0.6540—this is the upper line of the Bollinger Bands indicator on the D1 timeframe. Overcoming this target will open the way for buyers to the 66th figure, but it is too early to talk about it. Indeed, to date, the RBA has already slowed down the pace of tightening monetary policy, while the Fed is guaranteed to raise the rate by 75 points at least in November. All other assumptions are still speculation and cannot serve as a basis for a steady growth of AUD/USD.   Relevance up to 10:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325371

Technical analysis: AUD/USD has been trading downside after the breakout of the rising trend-line and triangle pattern in the background, there is chance for further downside movement. Trading recommendation: Due to the breakout of the rising trend-line and triangle pattern in the background, I see potential for further drop towards downside references. Watch for selling opportunities on the intraday rallies with the downside objectives at 0.6412, 0.6300 and 0.6215. MACD oscillator is showing downside reading, which is sign that sellers are taking control. Key resistance is set at the price of 0.6505   Relevance up to 08:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298737

AUD/USD could enter a consolidative phase ahead of a probable climb to the 0.6550 region, note UOB Group’s Markets Strategist Quek Ser Leang and Rates Strategist Victor Yong. Key Quotes 24-hour view: “We highlighted yesterday that ‘the rapid rise appears to be overdone and AUD is unlikely to advance much further’ and we expected AUD to ‘trade in a range between 0.6440 and 0.6520’. Our view was not wrong even though AUD traded within a wider range than expected (0.6428/0.6522). Further range trading appears likely today, expected to be between 0.6405 and 0.6505.” Next 1-3 weeks: “There is not much to add to our update from yesterday (27 Oct, spot at 0.6480). As highlighted, overbought short-term conditions could lead to 1 to 2 days of consolidation first. As long as the ‘strong support’ at 0.6470, (no change in level from yesterday) is not breached, AUD is likely to strengthen further to 0.6555 later on.”

The extremely volatile last full trading week of October ended on Friday, October 28. Meetings of the three largest world central banks (Canada, the eurozone, Japan) were held. If the decisions taken by the European Central Bank and the Bank of Japan on interest rates coincided with market expectations, then the Bank of Canada made an unexpected decision, surprising investors. The bank raised its interest rate by 50 basis points to 3.75%, although markets had expected a 75 bp hike. The decision appears to have been prompted by growing concerns about the threat of a slowdown in the economy and a deepening global recession, and disappointed market participants. Next week, market participants will focus on two main and key events: the Federal Reserve meeting and the release of the monthly report of the US Department of Labor for October. In addition, the Reserve Bank of Australia and the Bank of England will also hold their meetings on monetary policy issues, moreover, the RBA meeting will be held on Tuesday. Ahead of this event, AUD/USD shows mixed intra-weekly dynamics, although the overall global downward trend of the pair remains in place for now.     When this article was written on Friday, AUD/USD was trading near the 0.6413 mark, falling towards the support level of 0.6382. Its breakdown would have confirmed the resumption of downward dynamics, although short positions can be opened already in the market, limiting the loss with a stop loss above 0.6480. As a result of the October meeting, the RBA raised the interest rate by 0.25%, disappointing bulls on the Australian dollar. The RBA cited weakening growth prospects for the global economy as the main reason for this decision. The decision to raise the rate by 0.25% came as a surprise to market participants who had expected a 0.50% increase. While the RBA's accompanying statement said that "the central bank remains strongly committed to bringing inflation back to its target" and "expects further interest rate hikes in the coming period", market participants viewed the decision as a mild one to further strengthen the Australian dollar. It fell sharply immediately after the announcement of the RBA's decision. In turn, at the very beginning of this week, the assistant governor of the RBA, Christopher Kent, said that "the RBA board expects further interest rate hikes in the coming period," but "the size and timing of the rate hike will depend on incoming data." Such a "vague" formulation of the thesis about the prospects for the RBA interest rate cannot serve as a basis for any significant strengthening of the AUD, while other major world central banks are aggressively raising their interest rates. Now, at Tuesday's meeting, the RBA is widely expected to raise interest rates by 0.25%. This will be the second consecutive increase of 0.25%. How market participants will react to it, while the Fed and other major world central banks continue to move with more confident steps in the cycle of tightening their monetary policies, is not difficult to guess. AUD is unlikely to strengthen much after such a decision by the RBA. Although, a lot will also depend on the accompanying statements of the bank's management. Tough rhetoric of their statements regarding future RBA interest rate hikes may support the Australian dollar. In general, as we have already noted above, the general global downward trend of the pair is still in force. Relevance up to 11:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325640

Tuesday 01 November Saints' Day is celebrated in European Catholic countries: banks are closed in them, which will affect the volume of trading in financial markets - they will be lower than usual. Australia. RBA meeting and interest rate decision. RBA accompanying statement During the May meeting, RBA leaders made a surprise decision to raise the interest rate to contain inflation, which reached a 20-year high (in the 1st quarter of 2022, headline annual consumer price inflation in Australia was 5.1%, and core inflation was 3.7 %, with the target RBA level of 2% - 3% per year). The interest rate was raised by 0.25%, to 0.35%, for the first time in the last 11 years, and the forecast assumed an increase of only 0.15%. As it said in an accompanying statement, "with the move towards full employment and data on prices and wages, some scaling back of the emergency monetary support provided during the pandemic is appropriate" and "the (central bank) board will do everything necessary to so that, over time, inflation in Australia will return to the target level." "This will require further interest rate hikes going forward," RBA Governor Philip Lowe said. In June, the interest rate was again raised to 0.85%, in July to 1.35%, in August to 1.85%, and in October to 2.60%. At the same time, economists expect that the RBA will continue to raise interest rates, at least until the end of this year. This, in turn, creates prerequisites for the strengthening of the Australian dollar. It is possible that at this meeting the Central Bank of Australia will again raise the interest rate, although unexpected decisions are possible, for example, a decrease or a stronger increase in the interest rate. It is likely that the AUD will react positively to the decision to raise the interest rate, as market participants will receive confirmation of the seriousness of the RBA's intentions in its desire to tame the rising inflation in the country and reach the level of 2.05% - 2.6% by the end of the year, however, provided that the accompanying statement will not contain unexpected statements, for example, about the need to take a break before a further increase in the interest rate. In any case, during the announcement of the RBA's decision on the interest rate, an increase in volatility in AUD quotes is expected. If the RBA's accompanying statement signals a wait-and-see attitude, the Australian dollar is likely to come under pressure. However, the reaction of the market to the decisions of the RBA regarding the interest rate in the current situation may turn out to be completely unpredictable. The level of influence on the markets is high. UK. Index (PMI) of business activity in the manufacturing sector (final release) The UK Manufacturing PMI (from S&P Global) is an important indicator of the health of the UK economy. If the data turns out to be worse than the forecast and the previous value, then the pound is likely to fall sharply in the short term. Data better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is considered positive and strengthens the GBP, below 50 is considered negative for the GBP. Previous values: 48.4, 47.3, 52.1, 52.8, 54.6, 55.8, 55.2, 58.0, 57.3. The preliminary score was: 45.8. The level of influence on the markets (final release) is average. Canada. Business activity index (PMI) in the manufacturing sector The monthly S&P Global report publishes (among other data) the PMI in the manufacturing sector of the Canadian economy, which is an important indicator of the state of this sector and the Canadian economy as a whole. A result above 50 is seen as positive and strengthens the CAD, below 50 as negative for the Canadian dollar. The data above the value of 50 indicate an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and, especially, below the value of 50, the dollar may sharply weaken in the short term. Previous indicator values: 48.7, 52.5, 54.6, 56.8, 56.2, 58.9, 56.6, 56.2 (in January 2022). The level of influence on the markets is average. USA. Manufacturing PMI (from S&P Global) (final release) The monthly S&P Global report releases (among other data) a composite PMI index and PMI indices in the manufacturing sector and in the services sector of the US economy, which are an important indicator of the state of these sectors and the US economy as a whole. A result above 50 is considered positive and strengthens the USD, below 50 is considered negative for the US dollar. The data above the value of 50 indicate an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and, especially, below the value of 50, the dollar may sharply weaken in the short term. The previous values of the PMI indicator in the manufacturing sector were 52.0, 51.5, 52.2, 57.0, 59.2. The preliminary score was: 49.9. The level of influence on the markets of this S&P Global report (final release) is medium. It is also lower than the similar report from ISM (American Institute of Supply Management) USA. Business activity index (PMI) in the manufacturing sector The monthly report of the Institute of Supply Management (ISM) publishes (among other data) the PMI index of manufacturing activity in the US economy, which is an important indicator of the state of this sector and the American economy as a whole. A result above 50 is considered positive and strengthens the USD, below 50 is considered negative for the US dollar. The data above the value of 50 indicate an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and, especially, below the value of 50, the dollar may sharply weaken in the short term. Previous indicator values: 50.9, 52.8, 53.0, 56.1, 55.4, 57.1, 58.6, 57.6 (in January 2022). Forecast for October: 50.4. The level of influence on the markets is high. New Zealand. Dairy Price Index This leading indicator of a country's foreign trade balance reflects the weighted average price of 9 dairy products sold at an auction organized by Global Dairy Trade (GDT) in percentage terms and is usually published every 2 weeks. The economy of New Zealand still has signs of raw materials in many respects, and the bulk of New Zealand's exports are dairy products and food products of animal origin (27%, according to 2020 data). Therefore, the decline in world prices for dairy products has a negative impact on NZD quotes, as it signals a decrease in export earnings coming to the New Zealand budget. Conversely, an increase in the dairy price index has a positive effect on the NZD. Previous values: -4.6%, +2.0%, +4.9%, -2.9%, -5.0%, -4.1%, -1.3%, +1.5% , -2.9%, -8.5%, -3.6%, -1.0%, -0.9%. The level of influence on the markets is from low to medium. Australia. Index (PMI) of business activity in the manufacturing sector (from AiG) This report from the Australian Industry Group AiG is an analysis of a survey of 200 purchasing managers that asks respondents to rate the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries and inventory. Since purchasing managers have perhaps the most up-to-date information on the situation in the company, this indicator is an important indicator of the state of the German economy as a whole. This sector of the economy forms a significant part of Australia's GDP. A result above 50 is seen as positive and strengthens the AUD, below 50 as negative for the Australian dollar. Data worse than the forecast and/or the previous value will have a negative impact on the AUD. Previous values: 50.2, 49.3, 52.5, 54.0, 52.4, 58.5, 55.7. The level of influence on the markets is average. New Zealand. Data from the labor market of the country (for the 3rd quarter) The New Zealand Bureau of Statistics is to publish a report containing important data on the state of the labor market, which are of critical importance (along with data on GDP and inflation) for the country's central bank when deciding on the parameters of the current monetary policy. The employment rate reflects the change in the number of employed New Zealanders. The growth of the indicator has a positive impact on consumer spending, which stimulates economic growth. A high reading is positive for NZD, while a low reading is negative. Previous (quarterly) changes in the employment rate: 0%, +0.1%, +0.1%, +1.9%, +1.0%, +0.6% (in the 1st quarter of 2021) . The unemployment rate is an indicator that assesses the ratio of the share of the unemployed population to the total number of able-bodied citizens. The growth of the indicator indicates the weakness of the labor market, which leads to a weakening of the national economy. The decrease in the indicator is a positive factor for the NZD. Previous (quarterly) values: 3.3%, 3.2%, 3.2%, 3.3%, 4.0%, 4.6% (in Q1 2021). The level of influence on the markets is medium to high. Japan. Minutes of the meeting of the Monetary Policy Committee of the BOJ This document, which is a detailed account of the latest meeting of the leadership of the BOJ, provides insight into the economic conditions that influenced its decision on the parameters of the current monetary policy. If the BOJ is positive about the state of the labor market in the country, the GDP growth rate, and also shows a hawkish attitude towards the inflationary forecast in the economy, the markets regard this as a possibility of a rate increase at the next meeting, which is a positive factor for the JPY. The soft rhetoric of statements by the bank's leaders regarding, first of all, inflation will put pressure on the Japanese yen. The BOJ continues to adhere to its ultra-soft monetary policy. As Kuroda has repeatedly stated earlier, "it is appropriate for Japan to patiently continue the current loose monetary policy." If the minutes contains unexpected or additional information regarding the monetary policy of the BOJ, then the volatility in JPY quotes will increase. The level of influence on the markets is from low to high. Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325632

The Australian dollar reached a range of target levels of 0.6392 and 0.6453 on Friday. Consolidating below the level of 0.6392 opens the target at 0.6255 – the nearest line of the downward price channel. The Marlin Oscillator is also inclined to decrease. On the four-hour chart, the Marlin oscillator is developing in the negative area, which contributes to the bears' initiative. But in order to develop a confident decline, the price must overcome not only the support level of 0.6392, but also the MACD line, around the mark of 0.6368. While the price has not established itself in the decline, an alternative option for growth remains - a breakthrough above 0.6453 opens the target at 1.6514/32, into which the MACD line of the daily scale has been introduced.     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325722

On November 1, the Reserve Bank of Australia will summarize the results of its next, penultimate meeting this year. According to the forecasts of most experts, the central bank will raise the rate by 25 points, continuing to implement a moderate pace of tightening monetary policy. This time there are no "hawkish illusions", so the Australian dollar is most likely to react not to the fact of a 25-point hike, but to the subsequent rhetoric of the head of the RBA and the tone of the accompanying statement. Despite the predictable nature of the November meeting, there is still some intrigue here. Let me remind you that during the last two weeks, key macroeconomic data on the labor market and inflation were published in Australia. If the "Australian Nonfarm" turned out to be very contradictory, then inflation indicators turned out to be in the green zone, surprising market participants with a breakthrough growth to 32-year highs. Thus, according to published data, the consumer price index in the third quarter jumped to 7.3% YoY (with growth forecast to 7.0% and the previous value of 6.1%). In quarterly terms, the indicator rose to 1.8% with a growth forecast of up to 1.6%. On a monthly basis, the CPI also came out in the green zone, reaching 7.3%. All components of the published report exceeded the expectations of most analysts. The general outlook As for the labor market in Australia, the situation here is as follows. Unemployment remained at the August level of 3.5% (that is, in the area of 50-year lows), as well as the share of the economically active population (66.6%). While the number of people employed last month increased by only 900 people. You should also pay attention to an important point: the rate of price growth is almost three times higher than the rate of wage increases. In general, the market is increasingly concerned that Australia will not escape the recession. Actually, amid these concerns, the RBA has reduced the pace of interest rate hikes in order to reduce the impact of side effects. And in my opinion, to date, the RBA has no reason to reconsider its position on this issue. Here it is necessary to recall the main theses of the minutes of the October meeting of the members of the Australian central bank. The published document clearly made it clear that the RBA will raise the rate at a moderate pace in the coming months. This is eloquently evidenced by the wording of the minutes: "the members of the central bank recognized that the tightening of monetary policy has hit housing prices and household welfare, and over time may lead to a decrease in consumption (...) At the same time, the current situation requires a further increase in interest rates in the coming period." Inflation As for inflation, it is necessary to recognize that the CPI is growing at a faster pace. But, on the other hand, it should also be remembered that, according to the RBA's forecasts, the index should reach 7.8% by the end of the year (YoY). Therefore, the current growth of inflation indicators can only cause "excessive concern" of RBA members, but no more. Expectations  Thus, in my opinion, the RBA is expected to raise the interest rate by 25 basis points at tomorrow's meeting and voice the already familiar rhetoric, despite a significant increase in inflation in the third quarter. The Australian central bank is likely to make it clear that a similar 25-point scenario will be implemented at the last meeting this year. Given the latest inflation release, such restrained results of the November meeting may disappoint AUD/USD traders. It is also worth noting that the RBA will announce its verdict ahead of the announcement of the results of the next Federal Reserve meeting (November 2). Therefore, the market will react to tomorrow's events with an eye to this circumstance. If the RBA confirms the moderate pace of monetary policy tightening, while the Fed maintains its aggressive attitude (including in the context of the December meeting), the aussie will be under significant pressure. In my opinion, this is the most likely scenario, despite the increasing skepticism about the "hawkishness" of the Fed. AUD/USD Summarizing the above, we can assume that the downward trend of AUD/USD has not been exhausted. Therefore, it is advisable to use corrective bursts as an excuse to open short positions (but only after the announcement of the results of the Fed's November meeting). From a technical point of view, the AUD/USD pair is currently located between the middle and upper lines of the Bollinger Bands indicator on the daily chart. However, if the bears push the price below 0.6360, the aussie will be between the middle and lower lines of the Bollinger Bands, and the Ichimoku indicator will form a bearish Parade of Lines signal. In this case, the main bearish target will be the 0.6200 mark – this is the lower line of the Bollinger Bands on the D1 timeframe.   Relevance up to 04:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325792

AUD/USD is down for a third straight day. The Australian dollar is trading at 0.6395, down o.24%. Will RBA deliver a 0.50% hike? The RBA kicks off a busy week of central bank decisions when it meets on Tuesday. This will be followed by the Federal Reserve on Wednesday and the Bank of England on Thursday. The RBA has delivered a steep rate-tightening cycle this year and the upcoming meeting will be live, as it remains unclear what the RBA has in store for the markets. The markets have priced in a second-straight 25-basis point hike, which would bring the cash rate to 2.85%, its highest level since April 2013. There is, however, a 20% chance that the RBA will hike by a steep 50 basis points, given that the Bank’s focus is on curbing inflation and the battle remains far from over. Headline inflation jumped to 7.3%, up from 6.1% in Q2, while core inflation hit 6.1%, up from 4.9%. The RBA expects headline inflation to peak at 7.5%, but other views have inflation rising as high as 8.0%. RBA Governor Lowe has caught the markets wrong-footed before – the 50 bp move in June was larger than expected, and the 25 bp in October was a surprise dovish pivot. This makes it tricky to predict the extent of the rate hike on Tuesday –  the markets are leaning heavily towards a 25 bp increase, but a 50 bp move should not be discounted. For the Federal Reserve, inflation is also a key concern. The Fed’s preferred inflation gauge, the PCE core index, rose to 5.1% in September, up from 4.9% a month earlier. That cements a 75 bp rate hike on Wednesday, even though there has been talk of the Fed easing up due to concerns about the economic outlook. . AUD/USD Technical AUD/USD is testing support at 0.6403. The next support level is 0.6283 There is resistance at 0.6532 and 0.6652 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

AUD/USD is down for a third straight day. The Australian dollar is trading at 0.6395, down 0.24%. Will RBA deliver a 0.50% hike? The RBA kicks off a busy week of central bank decisions when it meets on Tuesday. This will be followed by the Federal Reserve on Wednesday and the Bank of England on Thursday. The RBA has delivered a steep rate-tightening cycle this year and the upcoming meeting will be live, as it remains unclear what the RBA has in store for the markets. The markets have priced in a second-straight 25-basis point hike, which would bring the cash rate to 2.85%, its highest level since April 2013. There is, however, a 20% chance that the RBA will hike by a steep 50 basis points, given that the Bank’s focus is on curbing inflation and the battle remains far from over. Headline inflation jumped to 7.3%, up from 6.1% in Q2, while core inflation hit 6.1%, up from 4.9%. The RBA expects headline inflation to peak at 7.5%, but other views have inflation rising as high as 8.0%. RBA Governor Lowe has caught the markets wrong-footed before – the 50 bp move in June was larger than expected, and the 25 bp in October was a surprise dovish pivot. This makes it tricky to predict the extent of the rate hike on Tuesday –  the markets are leaning heavily towards a 25 bp increase, but a 50 bp move should not be discounted. For the Federal Reserve, inflation is also a key concern. The Fed’s preferred inflation gauge, the PCE core index, rose to 5.1% in September, up from 4.9% a month earlier. That cements a 75 bp rate hike on Wednesday, even though there has been talk of the Fed easing up due to concerns about the economic outlook. AUD/USD Technical AUD/USD is testing support at 0.6403. The next support level is 0.6283 There is resistance at 0.6532 and 0.6652 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie extends losses ahead of RBA meeting - MarketPulseMarketPulse

AUD/USD has slipped sharply to near 0.6420 for the second consecutive 25 bps rate hike An upbeat Caixin Manufacturing PMI data also supported the antipodean. The DXY has slipped to 111.30 as investors shrugged off uncertainty ahead of Fed policy. The AUD/USD has witnessed a steep fall to near 0.6420 pair as the Reserve Bank of Australia (RBA) has hiked its Official Cash Rate (OCR) by 25 basis points (bps) for the second time. The decision has remained in line with the projections and the Official Cash Rate (OCR) has increased to 2.85%. RBA Governor Philip Lower has preferred a less-hawkish policy approach to sustain economic prospects in accordance with the primary objective of brining price stability. This week, the Australian Bureau of Statistics reported the inflation rate for the third quarter at 7.3%, higher than the consensus of 7.0% and the prior release of 6.1%. Responses were mixed from economists on rate projections in between the continuation of a 25 bps rate hike as reported in October or a return to a 50 bps rate hike structure. In early Tokyo, aussie bulls were also strengthened by the release of upbeat Caixin Manufacturing PMI data. The economic data landed higher at 49.2 vs. the projections of 49.0 and the prior release of 48.1. It is worth noting that Australia is a leading trading partner of China and rising manufacturing activities in the dragon economy support antipodean. Meanwhile, the US dollar index (DXY) has witnessed a steep fall to near 111.30 as uncertainty ahead of the Federal Reserve (Fed)’s monetary policy has been shrugged off. S&P500 futures have rebounded in the Tokyo session after a bearish Monday. The 500-stock basket has recovered half of its Monday’s losses and is eyeing more gains ahead. Also, the 10-year US Treasury yields have dropped to 4.03%. As per the projections, Fed chair Jerome Powell will hike the interest rates by 75 bps for the fourth time as inflationary pressures haven’t shown evidence of exhaustion yet.

Yesterday, the Australian dollar once again tested the support of 0.6392 for strength, but at the same time, the resistance of 0.6453 was also tested, and the indicator line of the daily time scale was also tested. Settling under 0.6392 opens the target along the embedded line of the price channel at 0.6255. On a four-hour scale, the price is slightly above the support of 0.6392 and the MACD line. But weak Australian data released this morning prevents the price from exploiting its technical advantage. The index of manufacturing activity from AIG showed a decline in October from 50.2 to 49.6. Issuance of building permits decreased by 5.8% in September. The Marlin Oscillator, being a leading indicator, is developing in the downward trend area. Yesterday there was a reversal of the signal line of the oscillator from the zero line down. In general, we are waiting for the price to settle below 0.6392 and then move towards 0.6255.     Relevance up to 03:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/325986

AUD/USD has posted strong gains today. In the European session, the Australian dollar is trading at 0.6424, up 0.48%. The Australian dollar rose as much as 0.80% after the Reserve Bank of Australia raised rates by 25 basis points on Tuesday, but couldn’t consolidate and ended the day virtually unchanged. Lowe urges caution The RBA rate hike raised the cash rate to 2.85%, its highest level since April 2013. The RBA has raised rates by a steep 275 basis points since May but has now downshifted, with small increases of 25 bp in October and November. The slower pace is noteworthy because inflation remains red-hot. Governor Lowe said on Tuesday that he expected to raise rates further in order to tame inflation, and acknowledged that the central bank was on a “narrow path” which required “striking the right balance between doing too much and too little.” Inflation remains the RBA’s number one priority, even if the price is a recession. At the same time, Lowe is well aware that soaring inflation and high interest rates are taking a toll on businesses and households, and Lowe seems eager to limit rate increases to 0.25% or even pause, if possible. The RBA’s rate policy will be data-dependent, and so far the economy has shown that it can withstand steep tightening. Still, there are signs of a slowdown, such as in manufacturing. The October PMI slowed to 49.6, down from 50.2. This marks a third successive month of flat results, with readings close to 50.0, which separates expansion from contraction. All eyes are on the Federal Reserve, which winds up its 2-day policy meeting later today. The Fed is widely expected to hike rates by 0.75%, which would bring the benchmark rate to 4.0%. The Fed is likely to raise rates to 5% early next year, which means the tightening cycle will continue into 2023. Investors will be listening closely to Fed Chair Powell’s comments, looking for clues as to whether the Fed plans to ease in December, or will we see another 75 bp hike. . AUD/USD Technical AUD/USD continues to test resistance at 0.6403. Above, there is resistance at 0.6532 There is support at 0.6283 and 0.6196 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Summary:  The Powell Fed was probably hoping that it could fly under the radar at today’s FOMC meeting, giving itself the luxury of two more data cycles as inputs before providing fresh guidance and forecasts at the mid-December FOMC meeting. But no such luck, given the recent significant easing of financial conditions and yesterday’s very hot September jobs opening survey. FX Trading focus: Powell in the hot seat at tonight’s FOMC, needing to surprise hawkish The US September JOLTS jobs openings release yesterday was a shocker, as August data was revised up 250k and the September release was nearly a million more than expected at 10.72M. This jolted US yields and the US dollar back higher, keeping the greenback largely in the tactical neutral zone ahead of tonight’s FOMC meeting. It is the latest data point to suggest that the Fed will have a hard time pre-committing to any slowdown in the pace of its policy tightening after the 75-basis-point hike that is fully priced in for tonight. The December 14 FOMC meeting odds have not shifted much over the last couple of weeks, as investors still favor the idea of a downshift to a 50-basis-point hike at that meeting, followed by another 50 basis points of tightening early next year over the space of a couple of meetings. (An interesting psychological block for this market appears to be the 5.00% level for the Fed Funds rate – markets have been unwilling to project the Fed to hike above this level – which is about where we are now for the March-May FOMC meetings) As I outlined in yesterday’s update, if the Fed merely keeps quiet and endorses current expectations and punts on further guidance until December, we might see an extension of the melt-up in risk sentiment and see another wave of USD weakness. But yesterday’s JOLTS data point raises the odds that the Fed will want to push back against that outcome or at least against complacency on its potential policy path in general. To surprise hawkish today, Powell and company will have to make it very clear that the Fed is willing to continue tightening beyond current expectations. At the same time, that task will be difficult if they are reluctant to pre-commit to another large hike in December. One possible tactic to keep maximum forward potential for hawkishness would be for the Fed to indicate very high reactivity to further incoming data and openness to continuing with large hikes as long as necessary if the data supports doing so. It's hard to tell how the market would treat such a stance at tonight’s meeting if that is what the FOMC delivers, but in coming days and until the December 14 FOMC meeting, it would certainly mean extreme volatility on the next bits of Incoming data, starting with the ISM Services tomorrow and then especially the October jobs report this Friday. Then we’ll have the October JOLTS survey, the November jobs report, and the October and November CPI releases before that meeting. Chart: EURUSDEURUSD is perched between the important parity level to the upside and perhaps 0.9875-0.9850 support to the downside, an important level on the way up, awaiting today’s FOMC meeting. Downside risk for a test of the cycle lows below 0.9600 if the Fed manages to surprise hawkish and lift rate expectations, while we’ll have to close north of parity and see a continued improvement in risk sentiment and perhaps some weak US data through Friday to sustain a new upside leg. Bank of Japan minutes surprise. It’s been a while since we got a surprise from the BoJ, and normally we don’t look for them in the minutes, which are not released until after the following meeting. But last night’s minutes from the September BoJ meeting generated a few waves and JPY strength as they showed considerable signs of member discomfort with rising price pressures and even brought up the subject of an eventual policy shift, even if not suggesting one is imminent: one member said that “when the appropriate time comes, it’s important to communicate to markets an exit strategy”. This won’t sustain a JPY rally if US treasuries run back higher after the FOMC today and/or in the wake of the key US data through Friday. NZD strength getting stretched after the strong jobs report overnight extended the NZD rally against the Aussie and even keeping the currency near the top of the recent range versus the US dollar. Not sure how much more the little kiwi can get out of this run of strength here – a turn in broad sentiment could suddenly see vulnerability. The RBNZ is concerned about the impact on the policy tightening on the country’s financial system in its financial stability report released yesterday. I don’t see any meaningful ability for policy to diverge from here from Australia’s for example. Bloomberg put out an interesting article on the globally weather-stressed dairy industry. New Zealand is the world’s largest dairy exporter and combined, milk, beef, butter and cheese make up some 30% of New Zealand’s exports in physical goods. The article mentions climate-linked legislation possibly limiting future output – worth watching. Table: FX Board of G10 and CNH trend evolution and strength.CNH weakness still prominent, sterling’s relative strength fading, kiwi strength looking overdone and USD at maximum indecision here. Table: FX Board Trend Scoreboard for individual pairs.EURCHF making a bid at a reversal of the uptrend that was established more than four weeks ago if it drops through the 0.9850-0.9800 zone in coming days. Look at AUDUSD ready to possibly tilt lower again if the USD can get a leg-up post-FOMC. EURUSD is also close to flipping lower again after its uptrend attempt didn’t extend very far from its launching point, which was near the current rate. Upcoming Economic Calendar Highlights 1215 – US Oct. ADP Employment Change 1800 – US FOMC Meeting 1830 – US Fed Chair Powell Press Conference 2000 – New Zealand RBNZ Governor Orr before Parliamentary Committee 0145 – China Oct. Caixin Services PMI   Source: https://www.home.saxo/content/articles/forex/fx-update-pressure-mounts-on-fed-to-surprise-hawkish-02112022

The Reserve Bank of Australia duplicated its move of a month ago by raising the rate by 25 points to 2.85%, in line with economists' average expectations. This contrasts sharply with a 75-point rate hike from the ECB and expectations of similar moves from the Fed and Bank of England later this week. However, it is worth bearing in mind that the RBA makes rate decisions every month and globally does not lag. A solid trade surplus generates a natural flow of capital into the country, lowering rates. In addition, lower inflation in Australia compared to Europe or the US leaves the RBA with more room for manoeuvre. Abrupt rate hikes create shockwaves for the economy, while the ability to act more smoothly will put less pressure on the economy and return to growth more quickly when market conditions change. The slower rate hikes by the RBA early last month triggered a prolonged sell-off in the Aussie, which rewrote lows from April 2020, dropping to 0.6160 at one point. However, by the November meeting, players had already recalibrated their expectations. The AUDUSD had been gaining the previous two weeks and has remained on the plus side since the beginning of this one after a more than 13% collapse from August to mid-October. We have seen this kind of dynamic more than once on long-term reversals, as we witnessed in 2020 and before that in 2016 and 2009. However, uncertainty hangs over this bullish scenario in the form of market reaction to the Fed's rate decision comments coming out today. If they do not overturn the markets, the Australian dollar could continue to be in demand.

USDJPY seeks to recoverThe US dollar consolidates over growing expectations of a slower pace of tightening by the Fed. On the daily chart, the greenback is above the 30-day moving average and may continue to attract trend followers. The latest bounce came under pressure in the supply zone around 149.00, which means that the price action is still in a consolidation mode. 146.00 is the first support as the RSI ventures into oversold territory. Further down, 145.00 is an important level and its breach could trigger a deeper correction towards 143.00. AUDUSD hits resistanceThe Australian dollar softened after the RBA stuck with a mere 25 basis point rate hike. The pair has found strong support over 0.6200. Three consecutive failures to break lower by the bears indicate that the path of least resistance could be up. A series of higher lows contributes to the mounting buying pressure. 0.6370 is a fresh support and 0.6300 the bulls’ second layer of defence. October’s high and daily resistance 0.6530 is a key hurdle. Its breach would cause the short side to cover and trigger an extended rally towards 0.6660. NZDUSD follows rising trend lineThe New Zealand dollar slid after the Q3 unemployment rate fell short of expectations. A rising trend line indicates a strong bullish bias as the kiwi continues to recover. A break above the double top and daily resistance at 0.5790 prompted sellers to cover, easing the downward pressure. The rally then accelerated above 0.5880 after a brief consolidation with 0.5970 as the next target. The RSI’s overbought condition may cause a limited pullback. Buying interests could be expected near 0.5800 over the trend line.

Summary:  The Nasdaq 100 & S&P 500 drop after the Fed made hawkish remarks post lifting rates 0.75%. Fed says ‘we still have some ways to go’. It will make ‘ongoing increases’ until rates are ‘sufficiently restrictive’. Provided the upcoming economic data is strong, and shows the US economy is, the Fed can keep hiking. However, it could pivot as early as December. Until the next major US eco data release it seems equites could remain in risk-off mode, especially with high PE stocks, like tech, while defensive and commodity plays with rising cash flows could continue to garner interest. China’s Li signals a potential economic recovery, fuelling commodities and China’s markets. Crude oil rocks up after OPEC raised its forecast for oil demand. a2 Milk gets FDA green light. What is happening in markets? The Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) drop after Fed made hawkish remarks post lifting rates 0.75% US major indices dropped on Powell's hawkish comments. The S&P 500 shed 2.5% and the Nasdaq plunged 3.4% with megacap tech stock copping the brunt of the selloff with Apple (AAPL) down 3.73% and Tesla (TSLA) down 5.6% with the EV giant reportedly shutting its flagship showroom in China, in Beijing as it shift strategy. What prompted high PE stocks being sold off was that Treasuries yields rose across the curve, with the 10-years up 4 bps to 4.08%. The dollar reversed course and rose against every G-10 peer save the yen. So, the bottom line is, the market will now be contending with a risk-off tone, until the next US economic data sets prove the Fed can pivot. Oil moved higher, while corn and wheat dropped on grain-corridor developments. Elsewhere, Boeing (BA) shares rose 2.8% with the plane maker saying it could generate $10 billion in cash annually by mid-decade, once it turns around its operations after years of setbacks. Australia’s ASX200 (ASXSP200.1) futures suggest risk-off mode will be enacted with tech stocks on notice. Focus will be on milk Aussie tech stocks are likely to come under pressure with US bond yields rising again. However, there may be bright sparks today. Iron ore (SCOA) rose 0.4% sitting back above $80.85, which might support iron ore companies shares. That said, BHP closed 3.1% lower in NY. A2Milk (A2M) may garner attention after the US FDA gave approval for a2 Milk to be sold in the US. Bubs Australia (BUB) may likely 'piggyback' on any gains. That said, you could expect infant formula stocks to gain interest, particularly as China’s outgoing premier signal China is striving to build sustainable development. In other news; Rio (RIO) moved in on taking over a Canadian copper-gold company, Turquoise Hill Resources (TRQ). On Wednesday in Australia, Rio offered C$43 per share for the Canadian miner, saying that is its best and final offer. Rio is seeking to buy 49% of the Canadian miner, that it doesn’t already own, in a deal valued at around C$4.24 billion. Turquoise Hill Resources shares surged The Investor meeting to consider the takeover is set for November 8. Rio is also bidding to gain control of Mongolia’s Oyu Tolgoi, one of the world’s biggest copper mines. Crude oil (CLX2 & LCOZ2) rocks up after OPEC raised its forecast for oil demand   Oil rallied for several reason; firstly OPEC rose its forecasts for world oil demand in the medium to longer term, saying that $12.1 trillion of investment is needed to meet this demand. Second, an EIA report showed US gasoline inventories fell to the lowest since 2014 and East Coast distillate stocks slide to a record low seasonally, which intensifies supply concerns. Crude supplies also fell. Natural gas rose in the US and in Europe. Fed says ‘we still have some ways to go’; and it will make ‘ongoing increases’ until rates are ‘sufficiently restrictive’. What to watch next, what it means for equities Federal Reserve Chair Jerome Powell stuck to his campaign to bring inflation under control, saying “we still have some ways to go”, before rates were ‘sufficiently restrictive’ but the path may soon involve smaller hikes. Still, Powell sees it may be appropriate to make smaller hikes, as soon as December, or at the meeting after. But, he also said it was very premature to be thinking about pausing. After the Fed raised rates by 75 basis points on Wednesday, Powell said “incoming data since our last meeting suggests that ultimate level of interest rates will be higher than previously expected.” He also mentioned rate hikes have a lag effect on the economy, and the Fed needs to take this into account. This means, the devil will be in the detail ahead, as in the upcoming economic data which the Fed will respond to. Provided the upcoming economic data is strong, shows the US economy is, then the Fed can essentially keep hiking. For equites this means the risk-off mode in high PE stocks, like tech can possibly continue, inversely, defensive and commodity plays with rising cash flows might continue to garner interest. Saxo’s Head of FX Strategy says, so cue tomorrow’s ISM Services, Friday’s US jobs report, the October CPI due out next week, November 11 next week, and the November CPI report due December 12. China’s Li Keqiang signals a potential economic recovery, fueling commodities and China’s markets China’s outgoing premier Li Keqiang said China will strive for a "better" economic outcome and promote stable, healthy and sustainable development, saying China’s economy is showing signs of stabilizing, as well as “rebounding momentum" thanks to stimulus. This has supported gains in iron ore (SCOA) and also supported optimism in Asian equites. Australian lending and building approvals fall more than expected, giving the RBA greater cause to remain dovish. Keeping AUDUSD on notice House lending in Australia fell 8.2% in September (far more than the market expected) while building construction lending fell 36.6%, with the weaker data sets coming out just a day after the RBA remained dovish - rising Australia’s official cash rate by 25bps (0.25%) to 2.85%. On Tuesday the RBA acknowledged tighter financial conditions and the ‘full effect’ of increased interest rates are yet to be felt in ‘mortgage payments’, but the rate hikes since May, combined with higher inflation have already put pressure on household budgets. We believe the RBA could increasingly become dovish despite inflation running away to the upside. We think the RBA may be forced to potentially pause on rate hikes sooner, as they have done in history, despite peak inflation continuing to rise YoY. The AUDUSD remains under pressure for this reason. Plus until the Fed has reason to pivot the US dollar remains supported. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-3-nov-03112022

AUD/USD grinds higher around intraday top, pares the biggest daily loss in a week. Three-week-old ascending trend line defends buyers but 200-HMA is the key hurdle to win the fort. Fed’s Powell propelled US dollar, Aussie trade numbers initially failed to impress AUD bulls. Market sentiment remains dicey as traders lick post-Fed wounds ahead of US ISM Services PMI, NFP. AUD/USD seesaws near intraday high surrounding 0.6360 despite downside China PMI data during early Thursday. The reason could be linked to the early-day releases of Aussie trade numbers and the US dollar’s consolidation of the Fed-inspired gains. China’s Caixin Services PMI for October dropped to the lowest level in five months while flashing 48.4 figure versus 49.3 prior. Earlier in the day, Australia’s trade surplus increased to 12,444M In September versus 8,850M expected and 8,324M prior while the Exports rallied by 7.0%, compared to 2.6% prior. However, the growth of the Imports dropped to 0.4% versus 4.5% prior. Also challenging the Aussie pair buyers could be the escalating geopolitical tensions between North Korea and Japan join the risk-negative covid news from China to exert downside pressure on the sentiment. On the same line could be the Fed’s readiness for further rate hikes. That said, North Korea’s firing of missiles and Japan’s warning to residents weigh on the market’s risk profile, which in turn weighs on the risk barometer pair. On the same line could be the coronavirus fears from China as the lockdown surrounding the area involving the world’s largest iPhone factory defied hopes of easing the dragon nation’s zero-covid policy. Additionally, Reuters quotes China’s latest National Health Commission figures to suggest an uptick in coronavirus cases. The news states, “China reported 3,372 new COVID-19 infections on Nov. 2, of which 581 were symptomatic and 2,791 were asymptomatic.” However, a pullback in the US Dollar Index (DXY) from a one-week high to 111.90, mainly tracing the US Treasury yields should have defended the AUD/USD buyers. It should be noted that the US 10-year bond coupons ease to 4.096% while its two-year counterpart snaps a four-day uptrend as it drops to 4.611% at the latest. Moving on, the US ISM Services PMI bears the downbeat forecasts of 55.5 for October compared to 56.7 previous readings and appears important for near-term AUD/USD moves. Following that, Friday’s US Nonfarm Payrolls (NFP) will be the key, mainly due to the strong ADP data. Technical analysis AUD/USD pair bounces off a three-week-old ascending trend line while posting the recent gains. However, the bearish MACD signals and a clear downside break of the 200-HMA keep the sellers hopeful unless the quote crosses the 0.6405 hurdle. Even if the quote rises beyond 200-HMA, the weekly resistance line near 0.6430 could act as an extra filter to the north before welcoming the bulls. Meanwhile, a downside break of the immediate support line, close to 0.6325 at the latest, could quickly drag the AUD/USD prices towards the late October swing low of around 0.6210. Following that, a downward trajectory towards the previous monthly low, also the yearly bottom, surrounding 0.6170, will be in focus. AUD/USD: Hourly chart Trend: Limited upside expected

This morning the Reserve bank of Australia raised the rate from 2.60% to the expected 2.85%. The Australian dollar did not react to the event, its growth in the morning is connected to a greater extent with the general correction of currencies after yesterday's fall. The aussie lost 60 points yesterday. On the technical side, the correction is caused by a reversal of the signal line of the Marlin Oscillator from the zero line. But this reversal is weak - raw materials are not growing, stock indices are declining. We are waiting for the development of support at 0.6255 – the price channel line, and here the medium-term direction of the price will be decided. The bears have the advantage in choosing scenarios, since the momentum after a double reversal from the MACD indicator line of the daily chart on October 27 and November 2 has not yet dried up. With surpassing 0.6255, the 0.6195 target will become available - the underlying line of the price channel. The four-hour chart shows a typical correction within a confident trend decline, albeit a local one. Probably, this correction or consolidation will be completed with the release of the US employment report in the evening. The forecast for Non-Farm Employment Change is 200,000, which is generally a good indicator.     Relevance up to 04:00 2022-11-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326224

AUD/USD continues to show strong volatility and is sharply higher today. In the European session, the Australian dollar is trading at 0.6338, up 0.81%. This follows losses of almost 1% on Thursday. RBA sees lower growth, higher inflation The RBA monetary policy statement was gloomy, with a warning that tough times lie ahead for the Lucky Country. The central bank is projecting a GDP of 3% over 2022, slowing to 1.5% in 2023. Inflation is expected at 4.75% over 2023, higher than the 4.25% pace in its previous policy statement. The forecasts are based on the cash rate peaking at 3.5% in mid-2023. The RBA raised the cash rate to 2.85% earlier this week, with a 0.25% hike, and Governor Lowe said that the central bank was on a “narrow path” that required “striking the right balance between doing too much and too little.” The RBA finds itself in a pickle, as its steep tightening cycle is slowing growth and hurting businesses and households. At the same time, inflation remains red-hot at 7.3%, fuelled by high food prices. Inflation remains the RBA’s number one priority, but it has eased up on the size of the hikes, hoping that inflation will peak shortly and a recession can be avoided. The week wraps up with the US nonfarm payrolls report, which has been overshadowed by Fed meetings and inflation releases. Still, the release is carefully watched by Fed policymakers and today’s data will be a factor in the December rate decision. The October consensus stands at 200,000, lower than the September reading of 263,000. With the markets split 50/50 on whether the Fed will raise rates by 0.50% or 0.75%, the NDP could provide some volatility in the currency markets in the North American session.   AUD/USD Technical There is resistance at 0.6403 and 0.6532 There is support at 0.6283 and 0.6196 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The outcome of the Fed meeting continues to influence world markets. However, there is a high chance that another local decline will be seen in the stock markets, while the dollar will have a new wave of strengthening. This is because the latest inflation data is coming, as well as the employment report in the US. Earlier, analysts have pointed out that the Fed will continue its aggressive rate hike if the US economy slide into recession despite the labor market having a good condition. The central bank signaled the same thing, saying that a strong labor market and economy near the edge of a recession will allow them to fight inflation vigorously. This means that if the US jobs report for October exceeded expectations, the Fed will raise rates again by 0.75%, if necessary. That is why it is better to be cautious and moderately optimistic about the end of the bear market in the equity markets. As mentioned above, there is still a possibility of a new fall in stock indices, which will once again be accompanied by a rise of dollar. This is further evidenced by the dynamics of treasury yields, which are still close to local highs. Forecasts for today: EUR/USD The pair is trading above 0.9750. If the US employment data turn out to be higher than expected, the quote will fall to 0.9650. AUD/USD The pair is above 0.6335. Further selling pressure will push it to 0.6250.     Relevance up to 07:00 2022-11-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326248

Summary:  The FOMC meeting this week forced the market to adjust to the idea that the Fed could continue to take rates higher than had previously been priced. But clearly, to drive tightening expectations higher still, we’ll need to continue to see hotter than expected US data, with today’s US jobs report the next test on that. Elsewhere, sterling is in a world of hurt after BoE’s very dovish guidance. FX Trading focus: US incoming data focus after hawkish FOMC. BoE in dovish pushback against market hike expectations. The US dollar followed through stronger yesterday on the momentum off the back of the hawkish Powell presser Wednesday, but has come in for a chunky reversal overnight and today since a somewhat softer than expected ISM services survey yesterday (nudged lower to 54.4 vs. 55.3 expected and 56.7 in September, with the employment sub-index dipping back below 50 at 49.1 vs. 53.0 in September). Wouldn’t it be ironic if we also were to get a soft US jobs report today that takes US yields back to their starting point of the week, making Powell’s hawkish message so much noise, at least until the next incoming data point jerks the market the other way? Interestingly, the USD is selling off ahead of today’s US data releases even as short US yields are posting new highs for the cycle Specifically in today’s jobs report, in addition to any strong directional surprise in payrolls (multi-month grain of salt needed with this data series, as single releases require further corroborating evidence), we should keep both eyes on the average hourly earnings survey. Arguably, if we get the expected 0.3% month-to-month average hourly earnings print today after a couple of prior prints of a similar size, observers may begin to judge that the annualized rise in earnings is beginning to look far less threatening at sub-4.0%. The year-on-year is expected to drop to a 15-month low of 4.7% today. A significant upside surprise in earnings is perhaps could generate significant volatility. Chart: EURGBPWorth considering how the dovish Bank of England meeting yesterday (see more below) is weighing heavily on sterling, as it should, with the Bank of England reluctant to signal much tightening energy when it sees an incoming recession. Sterling is down sharply across the board, with EURGBP suddenly well backed up within the old range and now far away from the sub-0.8600 range support. The next area between the 0.8800 and pivot high of 0.8870 area looks key for whether sterling weakness is set to become a bit more unhinged, and the next key event-risk test is likely how the market greets an austere Autumn budget statement on November 17. Bank of England wrap. The BoE hiked by 75 bps to 3%, as most expected and as was mostly priced in, but Bailey and company strongly pushed back against expectations for the scale of future moves, saying that the terminal rate priced in currently by the markets would induce a two-year recession. There were also two dovish dissenters at the meeting, one calling for 50 bps rate hike and another for a mere 25 bps. New forecasts were also released, which gave a particularly grim outlook for the economy, looking for a GDP print of -0.5% QoQ in Q3 2022 vs -0.1% expected in September. The inflation forecast now shows a peak around 11% in Q4, which is marginally hotter than the prior meeting’s projection. Sterling was crushed lower, having already fallen heading into the meeting, and it speaks volumes that even though the BoE pushed back against the forward implied expectations for further tightening, which it said would trigger a 2-year UK recession, the market did not budge those expectations. In short: the market refuses to acknowledge what the BoE thinks it might do, probably figuring that the BoE will have no choice due to sterling weakness but to pursue the path to 4.50% or higher rates before mid-next year. I was surprised by the lack of discussion or journalist questioning in the press conference around the risk that currency weakness drives worse inflationary outcomes if the BoE fails to do as much as the market is pricing. Sterling remains in a heap of trouble. Table: FX Board of G10 and CNH trend evolution and strength.The USD needs to stick the move off the back of the FOMC meeting after the US jobs data today, otherwise we’ll suddenly be back to square one. The hottest movement in FX was clearly the sterling sell-off yesterday on a very clearly dovish Bank of England meeting. CNH is making waves on a lot of movement overnight and noise (unconfirmed) of an eventual opening up. Table: FX Board Trend Scoreboard for individual pairs.While the US dollar flipped to a positive trend in many places, we must still consider the risk that incoming data complicates the plot. GBP is already registering a negative trend in many new GBP pairs after yesterday’s BoE meeting. Interesting that the NOK failed to roll over to the downside in a couple of key pairs after the small hike from the Norges Bank yesterday. Upcoming Economic Calendar Highlights 1215 – UK Bank of England Chief Economist Huw Pill to speak 1230 – US Oct. Nonfarm Payrolls Change 1230 – US Oct. Unemployment Rate 1230 – US Oct. Average Hourly Earnings 1230 - Canada Oct. Unemployment Change/Rate 1400 – Canada Oct. Ivey PMI 1400 – US Fed’s Collins (Voter 2022) to speak Source: https://www.home.saxo/content/articles/forex/fx-update-us-incoming-data-sterling-pays-price-after-dovish-boe-04112022

AUDUSD licks its wounds after a downbeat start to the week. Oscillators suggest further downside, weekly resistance line challenge buyers. Fortnight-old horizontal support region restrict short-term AUDUSD downside. Buyers need validation from October’s peak to retake control. AUDUSD remains defensive around 0.6430 after reversing from the 200-HMA support heading into Monday’s European session. Even so, the Aussie pair remains below a weekly resistance line amid bearish MACD and RSI signals. As a result, the quote is likely to witness further downside, which in turn highlights the 200-HMA support near 0.6410. Following that, the 50% and 61.8% Fibonacci retracement levels of the AUDUSD pair’s October 21-27 advances, respectively near 0.6370 and 0.6330, could probe the downside moves. In a case where the AUDUSD prices remain weak past 0.6330, a two-week-old horizontal support zone near 0.6270 will be crucial for sellers to watch as a downside break of the same could probe the yearly low surrounding 0.6170. Meanwhile, recovery moves need a successful break of the aforementioned weekly resistance line, close to 0.6475 at the latest. Even if the AUDUSD price remains firmer past 0.6475, the pair buyers may wait for a clear upside break of the previous monthly top surrounding 0.6550 to please the buyers. That said, the 0.6500 round figure may offer an intermediate halt during the run-up. AUDUSD: Hourly chart Trend: Further downside expected

The previous week was rich in all sorts of events and economic statistics, which increased uncertainty in markets. First of all, there was the decision of the Federal Reserve regarding its monetary policy, which continued to be hawkish, as perceived from Jerome Powell's speech. The Fed chief once again broke expectations that the bank would begin to gradually ease the rate hikes in order to analyze its impact on the national economy. Another highlight was the data from the US labor market, which showed a steady increase in the number of new jobs at 261,000 in October against the forecast of 200,000. All these were very important as investors are monitoring the monetary policy in the US. They are trying to understand how the Fed will act in the near future, more specifically if the bank will continue its aggressive cycle of raising interest rates or not. The former will signal if rates will rise above 5%. This week, the data on US inflation will come out, which is expected to be 0.7% higher in October, against the September growth of 0.4%. Its year-on-year value, however, will correct from 8.2% to 8.0%. If the report coincides with expectations or come out higher, the Fed will continue its aggressive rate increase, which will push the value above 5%. This will keep markets bearish. But if the figure indicates a slowdown in the growth of consumer prices, stocks will rise, while dollar will weaken. Also ahead is the result of the midterm elections in the US. It is assumed that the unconditional victory of Republicans will change not only the current political course, but also the economic one. Even so, it is difficult to say how this will affect markets, so be cautious when trading. Summing this all up, negative sentiment prevails among Fed members and the market as a whole, which can put pressure on stocks, while raising up dollar. Investors are obviously not convinced that inflationary pressure in the US will end by the end of year, or show even a small but steady decline. In this situation, dollar may once again put pressure on major currencies, while treasury yields will resume growth. Forecasts for today: AUD/USD The pair shows weakening growth, influenced by the weak data on exports and imports, as well as the trade surplus in China. The Australian economy is closely linked to Chinese imports and if market sentiment is generally negative today, the pair could drop to 0.6290 after breaking 0.6400. GBP/USD The pair is trading above 1.1270. Deterioration of market sentiment ahead of the congressional election result in the US, as well as caution before the publication of inflation data, may put strong pressure on the pair. A price drop below 1.1270 will only exacerbate this likely fall.     Relevance up to 08:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326370

AUD/USD is almost unchanged today, after sharp gains on Friday. In the North American session, AUD/USD is trading at 0.6470, down 0.02% on the day. Aussie soars after nonfarm payrolls  The US dollar declined against all the major currencies on Friday, after a mixed nonfarm payrolls report left investors in a dovish mood. The October reading of 261,000 was down from the previous reading of 315,000 and marked the smallest gain since December 2020. The unemployment rate rose to 3.7%, up from 3.5%, while wage growth rose to 5.5% YoY, up from 5.2%. The latter release is likely to keep the Fed concerned about inflationary pressures. Investors are expecting that the labor market will continue to soften and that the Fed will lean toward a 50 basis point hike rather than 75 bp, and this sent the dollar sharply lower after the NFP report on Friday. Still, with the Federal Reserve expected to raise rates to 5% or even higher next year, I expect the US dollar to remain attractive to investors. The RBA is treading carefully, as seen with its modest hike of 0.25% last week. Governor Lowe said that the central bank was on a “narrow path” that required “striking the right balance between doing too much and too little.” The RBA finds itself in a pickle, as its steep tightening cycle is slowing growth and hurting businesses and households. At the same time, inflation remains red-hot at 7.3%, fuelled by high food prices. Inflation still remain the RBA’s number one priority, but it has eased up on the size of the hikes, hoping that inflation will peak shortly and a recession can be avoided. The RBA monetary policy statement was gloomy, with a warning that tough times lie ahead. The central bank is projecting a GDP of 3% over 2022, slowing to 1.5% in 2023. Inflation is expected at 4.75% over 2023, higher than the 4.25% forecast in its previous policy statement. The forecasts are based on the cash rate peaking at 3.5% in mid-2023. AUD/USD Technical There is resistance at 0.6549 and 0.6631 There is support at 0.6411 and 0.6329 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar rally takes a breather - MarketPulseMarketPulse

The Australian dollar managed to overcome the resistance of the MACD indicator line on the daily chart. Today it opened above this line. Now the price will try to master the target range of 0.6514/32. If it is overcome, then the next target will be the level of 0.6592. The daily Marlin Oscillator is in the neutral position, and it reached a reversal level on October 27 and August 12 (0.0185 on the indicator scale), which increases the psychological tension in connection with the upcoming US Congressional elections today. On the four-hour chart, the price is above the indicator lines, Marlin is in the positive area and shows the intention to develop a sideways movement. In general, the expectation is positive, that is, the market is preparing to meet the victory of the Republicans. But we are not in a hurry with such expectations, so we just follow the course of events.     Relevance up to 03:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326458

The Australian dollar has posted sharp gains, as the US dollar is lower against the majors in the North American session. AUD/USD is trading at 0.6542, up 0.97%. Business confidence slows to zero Australia’s NAB Business Confidence for October slipped to zero, down from 5 points in September. The significant decline is reflective of a drop in orders, higher rates at home and a gloomy global negative outlook. The soft data comes on the heels of Westpac Consumer Sentiment, which plunged by 6.9% to 78 points, its lowest level since April 2020, when the Covid pandemic had just started. Inflation is galloping at a 7.3% clip, China’s economy is weakening and the energy crisis in Europe is likely to worsen in the winter. These headwinds are not about to go away, which does not bode well for the Australian economy. The Australian dollar has fallen sharply in 2022, although we’re seeing a rebound, with gains of 2.9% on Friday, courtesy of the US nonfarm payrolls, and strong gains today as well. The US dollar’s decline on Friday and again today are against all the majors, which means that this is a case of US dollar weakness rather than Australian dollar strength. I would be surprised if the Aussie can hold onto these recent gains, as the currency faces plenty of headwinds. In the US, the midterm elections are being held today, which is widely being viewed as a referendum on President Biden’s performance. The economy is giving mixed signals and Biden’s popularity is sagging, which could result in the Republicans taken control of both the House and the Senate. If the Republicans grab either one, it will translate into deadlock in Washington and a weakened President Biden. The election could move the US dollar if we see a Democratic surprise or a clean sweep by the Republicans. AUD/USD Technical AUD/USD is testing resistance at 0.6545. Next, there is resistance at 0.6631 There is support at 0.6411 and 0.6329 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. AUD/USD resumes rally with massive gains - MarketPulseMarketPulse

AUDUSD prints mild losses around six-week high, snaps three-day uptrend. Fears of US government gridlock, pessimism surrounding China’s covid conditions and softer inflation data weigh on prices. Risk appetite remains sluggish ahead of the key data/events, bears are likely to retake control. AUDUSD aptly justifies its risk-barometer status as it prints the first daily loss, so far, in four days amid political and/or covid updates. That said, the Aussie pair remains depressed around 0.6490, mildly offered heading into Wednesday’s European session. A tug-of-war between the Republicans and Democrats has so far failed to provide any meaningful signals for the mid-term elections. Even so, fears of a government gridlock keep the sentiment sour of late. Also weighing on the market’s risk appetite are the fresh virus-led lockdowns in China and the multi-month high covid numbers. Recently, China reports the highest levels of new COVID cases in six months, with the latest addition of 8,335 for November 08, while marking a fresh virus-led lockdown in Guangzhou’s second district. Elsewhere, fresh pick-up of the US Treasury yields and the latest fall in the S&P 500 Futures, after hearing the fresh victory of John Fetterman, a Democrat, of the race for Senate in Pennsylvania. It should be noted that the downbeat China inflation figures for October teased bears earlier in Asia. To sum up, the risk-off mood and a light calendar ahead of Thursday’s Consumer Price Index (CPI) keep AUDUSD bears hopeful. Technical analysis AUDUSD retreats from a convergence of the 50-DMA and a five-week-old resistance line, around 0.6510, which in turn joins the recently bearish MACD signal to tease bears targeting the 21-DMA support near 0.6370.

The Australian dollar is in negative territory today after an impressive rally. AUD/USD is trading at 0.6487, down 0.27%. US dollar steadies after selloff The US dollar has been in retreat since Friday, after a mixed nonfarm payroll report raised the likelihood of the Fed easing up in December and raising rates by just 0.50%, rather than 0.75%. The Australian dollar took full advantage of the US dollar selloff, rising over 200 points in a 3-day rally. AUD/USD rose to a 6-week high on Tuesday, but it’s hard to see the US dollar continuing to weaken much further. The Federal Reserve is sticking to its hawkish script and said at last week’s meeting that the terminal rate would be higher than previously anticipated. As well, with a gloomy global outlook, risk appetite will be under pressure, making the US dollar more attractive to investors. The Australian dollar faces other headwinds as well. China, Australia’s largest trading partner, is experiencing a slowdown as the country is yet to exit its strict zero-Covid policy. The RBA has eased up on rates, with two straight hikes of just 0.25%, even though inflation hasn’t shown signs of peaking. With the Fed expected to deliver hikes of 0.50% or 0.75%, the US/Australia rate differential is widening, which will weigh on the Australian dollar. The US midterms remain inconclusive, with tight races in both the House and the Senate. The Republicans were expected to easily take the House, but the race is tighter than expected. The Senate may not be decided for weeks if a runoff is required in Georgia. Any fluctuations in the currency markets are likely to be short-lived, with investors looking ahead to Thursday’s CPI report. . AUD/USD Technical There is resistance at 0.6549 and 0.6631 AUD/USD has support at 0.6411 and 0.6329 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Bio

Summary:  Market sentiment improved further yesterday before dipping slightly overnight, as China Covid cases are on the rise, pushing back against hopes for a lifting of Covid restrictions. In the US mid-term elections, Democrats are slightly outperforming expectations, possibly set to retain control of the Senate even if Republicans look set to take narrow control of the House of Representatives. FX Trading focus: Next test for struggling USD over tomorrow’s US CPI data. The US mid-term election results are still rolling in this morning in Europe, with the Republicans set to take a small majority in the House and the Senate outcome looking at risk of riding on the outcome of a Georgia run-off election on December 6th as neither candidate looks set to achieve the 50% required for elections there. Remember that we had a similar setup after the 2020 election when two Senate races in Georgia were only decided in a January 5 run-off. There are no real market conclusions from the outcome, even if the Georgia race gives the Republicans a majority in the Senate, as the only scenario that would have guaranteed dramatic potential for fiscal policy would have been the Democrats surprisingly retaining both houses. Other conclusions: Trump is a liability for the Republican party, which likely would have done far better without his involvement, and forensic studies of split-ticket voting will likely confirm this, and it will be interesting to see if this deters his possible renewed ambitions for the presidency. Finally: razor thin Georgia results keep alive the narratives around election fraud, etc. Can the US move beyond its dysfunctional elections by 2024 or will the republic face an existential test in that election cycle? Back to incoming data, with tomorrow’s US October CPI in focus. Let’s recall that the September CPI data point was a real shocker as many qualified slicers and dicers of the data were looking for a deceleration in the core data rather than the acceleration we got. That has me leaning for a slightly softer release tomorrow. But I am far more interested in the nature of the market reaction. As I have discussed the last couple of days on the Saxo Market Call podcast, I find the most interesting test for the US dollar one in which we see inflation decelerating and US treasury yields perhaps easing a bit lower, but in which we also see risk sentiment weak as equity and bond markets are starting to decouple, as equities begin to fret recession rather than being merely led around by the nose by the treasury market. If that is the scenario we get and the USD weakens, then I think USD weakness can extend a bit more forcefully for a time, if not, then the USD could yet reject this breakdown attempt. I withhold judgement for now, as the USD has not yet broken down. But the easiest thing to do is to simply judge what happens on the charts in the wake of the data release (not knee-jerk, but how the day closes), as we have a number of clear-cut levels in play for the major USD pairs. Chart: USDJPY USDJPY has traditionally been a strong focus over US data surprises over the years and will be in focus with the macro event risk of the week, if not the month, coming up tomorrow in the form of the US October CPI release. Reaction in yields and risk sentiment are both worth watching as I have cooked up some thoughts of late (see above) on whether US treasury markets and equity markets could move out of correlation, i.e., that risk sentiment may have a hard time celebrating a drop in treasury yields. So, a weaker than expected US CPI report together with falling treasury yields, but also together with weak risk sentiment could provide the strongest support for the JPY here in a broad sense, though it might be felt more forcefully in JPY crosses. Regardless, if the JPY finds bids tomorrow, the 145.00 level will be a huge focus in USDJPY. Table: FX Board of G10 and CNH trend evolution and strength.The USD is clearly down, but will only be out on sticking further weakness in the wake of the US CPI release tomorrow. Elsewhere, note the sterling momentum turning badly south and SEK trying to look higher, not a surprise given European equities having rallied vertically for weeks – looking a bit much. Table: FX Board Trend Scoreboard for individual pairs.EURGBP is one to focus on around the 0.8800 level. JPY crosses are interesting in places as well as yields have consolidated a bit lower – look at the 165 area in GBPJPY, for example. But it is all about key USD levels after the US data tomorrow, including 1.0100 in EURUSD, 0.6522 in AUDUSD, etc… Upcoming Economic Calendar Highlights 1200 – Mexico Oct. CPI 1300 – UK Bank of England’s Haskel to speak 1530 – EIA's Weekly Crude and Fuel Stock Report 1630 – UK Bank of England’s Cunliffe to speak 1700 – World Agriculture Supply and Demand Estimates (WASDE) 0001 – UK Oct. RICS House Price Balance 0100 – US Fed’s Kashkari (Voter 2023) to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-on-edge-ahead-of-the-us-cpi-data-tomorrow-09112022

The Australian dollar is now confidently losing its positions after a rapid rise to the middle of the 65th figure. On Monday, the aussie hit a new 2.5-month price high, but failed to settle above the upper line of the Bollinger Bands indicator on the daily chart, which corresponds to 0.6550. In general, AUD/USD bulls owe their fleeting success solely to the US currency. The temporary weakening of the greenback allowed the bulls to seize the initiative and develop a corrective 250-point growth. But the current situation has a reverse side of the coin: as soon as the dollar "came to its senses", the aussie was forced to follow it. The aussie does not have its own arguments for a counteroffensive, so going long on the pair looks a priori more risky than selling. For all its problems, the US currency has its "constant" advantages over the aussie, which are primarily expressed in the uncorrelation of the Federal Reserve and Reserve Bank of Australia rates. While the RBA slowed down the pace of monetary policy tightening back in September, the Fed is still hesitating on this issue. Moreover, the US central bank, following the results of the last meeting, announced that the current rate hike cycle will end at more distant positions relative to previous forecasts. In layman's terms, this means that the Fed will step over the 5% mark, raising the rate to at least 5.25%. Therefore, the very fact of slowing down the rate of increase in this case plays a secondary role, especially in the context of the AUD/USD pair. Let me remind you that after a series of 50-point hikes, the Australian central bank slowed down, and at the two previous meetings (in September and November) it raised the rate in 25-point increments. RBA Governor Philip Lowe said that the central bank's board "considered it appropriate to raise rates at a slower pace." Moreover, commenting on the results of the November meeting, he noted that the members of the central bank discussed, among other things, the consequences of refusing to raise rates. Thus, he allowed a pause in the process of tightening monetary policy. And although it is too early to talk about this at the moment, the results of the last RBA meeting disappointed AUD/USD bulls. The aussie dropped sharply, reaching 0.6275. And if the US currency had not weakened throughout the market, the pair would have systematically plunged to the area of the 60th figure. The fundamental picture of the AUD/USD pair is now distorted by political factors. The midterm elections to the US Congress, following which the Republicans are definitely winning the lower house from the Democrats (the fight for the Senate is still ongoing), put pressure on the greenback. But, as a rule, political factors flare up brightly, but fade quickly. Therefore, longs for the AUD/USD pair should not be trusted: in the very near future, the market will switch to "classic" fundamental factors, especially considering Wednesday's release. Let me remind you that key data on the growth of inflation in the United States will be published on Thursday. According to preliminary forecasts, the general consumer price index in October increased by 8.0% (y/y), and the core index – by 6.5% (y/y). Even if all components come out at the predicted level, the dollar may significantly strengthen its position, as the growth of inflation will demonstrate an extremely weak rate of slowdown. If the inflation report turns out to be in the green zone, we may witness another dollar rally, including for the AUD/USD pair. However, some other fundamental factors also play in favor of the bearish scenario. For example, the latest news from China does not contribute to the development of the upward movement. This week it became known that China's trade surplus increased to $85.15 billion (from $84.74 billion), while market expectations were at $95 billion. Also, China denied rumors that the authorities may weaken the strictest measures to counter the spread of coronavirus. According to representatives of the National Health Commission of the People's Republic of China, Beijing's "zero tolerance" approach to the coronavirus remains the main strategy for combating COVID-19. Australia is China's largest trading partner, so this information plays against the aussie. From a technical perspective, AUD/USD bulls could not overcome the upper line of the Bollinger Bands indicator on the daily chart, which corresponds to the 0.6550 mark. At the same time, the price is located under the Kumo cloud on the D1 timeframe. The pair will still retain the potential to decline, at least to the 0.6360 mark: at this price point, the average line of the Bollinger Bands indicator coincides with the Kijun-sen line. This is an intermediate support level, while the main price barrier is still the 0.6200 mark - this is the lower line of the Bollinger Bands indicator on the same timeframe.   Relevance up to 17:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326689

So, the Australian dollar, as we expected, completed a false exit above the MACD indicator line on the daily chart. Yesterday, after re-working out the target range of 0.6514/32, the price went under the target level of 0.6453, now it is approaching 0.6392. There are no price barriers along the way. Further, after settling below 0.6392, the price may move to the nearest price channel line to the level of 0.6211, the low of October 21st. On the four-hour chart, the price settled below the MACD line yesterday, Marlin is falling in negative territory at a classic 45-degree angle, the short-term downward trend can be called stable. The aussie's fall is supported by adjacent markets. Oil is getting cheaper by 0.1% in today's Asian session, tomorrow the UK is expected to release a weak GDP for the 3rd quarter. Relevance up to 03:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326711

Risk appetite noticeably fell this Thursday morning. The S&P 500 already lost more than 2% the previous day, while stock markets in Asia-Pacific countries traded in the red zone. Europe is also likely to open lower, which can not be said to government bond yields as it showed somewhat higher stability. 10-year US Treasures stayed above 4%, confidently indicating an increase in the risk of stagflation. Part of the reason why risk appetite decreased is the preliminary results of the US elections, according to which the Republicans will receive a majority in the House of Representatives and thus be able to influence the government's budgetary policy. There is still no clarity on the Senate, as the state of Georgia will hold a second round, scheduled for December 6. The second factor is the increase in the number of Covid patients in China, which reduces the likelihood of lifting restrictions. Today, the focus will be on the US inflation report, which has a base rate forecast of +6.5%, slightly below September's 6.5%. It is very important because if inflation does not show at least some signs of slowing down, then Fed rate forecasts could rise to 6% for 2023, which will increase panic and push up demand for dollar. Conversely, a data release of 6.5% or lower could dampen anti-risk sentiment slightly and boost demand for commodity currencies. NZD/USD Inflationary momentum in New Zealand remains strong and there is no slowdown yet. But the labor market is very stable, thanks to the very large decrease in the number of workers dropping out of the labor force. Another record performance for the 3rd quarter is the growth in average hourly wages, which in the private sector grew by 8.6% y/y. It is expected that by the end of the year, this figure will exceed 9%, which leaves the RBNZ no choice but to raise rates higher. The latest RBNZ survey on inflation expectations showed that inflation is expected to reach 5.08% in 1 year versus 4.86% in September. Then, it will return to 3.62% in 2 years versus 3.07% earlier. Obviously, inflation expectations continue to rise even though the RBNZ is raising rates quite aggressively. The ANZ Bank predicts that the rate will be raised to 5% in February, then peak in the end of 2023, which looks more aggressive than the Fed's policy, and will contribute to the growth of the yield spread in favor of the kiwi. But if prices for dairy products continue to drop, NZD will halt growth. That, however, is quite unlikely as a peak in stocks of dairy products has been formed and a reduction in production is expected, which will help support prices. According to reports, NZD net short position decreased for the second week in a row. There is a bearish advantage of -0.22 billion, but the estimated price turned up, increasing the probability of a bullish correction. Kiwi broke through the resistance level of 0.5866. In case of a rebound, support will be found in 0.5810/20, while resistance will be in 0.5960 (23.6% retracement level of the fall since February 2021). AUD/USD The consumer sentiment index reportedly fell 6.9%, from 83.7 in October to 78.0 in November. Obviously, inflation in Australia continues to grow, reaching 7.3% in the 3rd quarter against 6.1% earlier. Forecasts suggest further inflation growth. This is why the Australian government is very careful in making changes to tax policy. Rate forecasts are also rising to a higher level, which leads to a drop in consumer spending. There is also a marked decrease in labor market confidence, as well as in the possibility of buying a home. In terms of positioning, the latest data says net short position in AUD decreased by 0.1 billion over the reporting week. The bearish advantage remains, with the estimated price being below the long-term average and is directed downwards. Although the trend is bearish, there will be attempts of upward correction. Support is at 0.6320/30, while resistance is at 0.6510/30. But trading will move into a side channel, the exit from which is more likely down. When trying to grow to 0.6510/30, traders must sell first in order to return the quote to 0.6320/30. However, there is no reason yet to expect a full-fledged bullish reversal.   Relevance up to 07:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326725

The Australian dollar has extended its losses today. AUD/USD is trading at 0.6412, down 0.29%. The US dollar has rebounded after a 3-day slide, which saw the Australian dollar climb over 200 points. The Aussie has coughed up half of those gains since Tuesday, and we could be in for further volatility in today’s North American session, as the US releases the October inflation report. Investors are somewhat confused, thanks to mixed signals from both the Federal Reserve and last week’s US employment report. The Fed meets next in mid-December, and it’s close to a toss-up as to whether the Fed will raise rates by 0.50% or 0.75%. At the last meeting, at which the Fed hiked by 0.75%, Fed Chair Powell hinted at easing up on rates but also said that the terminal rate would likely be higher than previously expected – this mixed message makes it difficult to peg the Fed as being hawkish or dovish. US inflation expected to remain hot Last week’s employment report was mixed, as unemployment and wage growth climbed, while nonfarm payrolls fell but still exceeded expectations. This makes today’s inflation report all the more important for the Fed ahead of the December meeting. A hot inflation report would likely boost the likelihood of a 0.75% hike, which would be bullish for the US dollar. CPI is expected to dip to 8.0%, down from 8.2%, which although a slight improvement, would indicate that inflation remains very high. Australia is also dealing with high inflation, and Melbourne Institute Inflation Expectations for October reinforced concerns that inflation is yet to peak. Inflation Expectations rose to 6.0%, up sharply from 5.4% in September, and the first acceleration in four months. The economy is showing signs of slowing down, and a report from the National Australian Bank on Wednesday projected that GDP would fall to 0.8% in 2023 and interest rates would peak at 3.6% next year. The cash rate is currently at 2.85%, which means that the RBA is likely to continue raising rates into 2003.   AUD/USD Technical AUD/USD is testing resistance at 0.6411. Above, there is resistance at 0.6549 There is support at 0.6239 and 0.6196 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

AUDUSD picks up bids to pare intraday losses around seven-week high. China reports the biggest jump in daily coronavirus cases since April. The US Dollar licks US CPI-led wounds amid sluggish yields. Receding hawkish bets keep the greenback bears hopeful ahead of US Michigan CSI data. AUDUSD consolidates intraday losses around 0.6630, the highest levels since late September, as the market’s cautious optimism contrasts with the risk-negative headlines from China during early Friday. That said, the Aussie pair rallied the most since October 2011 the previous day before the bulls took a breather amid a lack of major data/events during the day-start moves. Considering Australia’s close trading ties with China, the latest surge in the dragon nation’s covid numbers challenges the AUDUSD bulls. It’s worth noting Beijing reports the biggest daily jump in the covid cases in over a year as the mainland sees the daily coronavirus numbers growing past 10,000 for the first time in seven months. On the other hand, optimism in the Asia-Pacific equity markets, by tracking Wall Street’s strong close, challenges the risk-barometer pair’s sellers. However, a banking holiday in the US and Canada joins sluggish US Treasury yields to challenge the pair’s moves. Amid these plays, Asian stocks rise but the S&P 500 Futures struggles for clear directions around a two-month high. It should be noted that the eight-month low of the US Consumer Price Index (CPI) bolstered the case of the US Federal Reserve’s (Fed) easy rate hike the previous day and propelled the pair prices the most in 11 years. Moving on, a light calendar and fears emanating from China may challenge the AUDUSD traders ahead of the first readings of the US Michigan Consumer Sentiment Index (CSI) for November, expected 59.5 versus 59.9 prior. However, the buyers are likely to keep the reins unless today’s data prints an extremely high outcome. Technical analysis AUDUSD stays on the bull’s radar unless it drops back below the 0.6500 support confluence, comprising the previous resistance line from August and the 50-DMA.

US President Joe Biden hopes to limit deterioration of ties with China when he meets its leader Xi Jinping next week, but will be honest about U.S. concerns, including over Taiwan and human rights, a senior administration official said on Thursday, reported Reuters. On the other hand, UK Today mentioned that the US has warned European countries that a conflict over Taiwan would trigger a huge global economic shock, in an effort to step up contingency planning amid rising concern about military action in the Indo-Pacific. “The US has warned European countries that a conflict over Taiwan would trigger a huge global economic shock, in an effort to step up contingency planning amid rising concern about military action in the Indo-Pacific,” adds the news. The stakes are high as the White House conveyed that US President Biden will hold talks on Monday with Xi on the sidelines of a Group of 20 Nations (G20) summit in Indonesia, their first face-to-face meeting since Biden became President in January 2021. Reuters also quotes a senior administration official from the US saying that there would be no joint statement from a meeting at which there are no expectations for specific agreements. “White House national security adviser Jake Sullivan told reporters later that the administration would brief Taiwan on the results of Biden's meeting with Xi, aiming to make Taipei feel "secure and comfortable" about U.S. support,” per the news. AUDUSD remains mildly offered The news challenges AUDUSD buyers, as well as the market’s risk-on mood, amid a sluggish Friday. That said, the Aussie pair was last seen picking up bids to 0.6620, down 0.15% intraday. Also read: AUDUSD grinds near 0.6630 as China’s covid woes jostle with US inflation-led optimism

After the US Consumer Price Index (CPI)-led risk rally, markets witnessed another boost to risk sentiment in Friday’s early European trading after China reduced its quarantine period for travelers while the system penalizing airlines for bringing virus cases into the country will also be scrapped, per Bloomberg. “Travelers into China will be required to spend five days in a hotel or government quarantine facility,” followed by three days confined to home, the country’s National Health Commission said in a statement Friday. Market reaction The US S&P 500 futures jumped 0.50% in reaction to the China headlines, as the move is seen a big pivot to Beijing’s strict zero-Covid policy. AUDUSD built on the rebound above 0.6600, currently trading at 0.6636, adding 0.30% on the day.  

The Australian dollar rose by 86 points on Friday, a little more than 60 points until it hits the upper limit of the price channel, and the price's intention to turn down this morning raises several questions at once: will the channel limit be reached at all, will it surpass this limit, will the price reversal from current levels be confirmed, and if so, how deep will the correction be? The most solid base for completing the correction (unless, of course, this is a reversal into a medium-term fall) is the 0.6514/32 range - a strong resistance in late September-early October, as well as highs on October 27. In this case, the support at 0.6595 can act as an intermediate target. However, if the price plans to continue rising in the medium term, then this level may also become a reversal for the correction observed this morning. The Marlin Oscillator is turning down with force on the four-hour chart. This is the only sign of the price's intention to reach the support at 0.6595. We are following developments.     Relevance up to 03:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326984

Summary:  Equity and commodity markets seem to be on a risk-on frenzy for now, supported by the surprise weaker US CPI print, as well as China introducing 16 property stimulus measures at the weekend, following the easing of some Covid restrictions. However the market doesn’t have too far to look for the next catalysts that could continue the rally, stunt it, or see it take a haircut. Up next we watch US producer prices, and US retail sales, which may give the Fed further ammunition to slow down its pace of tightening if the numbers show the US economy is continuing to crack. UK’s outlook, Japan’s Q3 GDP growth rates, as well as China’s industrial production, retail sales, and fixed investment data are also key to watch. As well as corporate earnings from Nvidia and the Aussie dollar.   US eco data and news on tap; US producer prices, retail sales and big retail earnings Investors will be looking for further signs that point to a slowdown in inflationary pressures. In the October CPI release last week, we saw a fall in health insurance costs due to technical factors, which added to the slowing of the service component of core CPI. This is important to the calculation of core PCE, which the Fed watches most closely. As a result, this week investors will pay more attention to the October producer prices index (PPI) numbers on Tuesday, as they try to gauge if the service component of core inflation is slowing. Bloomberg consensus estimates PPI will rise 8.4% Y/Y and +0.3% M/M for core PPI or +7.2% Y/Y. If the numbers are weaker than this, it could provide further support to the equity market rally, as the Fed would garner more catalysts to slow its pace of hikes. Then on Wednesday, retail sales are on watch and are expected to have rebounded, rising 1% in October after stagnating the month earlier. On top of that, a bevy of large retailers, report earnings including Home Depot, Walmart, and Target, which will help investors gauge the health of the world's largest economy. Elsewhere in America, Canada will release inflation and housing starts data. Look for hints on the Fed’s hiking path in Fed speak this week Investors will get to gauge what the Fed’s latest thinking is, as we hear from a number of Fed officials this week, who will likely focus on the softer CPI print last week and if it’s changed their assessment of inflation and interest rate rates. Remarks from Fed Governor Christopher Waller will likely be a focus as Waller previously proposed not to pause, until core PCE falls below 3% on a monthly annualized basis. On top of that, speeches will be made from Neel Kashkari and Loretta Mester on Thursday G-20 meeting brings focus back on geopolitics and markets G-20 leaders will be meeting Bali, Indonesia this week on Tuesday and Wednesday, and the agenda is likely to be centered around geopolitical tensions and financial market risks. It is interesting to note that China has signaled the easing of its zero covid policy ahead of this event, despite the recent surge in cases. The meeting between Biden and Xi today will be key in the current cold war environment, especially with respect to the US tech controls and the stance on Taiwan. Other key areas of focus will be the Ukraine war, despite Putin’s lack of attendance at the event, as well as the global inflation concerns and what the global tightening wave means for financial markets. Lastly, climate change is likely to remain on the agenda, with progress stalling over the year as the focus shifted to meeting the world’s energy needs. Japan’s Q3 GDP and October CPI to see the drag from a weaker JPY Japan reports preliminary Q3 GDP on Tuesday, followed by the October CPI print on Friday. Growth is likely to weaken in the third quarter, with Bloomberg consensus looking at 1.1% QoQ print from 3.5% previously, mainly driven by a drag from net exports due to the surge in import prices. However, some support may be seen from private consumption with labor cash earnings and retail sales having stayed upbeat in the quarter. Meanwhile, business investment also likely improved, as suggested by large manufacturer’s Tankan report for the third quarter. The outlook also remains supported by the series of fiscal measures announced by the government, along with increased tourism. October CPI is likely to surge to fresh highs of 3.7% from 3.0% previously, with the core measure seen at 3.5% from 3.0% in September, but the outlook is likely improving as the Japanese yen recovers. UK’s medium-term fiscal outlook will be closely watched The UK updates markets on its fiscal plans in a week of reckoning following the collapse of Liz Truss’s administration. Chancellor of the Exchequer Jeremy Hunt on Thursday presents the medium-term outlook accompanied by updated economic forecasts. He’ll try to further restore investor confidence after his predecessor’s announcement of unfunded tax cuts created panic in markets, but spending cuts and tax rises remain on the horizon. While fiscal consolidation is still needed, excessive frontloading will mean more economic pain and backloading could impinge on government credibility. It’s a delicate balance, especially with double-digit inflation and recession concerns also on watch. China’s October activity data are expected to be weak October retail sales in China are expected to decelerate to +0.7% Y/Y according to the Bloomberg survey from +2.5% Y/Y in September as the surge in COVID cases and pandemic control restrictions took their toll on consumption. Industrial production is estimated to slow to +5.3% Y/Y in October from +6.3% Y/Y in September, amid Covid-related restrictions, slower auto production, and weak exports. Nvidia results in focus. Can its outlook and results continue to move its shares off its low? Nvidia (NVDA) is set to release third-quarter earnings on Wednesday, November 16 with analysts expecting revenue of $5.84bn down 18% y/y and EBITDA of $2.1bn down from $3.2bn a year ago and EPS of $0.71 down 30% from a year ago. Nvidia shares appear to be gaining traction of late, so its results will be watched closely, especially its outlook. If they are better than expected, you could see sentiment remain supported and it shares could continue to rebound. NVDA shares have risen about 40% in four weeks, but its shares are still down 52% from its high. Nvidia has been suffering amid restricted chip sales to China and declining PC demand. Pay close attention to if its results meet or exceed expectations, its outlook and what it sees as the potential full effects on the US/China chip restrictions. For detailed analyst, refer to Saxo’s Head of Equity Strategy, Peter Garnry’s note. AUDUSD is now up 9% from its low, gaining extra legs on China’ property rescue package  The Aussie dollar is gaining on the back of China's property sector rescue package. China introduced 16 property measures to address the developer liquidity crisis; from blanket debt extensions, to loosening down-payment requirements for homebuyers. On top of that that, China’s eased covid restrictions; shortening to five-day quarantines, which is aimed at reducing the economic impact of Covid Zero, rather than relaxing restrictions. While the market still awaits further easing developments, the market is buoyed on forward looking hopes that the AUD will continue to be bid on commodity demand picking up. As commodity hope-demand picks up, so have respective commodity prices; the iron ore (SCOA) price is back above US$90 after rising 6% last week, the copper price lifted about 5% last week, and the lithium price is also higher, with carbonate prices up 118% year-to-date. The next key event to watch for the Aussie dollar is the RBA meeting minutes; released Tuesday November 15, which should give more clues on the course of the central bank’s hikes after it made a lower-than-expected 25bps rate hike this months. Major China Internet companies are scheduled to report this week Meituan (03690:xhkg) kicks off the busy earnings calendar of  China Internet companies on Monday, followed by Tencent (00700:xhkg) on Wednesday, Alibaba (09988:xhkg) on Thursday, and JD.COM (09618:xhkg) on Friday. Analysts estimates for top line growth in Q3 are subdue on weak consumption recovery and macro environment. Slow gross merchandize value (GMV) growth during the Singles’ Day festival may point to sluggish Q4 outlook. Alibaba's GMV growth during the Singles' Day festival was flat. JD.COM has not yet announced its numbers except saying GMV had positive growth Y/Y during the period (from Oct 31 evening to Nov 11 end of day). According to estimates, eCommerce platform GMV grew about 14% Y/Y but the large traditional eCommerce platforms were estimated to see GMV growth at just around 3% Y/Y.   Key company earnings releases   Monday: Meituan, Sonova, Tyson Foods, Nu Holdings, Trip.com, DiDi Global Tuesday: Infineon Technologies, Vodafone, Alcon, Walmart, Home Depot, Sea Ltd, Commonwealth Bank Wednesday: Siemens Energy, Tencent, Experian, SSE, Nibe Industrier, Nvidia, Cisco, Lowe’s, TJX, Target Thursday: Siemens, Alibaba, Applied Materials, Palo Alto Networks, NetEase Friday: JD.com   Key economic releases & central bank meetings this week Monday, Nov 14 US:  New York Fed Survey of Consumer Expectations (Oct) Eurozone: Industrial Production (Oct) Tuesday, Nov 15 US: PPI (Oct) US: Empire State Manufacturing Survey (Nov) Eurozone: GDP (Q3) Germany: ZEW survey (Nov) UK: Employment (Oct) Japan: GDP (Q3) China: Retail Sales (Oct) China: Industrial Production (Oct) Wednesday, Nov 16 US: Retail Sales (Oct) US: Industrial Production (Oct) UK: CPI, RPI & PPI (Oct) Thursday, Nov 17 US: Jobless claims (weekly) US: Housing Starts (Oct) Eurozone: HICP (Oct, final) Friday, Nov 18 US: Existing Home Sales (Oct) UK: Retail Sales (Oct) Japan: CPI (Oct) Source: https://www.home.saxo/content/articles/macro/saxo-spotlight-14-nov-2022-14112022

In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, AUD/USD could extend the advance to the 0.6775 level in the short term. Key Quotes 24-hour view: “While overbought, the strong surge in AUD could extend further. However, a break of the major resistance at 0.6775 is unlikely today (there is another resistance at 0.6735). On the downside, a break of 0.6635 (minor support is at 0.6665) would indicate that the upward pressure has subsided.” Next 1-3 weeks: “The impulsive upward acceleration in AUD last week was accompanied by strong upward momentum. Further AUD strength is likely even though any advance is likely to be at a slower pace. The level to monitor is 0.6775. Support is at 0.6635 but only a break of 0.6595 would indicate that AUD is not advancing further. Looking ahead, the resistance above 0.6775 is at 0.6820.”

Summary:  Market sentiment closed last week on a strong note after the wild rally on Thursday in the wake of the softer-than-expected October US CPI data. Sentiment was checked in the Asian session today by rising Covid cases in China, although the Zero Covid policy approach there may be softening. US yields jumped a bit to start this week after a bank holiday on Friday and after Fed Governor Waller was the first significant Fed profile to push back against the market’s lower of forward Fed tightening expectations in the wake of a single data release.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Last was a spectacular week for equities with the MSCI World Index up 6.7% with our theme baskets e-commerce, cyber security, and semiconductors rallying 19.4%, 13.6%, and 12.8% respectively. High duration equity themes responded the most to broad-based easing of financial conditions last week and the key question is now if the market will extend its momentum. S&P 500 futures closed on Friday at the 4,000 level and have opened a bit lower this morning but are already attempting to climb back to the 4,000 level. If we look at financial conditions and where they mostly went last week there are theoretically room for a rally up 4,100 and even beyond that to the 4,200 level. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Hang Seng Index climbed 2.7% and CSI 300 edged up 0.9% on the news that the People’s Bank of China and the Banking and Insurance Regulatory Commission jointly issued a notice to financial institutions with 16 measures to address the liquidity squeeze faced by property developers through measures including the temporary relaxation of previously imposed redlines restricting banks from lending over certain ceilings to developers and calling for financial institutions to treat private enterprise developers equally with state-owned enterprises. Leading China private enterprise property developers listed in Hong Kong soared by 20% to 40% at one point. FX: USD picking up the pieces after massive downdraft on lower October CPI The US dollar lurched into an historic two-day plunge late last week after the release of the softer than expected US October CPI data on Thursday ahead of a three-day weekend for US rates (on Friday’s bank holiday). The move was so sharp that it can’t hope to maintain course, so for the nearest term, the market will try to feel out consolidation levels. EURUSD, for example, finally found resistance just above the key 1.0350 area, which was the major low back in May and June and prior to that, back in early 2017. The first support is the 1.0200 area, the 38.2% retracement of the rally sprint, with the reversal level at 1.0100, the 61.8% retracement and near the prior important resistance. For USDJPY, the market managed to take out the 139.40, the prior major high in July, around where it trades this morning. Amazingly, having fallen from 151.95 to the local low of 138.46, the 200-day moving average is still quite far away, near 133.00. Crude oil (CLZ2 & LCOF3) remains rangebound ... trading softer into the European session in response to a recovering dollar after Fed’s Waller said the FOMC has some way to go before it stops raising interest rates. Earlier in the session commodity prices in general, including oil, were supported by demand optimism after China on top easing Covid restrictions issued a rescue package for its struggling property market. A pickup in Chinese demand, despite the current headwinds from rising virus cases, when EU is preparing sanctions against Russian oil and OPEC+ is cutting production, will likely lead to further tightening of the market. Focus on US economic data given its impact on risk appetite as well as Monthly Oil Market Reports from OPEC today and the IEA tomorrow. Gold trades softer following a two-week jump of almost 8% … after Fed’s Waller cautioned that the FOMC isn’t close to pausing interest rate hikes. The dollar strengthened while Treasury yields moved higher after having been closed on Friday for Veterans Day. Overall, however, the sentiment in the market seems to be changing with a period of consolidation, potentially the next phase. Focus on resistance-turned-support at $1735 and whether we have seen a shift in the trading behaviour among speculators from a sell-into-strength to a buy-on-weakness. ETF investors – net sellers for months - and speculators in the futures market now hold the key that could unlock further gains. Expect some consolidation and potentially a recheck of support at $1735 with resistance at $1789 and $1804. Industrial metals remain focussed on China … and overnight iron ore, the key feedstock for steel production, jumped +3% after the Chinese government released a package of policies to rescue its property sector. The news came on top of last week's easing of some virus restrictions which drove a near 14% rally in the Bloomberg Industrial metals index to a five-month high. Copper, now up 25% from the July low was one of the main beneficiaries of the news, coming at a time when supplies are already showing signs of tightening. Overnight, the property news drove HG copper to a fresh five-month high at $3.96 per pound before some profit taking emerged just ahead of critical and potential sentiment as well as momentum changing resistance in the $4 to $4.05 area.  US treasuries (TLT, IEF) US Treasury yields (10Y) closed Thursday on a weak note after the plunge on the October CPI data ahead of a three day weekend for banks (treasuries not trading, even as equity markets were open). Yields have jumped a bit here at the start of this week after Fed Board of Governors member Waller pushed back against the market’s repricing of Fed tightening intentions since that CPI release (more below) in comments overnight. The low water mark for the 10-year treasury benchmark was just above 3.80%, with a jump back above 4.00% needed to suggest that this drop in yields is temporary. The next level of note to the downside is the 3.50% area, which was the high-water mark back in June that held for about three months before new highs were posted in September. What is going on? AUDUSD is up 9% from its low, gaining some extra ground on China’ property rescue package The Aussie dollar has gained ground on the back of China's introduction of a property sector rescue package. AUDUSD now trades at a two-month high, hitting 0.666 in anticipation that Australia’s trade surplus will be further supported by exports into resurgent Chinese demand after China introduced 16 property measures to address its developer liquidity crisis. On top of that that, China’s eased some covid restrictions; shortening to five-day quarantines, which is aimed at reducing the economic impact of Covid Zero. US Fed’s Waller pushes back against market’s lowering of Fed expectations Federal Reserve Governor (and therefore voter) Christopher Waller has been the first high profile Fed official to emerge and push back against the market’s repricing lower of the Fed’s rate tightening trajectory in comments overnight. Speaking at a Sydney, Australia conference, Waller said that “These rates are going to...stay high for a while until we see this inflation get down closer to our target”. “We’ve still got a ways to go. This isn’t ending in the next meeting or two.” The market is now pricing the Fed to reach a peak policy rate below 5.00%, either at the March or May FOMC meeting next year, with a 50-basis point hike priced for December to take the Fed Funds rate to 4.25-4.50% and slightly more than 50 basis points of further tightening priced beyond that. This is some 25 basis points below the prior peak in expectations. Crypto market fear is spreading On Friday, the CEO of the cryptocurrency exchange FTX stepped down, and FTX and more than 100 affiliates filed for bankruptcy, with the filing revealing that FTX and Alameda Research (related trading firm) have liabilities in the range $10-$50 bn. Contagious effects have already appeared with examples of as Genesis has $175 mn stuck in FTX and the crypto lender BlockFi stating that they would be limiting activities in wake of the FTX collapse. As the confidence in centralized exchanges is shrinking, a record-high amount of Bitcoin was moved out of exchanges and into self-custody wallets due to increased fears of exploitation and mismanaging of user funds. What are we watching next? Fed Vice Chair Lael Brainard to speak today Brainard is thought to be one of the most dovish of prominent Fed figures and possibly behind what was seen as slightly dovish insertion in the November FOMC monetary policy statement before Fed Chair Powell’s press conference. What will Brainard say now that the market seems ready to pounce on a single month’s data to significantly alter its projections of Fed policy? NY Fed President and voter Williams will also speak today, with a rather busy schedule of Fed speakers in the week ahead. Incoming US data Traders will remain nervous around incoming US data after the wild reaction to last week’s Thursday October US CPI release. The US macro calendar highlights this week include Tuesday’s October PPI releases, the Oct. Retail Sales data on Wednesday and November NAHB Housing Market Index release the same day. Finally, the US reports October Housing Starts/Building Permits data on Thursday. Major China Internet companies are scheduled to report this week Meituan (03690:xhkg) kicks off the busy earnings calendar of  China Internet companies on Monday, followed by Tencent (00700:xhkg) on Wednesday, Alibaba (09988:xhkg) on Thursday, and JD.COM (09618:xhkg) on Friday. Analysts’ estimates for top-line growth in Q3 are subdued due to weak consumption recovery and the macro environment. Slow merchandise value (GMV) growth during the Singles’ Day festival may point to a sluggish Q4 outlook. Alibaba's GMV growth during the Singles' Day festival was flat. JD.COM has not yet announced its numbers except saying GMV had positive growth Y/Y during the period (from Oct 31 evening to Nov 11 end of the day). According to estimates, eCommerce platform GMV grew about 14% Y/Y but the large traditional eCommerce platforms were estimated to see GMV growth at just around 3% Y/Y. UK Autumn Statement on 17 November Expect a contractionary 2023 UK Budget. The new Prime minister Rishi Sunak needs to find savings worth about £30-40bn/year to convince the independent Office for Budget Responsibility that debt won’t rise across the medium-term as a percentage of GDP. This is not an easy task. But this is certainly the only way for the United Kingdom to win back investor confidence after the disastrous mini-budget presented in September. All of this will likely increase the depth of the UK recession and poverty across the country. The outlook is really grim. The Bank of England expects the UK to be in recession from mid this year all the way through to mid 20024. Then growth will pick up only very modestly (annualized rate of 0.75 %). Poverty is also increasing. The country’s largest foodbank charity says 11.5 million meals were handed out over six months – more than 63.000 a day on average. This is a record. The 2023 budget will likely make things worse. The UK is facing an emerging market economy dynamic. Earnings to watch The Q3 earnings season is still slowing down but with important earnings releases still coming out this week. Today’s focus is Chinese e-commerce giant Meituan, Brazil-based fintech bank Nu Holdings, and finally DiDi Global which is the Uber equivalent in China. For foreign investors the earnings from Nu Holdings will get the most attention as the bank is purely technology-driven, fast growing (expected to grow net revenue 188% y/y in Q3 to $1.09bn), and has Berkshire Hathaway as one of its biggest shareholders. Monday: Meituan, Sonova, Tyson Foods, Nu Holdings, Trip.com, DiDi Global Tuesday: Infineon Technologies, Vodafone, Alcon, Walmart, Home Depot, Sea Ltd Wednesday: Siemens Energy, Tencent, Experian, SSE, Nibe Industrier, Nvidia, Cisco, Lowe’s, TJX, Target Thursday: Siemens, Alibaba, Applied Materials, Palo Alto Networks, NetEase Friday: JD.com Economic calendar highlights for today (times GMT) 1000 – Eurozone Sep. Industrial Production 1630 – Switzerland SNB President Jordan to speak 1630 – US Fed Vice Chair Brainard to Speak 2030 – Weekly Commitment of Traders Report (delayed from Friday) During the day: OPEC’s Monthly Oil Market Report 0030 – Australia RBA Minutes 0120 – China Rate Decision 0200 – China Oct. Industrial Production / Retail Sales  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-14-2022-14112022

The Australian dollar is in negative territory today, after posting huge gains last week. In the European session, AUD/USD is trading at 0.6690, down 0.22%. The US dollar took a nasty spill last week, and the Australian dollar made the most of it, gaining 3.6%. The US dollar was slammed after a soft inflation report, with headline and core inflation slowing in October and beating the forecasts. This lit up risk appetite and sent the Australian dollar to its highest level since September 22nd. The soft inflation report had such a strong effect on the greenback because it has raised expectations that the Fed will ease up on its rate tightening. After four consecutive hikes of 0.75%, the markets have now priced in a 0.50% increase at the December meeting. That would still represent an oversize hike, but investors have been looking for a reason to rush into stocks and the drop in inflation provided that excuse. It’s still too early to tell if inflation has peaked, but the Fed has tweaked its terminology, with Fed members now describing rate policy with words like “gradual” and “measured”. The Fed hasn’t sent out any signals that it is planning a dovish pivot. Quite the contrary; the Fed has stated clearly that the terminal rate could be higher than it had expected, but the markets appear to be ignoring this message and expectations are rising that the Fed will lower rates in the second half of 2023. RBA raises inflation forecast In Australia, inflation is also the number one priority. The Reserve Bank of Australia has raised its inflation forecast, with a peak expected at 8 per cent in December and has said inflation will not decline to the 2 per cent target until 2025. The RBA is likely to raise rates by 0.25% for a third straight time at the December meeting. RBA Deputy Governor Michele Bullock said last week that the RBA could have raised rates more sharply to bring inflation down faster, but that a “scorched earth” policy would have meant the loss of strong job gains. AUD/USD Technical There is resistance at 0.6821 and 0.6934 AUD/USD tested support at 0.6667 earlier today. Below, there is support at 0.6574 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar takes a pause - MarketPulseMarketPulse

AUDUSD recovers from intraday low after an inactive start to the week. Downbeat China data, hawkish RBA Minutes and the PBOC inaction failed to impress AUDUSD traders. Absence of major risk-negative headlines from G20 favors buyers amid sluggish session. Aussie Wage Price Index, US Retail Sales could entertain traders, risk catalysts are the key. AUDUSD portrays the market’s cautious optimism during early Tuesday in Europe, up 0.10% intraday near 0.6710 at the latest. In doing so, the Aussie pair struggles to justify multiple data/events published earlier in the day from Canberra, as well as from Beijing, amid mildly positive headlines from the Group of 20 Nations (G20) meeting in Indonesia. As per the latest RBA Minutes, “Board doesn't rule out return to 50bps, or pause.” The publication also mentioned that there is no pre-set path -considered a 50bps hike, saw the stronger case for 25bps in November. On the other hand, China’s Retail Sales marked the lowest print in five months, to -0.5% YoY versus 1.0% expected and 2.5% prior, whereas the Industrial Production (IP) also dropped to 5.0% growth versus 5.2% market forecasts and 6.3% previous readings during October. Elsewhere, the recently firmer Covid numbers from the dragon nation also propel the USDCNH price as Guangzhou reports 5,124 new local Covid-19 cases as of 00:00 November 15, 2022. With this, the daily numbers turn out to be double what they were over the weekend. “A positive sign on the eve of the summit was a three-hour bilateral meeting between U.S. President Joe Biden and Chinese leader Xi Jinping in which the two leaders pledged more frequent communications despite many differences,” stated Reuters. It should be noted that the concerns over major rate hikes challenge the AUDUSD buyers. That said, the Fed’s Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, Michael Barr mentioned that the inflation is too high. Previously, Vice-Chair Lael Brainard favored a 50 bps rate hike but also stated, “We have additional work to do.” Earlier on Monday, Federal Reserve Governor Christopher Waller also promoted the ideal of a 0.50% rate hike while also warning against the market’s perception of the pivot. Such comments from the US Federal Reserve officials tame optimism surrounding future policy moves and renewed the US Dollar's strength. Against this backdrop, S&P 500 Futures print mild gains but the US 10-year Treasury yields grind higher around 3.87%, which in turn challenges the US Dollar Index (DXY) recovery near 107.00 by the press time. Looking forward, risk catalysts are important for the AUDUSD pair traders ahead of the US Producer Price Index (PPI) for October, expected at 8.3% YoY versus 8.5% prior, as well as the US Retail Sales for the said month. Additionally important will be Australia’s third quarter (Q3) Wage Price Index data, up for publishing on Wednesday. Technical analysis A clear upside break of the 100-DMA, around 0.6700 by the press time, becomes necessary for the AUDUSD bulls to keep the reins. Following that, the mid-September swing high near 0.6770 should lure buyers. Alternatively, bears remain off the table unless witnessing a clear break of the 50-DMA support, around 0.6500 by the press time.

The Australian dollar continues to gain ground and hit a two-month high earlier today. In the European session, AUD/USD is trading at 0.6756, up 0.85%. RBA to limit forward guidance The Reserve Bank of Australia minutes noted that the use of forward guidance had been useful during the Covid pandemic, but it would no longer remain a tool unless “appropriate”. The RBA said that rates “are not on a pre-set path” and it will determine the size and timing of future hikes based on incoming data and the outlook for inflation and employment. The takeaway from the minutes is that the RBA will not always provide forward guidance on interest rates, as it wants the flexibility to determine rate policy based on incoming data rather than be tied to its guidance. The RBA has eased its tightening, with two straight hikes of 0.25%, and is signalling to the markets that it could pause its rate-hike cycle or resume oversize rates, depending on the data. The RBA’s rate cycle has been steep, with 250 points in tightening since May. Despite this, inflation remains stubbornly high, and the RBA has revised upwards its inflation forecast for the end of 2022 to 8.0%, up from 7.8%. The central bank had expected inflation to slow to 3%, the top of its inflation target range, by December 2022, but that has been revised to 2025. The Federal Reserve is also looking at easing its tightening, as the markets have priced in a 0.50% increase at the December meeting. Fed Vice Chair Brainard said on Monday that she favored slowing the pace of rate hikes, but that further hikes were required in order to bring down inflation. Brainard’s stance was echoed by Fed member Waller, as Fedspeak remains hawkish, despite the unbridled euphoria in the financial markets after last week’s soft US inflation report. The Fed remains committed to curbing inflation, and a dovish pivot would make its rate tightening less effective.   AUD/USD Technical AUD/USD is testing resistance at 0.6729. Above, there is resistance at 0.6821 There is support at 0.6603 and 0.6490 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

AUDUSD rises to 0.67692 as the time of writing and the main drivers for these bullish AUD and other Risk-On assets mainly because of weaker USD across the board as well as Risk-Sensitive AUD supported by Today’s Hang Seng Index gains up 4.1%. Weaker USD technically will continue ahead of the US trading session until we see the US PPI data release where volatility are expected. Australia looking forward to have constructive dialogue with China during G20 meeting in Bali – Indonesia, which market will expect the easing China Zero-COVID Policy as the result of the dialogue. Price-Action shown the critical 0.67 major level to hold if bullish want to stay alive where 100 DMA providing dynamic support level.

With a desperate jump of 98 pips, the aussie left the declining channel above 0.6747 on the daily chart. Now the price is trying to return to the channel, but since the channel is built on two points, it has been discontinued. Now, to confirm the reversal, it is convenient to use the level of 0.6700 – the low of September 7th. If the support is broken, the 0.6595 target will become available. We can expect growth to develop when the price overcomes yesterday's high at 0.6799 - the nearest target will be 0.6871 - the low of August 5. The price is consolidating in the range of 80 points on the four-hour chart. Settling will increase the likelihood of further growth, a downward price reversal will mean working out the downward potential set by the divergence. The probability of these scenarios is equal. We are waiting for the development of events.   Relevance up to 03:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327222

There was a time when a 3%+ wage inflation rate might have mattered for the Reserve Bank's rate-setting decisions. Right now, data does not appear to be a very important input for their decision-making process  3.1% 3Q22 YoY% Wage price index  Higher Its all about where you are, not what's happening At 3.1% in 3Q22, the latest wage price index result is finally consistent with what the Reserve Bank of Australia once thought was a necessary condition for achieving their 2-3% CPI inflation target. With CPI inflation actually at 7.3%YoY currently, this particular metric ceased to have much relevance a long time ago.  Even so, 3.1% wage growth is a long way below 7.3% price inflation, indicating that in real terms, wage growth remains strongly negative. Even if the RBA were paying much attention to the run of data in its rate-setting deliberations, this latest wage data print is still innocuous.  Annual wage and price growth Source: CEIC, ING Steady as she goes At 2.85%, the current cash rate target is probably just slightly in a neutral to restrictive policy setting. Here, any further increases in rates are likely to weigh on growth a little bit more than previously. And this, rather than the run of data, seems to be what is driving Reserve Bank (RBA) policy setting. The RBA expressed concern in their latest statement about overdoing the tightening, and for this reason alone, they seem to be content to slow the pace of monetary adjustment right down to help them finesse the end game in this tightening cycle.  Consequently, even with the last inflation and now wages data surprising on the upside, we don't believe they will shift back to their previous 50bp pace of tightening and will continue at a 25bp pace at coming meetings, with the peak for cash rates likely to come in 1Q23 as the cash rate hits 3.6%.  The RBA will also be keeping a weather eye on the AUD. The recent spell of weakness has been abruptly shattered as thoughts of a US Fed pivot have gained ground, and the Reserve Bank will be keen not to encourage the AUD to rise much faster due to their actions.    TagsRBA rate policy Australian wages Australian inflation AUD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

NZDUSD has picked bids from 0.6120 amid obscurity in the market sentiment. The DXY is displaying a volatile performance and has surrendered intraday gains. The 10-year US Treasury yields have eased to 3.71% despite hawkish commentary from Fed’s Daly. The NZDUSD pair has witnessed buying interest after dropping to near 0.6120 in the Asian session. The asset has picked bids as the US dollar index (DXY) has turned volatile after facing selling pressure around the critical hurdle of 106.60. Market mood is displaying mixed cues as DXY has witnessed offers despite mounting geopolitical tensions between North Korea and the US. It could be possible that market participants must be awaiting further development on North Korea-US noise for making informed decisions. The DXY has surrendered the majority of its intraday gains and is likely to remain on tenterhooks as US economic calendar has nothing much to offer this week. Meanwhile, S&P500 futures are displaying topsy-turvy moves amid ambiguity in the risk impulse. The returns generated by long-term US government bonds have trimmed to 3.71% after printing an intraday high of 3.73%. Higher interest rate guidance by San Francisco Federal Reserve (Fed) President Mary Daly has failed to strengthen US yields. Fed policymaker has considered a range of 4.75% - 5.25% as reasonable for the policy rate end-point. She further added that the central bank wants to see a slowdown in the economy to cool down the red-hot inflation. On the NZ front, accelerating Covid-19 infections have not impacted the kiwi dollar much. Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), at the Caixin Summit, cited that “Calibrating China's zero-COVID strategy to mitigate the country's economic impact will be critical to sustain and balance the recovery,” This might impact recovery in the antipodean ahead.

NZDUSD has picked bids from 0.6120 amid obscurity in the market sentiment. The DXY is displaying a volatile performance and has surrendered intraday gains. The 10-year US Treasury yields have eased to 3.71% despite hawkish commentary from Fed’s Daly. The NZDUSD pair has witnessed buying interest after dropping to near 0.6120 in the Asian session. The asset has picked bids as the US dollar index (DXY) has turned volatile after facing selling pressure around the critical hurdle of 106.60. Market mood is displaying mixed cues as DXY has witnessed offers despite mounting geopolitical tensions between North Korea and the US. It could be possible that market participants must be awaiting further development on North Korea-US noise for making informed decisions. The DXY has surrendered the majority of its intraday gains and is likely to remain on tenterhooks as US economic calendar has nothing much to offer this week. Meanwhile, S&P500 futures are displaying topsy-turvy moves amid ambiguity in the risk impulse. The returns generated by long-term US government bonds have trimmed to 3.71% after printing an intraday high of 3.73%. Higher interest rate guidance by San Francisco Federal Reserve (Fed) President Mary Daly has failed to strengthen US yields. Fed policymaker has considered a range of 4.75% - 5.25% as reasonable for the policy rate end-point. She further added that the central bank wants to see a slowdown in the economy to cool down the red-hot inflation. On the NZ front, accelerating Covid-19 infections have not impacted the kiwi dollar much. Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), at the Caixin Summit, cited that “Calibrating China's zero-COVID strategy to mitigate the country's economic impact will be critical to sustain and balance the recovery,” This might impact recovery in the antipodean ahead.

Summary:  The hotter-than-expected US retail sales data and hawkish-leaning comments from Fed officials weighed on equities but boosted buying of long-dated bonds as investors focused on the likelihood of Fed overdoing in monetary tightening and triggering a recession. Target disappointed with Q3 miss and weak Q4 sales guidance, highlighting the pain of the US retailers and consumers. Nvidia's results beat expectations, moving its shares up after hours. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) retreated on strong retail sales and hawkish Fedspeak The Good news is bad news phenomenon persists. The hotter-than-expected 1.3% rise in October retail sales, followed by several hawkish-leaning comments from Fed officials triggered concerns that the Fed would overdo monetary tightening and bring about a recession. The fall in yields at the long end of the US treasury curve did not lend support to the equity market as in recent months as stock investors took it as a sign of bond market pricing in a higher recession risk. Nasdaq 100 fell 1.5% and S&P500 declined 0.8%, with 68% of S&P 500 companies and 9 out of 11 sectors closing lower. Energy, consumer discretionary, and information technology led the benchmark index lower while the defensive utilities sector and consumer staples sector managed to finish the session with modest gains. Target (TGT:xnys) fell 13% following the retailer reported a large miss on earnings and cut its outlook for the current quarter far below analyst estimates. Lowe’s (LOW:xnys) gained 3% after reporting better-than-expected comparable sales and raising full-year earnings guidance. Micron (MU:xnas) dropped 6.7% as the chipmaker said it was cutting DRAM and NAND wafer production. After the market closed, Nvdia (NVDA:xnas) and Cisco (CSCO:xnas) reported earnings beating analyst estimates. Nvida rose 1.3% and Cisco gained 3.9% in the extended hours trading. US  treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied with yields in the long end of the curve falling most on recession concerns The US treasury yield curve bull flattened, with the 2-year yield edging up 2bps to 4.35% while the 10-year yield fell 8bps to 3.69%. The much-watched yield curve inversion between the 2-year and the 10-year widened to 67bps, the most invested since February 1982, and heightened the growth scare among investors. The market has largely priced in a 50bps hike in December but is unwinding some of the post-CPI optimism that the Fed may do less next year, after Fed’s George, Daly, Waller, and Williams pushed back on the notion of pausing. The strong results from the 20-year bond auction on Wednesday helped supported the outperformance of the long ends.  Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) on fire as risk-on sentiment returned Hong Kong and China stocks consolidated and took a pause on the strong rally since last Friday, with Hang Seng Index losing 0.5% and CSI 300 Index sliding 0.8%. Chinese property names retreated, following new home prices in the 70 major cities of China falling 1.6% Y/Y in October, the largest decline in seven years, and Agile (03383) announced that the developer will sell new shares at an 18% discount. Agile tumbled 23%. Country Garden (02007:xhkg), which also announced share placement earlier, plunged 15%. Investors also became increasing concerned about the rising trend in new Covid cases in mainland China, which having gone above 20,000 for the first time since April. In New York hours, the ADRs of Tencent (00700:xhks) rose 3.4% versus their Hong Kong closing level after reporting earnings beating estimates while Meituan (03690:xhkg) dropped 6.7% from Hong Kong closing as Tencent said it would disburse its stake on Meituan to shareholders. What to consider U.S. Retails hotter-than expected U.S. headline retail sales grew by 1.3% M/M in October (consensus:  +1%, Sep: 0%). The control-group retail sales increased by 0.7% M/M (consensus: +0.3%, Sep: +0.4%). U.K. headline CPI jumped to 11.1% in October, the highest in 41 years U.K’s October headline CPI came in at 11.1% Y/Y (vs consensus 10.7%), the highest in 41 years. Core CPI remained at 6.5%. Australia’s unemployment falls, employment rises more than expected in October, following Australian wage growth growing more than expected; AUDUSD trades flat Australia’s jobless rate fell to 3.4%, from 3.5% last month, which supports the RBA continuing to rise rates, and not pause on rate hikes at their next meeting in December. Australian employment rose by 32,200 month-on-month in October, almost double the 15,000 jobs expected to be added to the economy. Job growth is also up markedly from the tiny 900 jobs that were added the month prior. The AUDUSD is staying range bound for now. Target reported Q3 earnings miss and full-year guidance reduction Target’s Q3 adjusted EPS fell to USD1.54, nearly 30% below the median of analyst estimates. The retailer is predicting a drop in comparable sales for the first time in five years and estimating operating margins will shrink to about 3%, which is half of its previous forecast. Target is looking to axe $3 billion in costs, but says there will be no mass layoffs. This highlights the pain of the US retailers and also the consumer – who is reluctant to spend on non-essential items in the face of rising interest rates and inflation. Nvidia earnings beat Software graphics giant Nvidia (NVDA) reported revenue for the third quarter that beat analyst estimates. Revenue fell 17% y/y to $5.93 billion, beating the expected drop of 18% y/y to $5.84 billion. NVIDIA’s outlook for the fourth quarter was a bit vague though, but more or less points to improvements in revenue, citing revenue is expected to hit $6.00 billion, plus or minus 2%. Nvidia said Microsoft will use its graphics chips, networking products, and software in Microsoft’s new AI products. Nickel Miners could be under fire Profit taking in oil equites is likely with the after the oil price fell on reports the Druzhba pipeline carrying Russian oil to Europe had restarted, WTI Crude Oil fell 1.9%. Elsewhere, Nickel miners shares could be under fire today move after Nickel futures fell 9% on Wednesday. LME is said to be stepping up surveillance of sharp swings earlier in the week on supply fears. Keep an eye on Australia’s Nickel Mines (NIC) and IGO, Japan’s Pacific Metals, Sumitomo Metal Mining, and Indonesia’s Vale Indonesia, Aneka Tambang. For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-17-nov-2022-17112022

Against some expectations that labour supply constraints could begin to slow the pace of hiring and push the unemployment rate higher, October's labour market data shows that there is still room for solid gains in full-time jobs in Australia  Source: Shutterstock 32,200 Total employment gains understates full-time employment gains  Better Despite labour shortages, employment growth is still happening On casual inspection, Australia is running out of available labour. Retail outlets and F&B establishments uniformly display "we are hiring" signs, and it looks very much as if the economy is hitting labour supply constraints. But despite this, it still appears that there is enough labour available, not only to fill more jobs than there is growth in the population of working age, but that those jobs are also predominantly, full-time, and typically higher quality and better-paid jobs.  In terms of the numbers: The total gain in employment in October from the previous months was 32,200. but this understates the boost to household spending, as the full-time employment gain was 47,100, which must have included some conversion of part-time jobs to full-time. Part-time employment fell by 14,900.  The total number of unemployed broadly mirrored the employment gains, falling 20,500, though there was also a very small drop in labour force participation which helped to bring the unemployment rate down to 3.4%, equal to its previous record low.  Australia's unemployment rate and forecasts Source: CEIC, ING Labour market probably close to its maximum tightness It is difficult to see how the labour market is going to tighten significantly further from here. This month may be one of the last to show solid employment gains, though we may need to wait until early 2023 for softening to become more apparent and for the unemployment rate to start nosing higher.  In the meantime, we don't expect today's data to have any material bearing on how the Reserve Bank of Australia conducts its monetary policy in the coming months. We still anticipate further tightening and at a moderate 25bp per meeting pace now that rates are already at 2.85%, with the RBA signalling that they can take more measured approach from here on. We still anticipate rates rising into the early part of 2023, with the cash rate target peaking at 3.6% in 1Q23 amidst signs of inflation topping out and growth beginning to slow.  TagsRBA rate policy Australia unemployment Australia employment AUD   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The Australian dollar is considerably lower on Thursday. In the European session, AUD/USD is trading at 0.6671, down 1.02%. Employment data shines Australia’s tight labor market got even tighter in October. Total employment jumped by 32,200, up from just 900 in September. The numbers were especially encouraging as full-time employment jumped by 47,100, up from 10,900 prior. The unemployment rate of 3.5%, which was already running at a 50-low, inched lower to 3.4%. The excellent numbers are unlikely to change the Reserve Bank of Australia’s rate policy. The RBA has eased the pace of rate hikes considerably, with two straight increases of a modest 0.25%. The markets have priced in another 0.25% hike at the December 6th meeting, which would bring the cash rate to 3.10%. With rates expected to peak in early 2023 around 3.5% or 3.6%, the end appears in sight for the current rate-tightening cycle. The robust labour market has put upward pressure on wages, which burst higher on Wednesday with a gain of 3.1% YoY in the third quarter, its strongest quarterly gain since 2013. The Reserve Bank of Australia will be wary of a spectre of a wage-price spiral if wages continue to accelerate, which would greatly complicate efforts to curb inflation. US retail sales for October pointed to consumer resilience, despite high interest rates and stubbornly sticky inflation. The headline and core releases both came in at 1.3%, above expectations and a strong rebound from the September data (0.0% headline, 0.1% core). This indicates that the US economy can handle additional rate hikes, with the Fed expected to raise rates to 5.0% or slightly higher. With the benchmark rate sitting at 4.0%, investors would do well to keep in mind that there is still some life left in the current rate-tightening cycle.   AUD/USD Technical 0.6603 and 0.6490 are providing support There is resistance at 0.6750 and 0.6821 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The Australian dollar closed Thursday down 50 points. The day's low did not reach the target support at 0.6595 for two reasons: the price did not settle under 0.6700, and the technical instruments on the lower four-hour chart managed to contain the bears' attack. In the current situation, the price is gathering strength at the level of 0.6700. If the price suddenly decides to follow the stop-losses of the bears, who are gradually building up positions against the aussie under the influence of declining US government bond yields, then after breaking the November 15 high at 0.6799, it could reach the 0.6871 target (August 5 low). Settling below 0.6700 will certainly significantly raise the probability of reaching the target support at 0.6595. The price received effective support from the MACD line on the four-hour chart, after which it returned above the balance indicator line (red moving line). But Marlin decided to firmly settle in the declining area, so we are waiting for another attempt to overcome the MACD line as a development of the situation according to the main scenario. Relevance up to 03:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327453

According to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, AUDUSD now looks side lined between 0.6590 and 0.6800 in the next few weeks. Key Quotes 24-hour view: “We expected AUD to ‘trade sideways between 0.6695 and 0.6785’ yesterday. Our view was incorrect as AUD dropped to 0.6635 before rebounding quickly to close at 0.6690 (-0.76%). Despite the decline, downward momentum has not improved much. That said, there is room for AUD to retest the 0.6635 level before the risk of a more sustained rebound increases. The next support at 0.6600 is not expected to come into view. Resistance is at 0.6715, followed by 0.6750.” Next 1-3 weeks: “After AUD soared to a high of 0.6798, we highlighted on Wednesday (16 Nov, spot at 0.6750) that while upward momentum has not improved much, there is room for AUD to advance further to 0.6820. Yesterday, AUD dropped below our ‘strong support’ level at 0.6670. The break of the ‘strong support’ indicates that AUD is not advancing further. AUD appears to have moved into a consolidation phase and is likely to trade between 0.6590 and 0.6800 for the time being.”

As of writing, AUD/USD is trading near 0.6710, within short-term bullish zone, above near-term support levels 0.6641 (200 EMA on the 1-hour chart), 0.6531 (200 EMA on the 4-hour chart). At the same time, the pair remains in the zone of long-term bearish markets, below key resistance levels 0.6760 (144 EMA on the daily chart), 0.6850 (200 EMA on the daily chart), 0.6900 (50 EMA on the weekly chart). In other words, AUD/USD is in an upward correction while remaining in the global downward trend zone. This means that despite the current growth of AUD/USD, short positions are still preferable. However, they need signals to resume. The first such signal will be a breakdown of the local support level 0.6680 and support 0.6641. In this case, the price will return inside the descending channel on the weekly chart, heading towards its lower border and the 0.6100, 0.6000 marks. In an alternative scenario, AUD/USD will again attempt to break into the zone above the 0.6760 resistance level. However, the target of this movement "upward" will be near the 0.6850 resistance level. A higher rise above the 0.6900 resistance level is hardly expected for now. Support levels: 0.6680, 0.6641, 0.6565, 0.6531, 0.6500, 6455, 0.6382, 0.6285, 0.6200, 0.6170, 0.5975, 0.5665, 0.5510 Resistance levels: 0.6760, 0.6800, 0.6855, 0.6900 Trading Tips Sell Stop 0.6670. Stop-Loss 0.6810. Take-Profit 0.6640, 0.6565, 0.6531, 0.6500, 6455, 0.6382, 0.6285, 0.6200, 0.6170, 0.5975, 0.5665, 0.5510 Buy Stop 0.6810. Stop-Loss 0.6670. Take-Profit 0.6855, 0.6900     Relevance up to 12:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327519

After an 18-month bull trend in the dollar, the FX outlook has become less clear. Further position adjustment could prompt a little more short-term dollar weakness, but we do not believe the conditions are in place for a major dollar bear trend just yet. Instead, we expect FX markets in 2023 to be characterised by less trend and more volatility. Source: Shutterstock G10: Less trend, more volatility The final quarter of 2022 has seen a breakdown in the otherwise orderly dollar bull trend – a trend which had been worth 5% per quarter over the first nine months of the year. That dollar rally had largely been driven by a Federal Reserve wanting to take policy into restrictive territory – a trend only exacerbated by the war in Ukraine. For all the current discussions about peak dollar and peak macro pessimism, we think it is still worth examining whether the conditions will be in place to deliver an orderly dollar bear trend in 2023. We think not and here are three reasons why: Driving the dollar bull trend since summer 2021 has been a Fed at first abandoning Average Inflation Targeting and then trying to get ahead of the inflation surge. A call on a benign dollar decline in 2023 requires the Fed to be taking a back seat. That seems unlikely. The stark message from both the Fed’s Jackson Hole symposium and the IMF autumn meetings was that central banks should avoid relaxing too early in their inflation battle – a move which would deliver the pain of recession without any of the sustained gains on inflation. We suspect it will be too early for the Fed to sound relaxed at its 14 December meeting and March 2023 may be the first opportunity for a decisive turn in Fed rhetoric. While a softer Fed profile may be a necessary condition for a turn in the dollar, a sufficient condition requires a global economic environment attractive enough to draw funds out of the dollar. 2023 global growth forecasts are still being cut – dragged lower especially by recession in Europe. ING forecasts merchandise world trade growth below 2% in 2023 – not a particularly attractive story for the trade-sensitive currencies in Europe and emerging markets. A liquidity premium will be required of non-dollar currencies. 2023 will be a year when central banks are initially still hiking into a recession and shrinking balance sheets. The Fed will reduce its balance sheet by a further $1.1tn in 2023 and the European Central Bank will be looking at quantitative tightening, too. Lower excess reserves will tighten liquidity conditions still further and raise FX volatility levels. Again, the bar not to invest in dollar deposits remains high – especially when those dollar deposits start to pay 5% and the dollar retains its crown as the most liquid currency on the planet. What do these trends mean for G10 FX markets? This probably means that the dollar can bounce around near the highs rather than embark on a clean bear trend in 2023. If the dollar is to turn substantially lower, we would favour the defensive currencies such as the Japanese yen and Swiss franc outperforming. Here, the positive correlation between bonds and equity markets may well break down via the bond market rallying on the back of a US recession and easier Fed policy. ING forecasts US 10-year Treasury yields ending 2023 at 2.75% - USD/JPY could be trading at 130 under that scenario.  Recession in Europe means that EUR/USD could be trading in a 0.95-1.05 range for most of the year, where fears of another energy crisis in the winter of 2023 and uncertainty in Ukraine will hold the euro back. Sterling should also stay fragile as the new government attempts to restore fiscal credibility with Austerity 2.0. We cannot see sterling being rewarded much more on austerity and suspect that GBP/USD struggles to hold gains over 1.20.  Elsewhere in Europe, some differentiation could emerge between the Scandinavian currencies. The Swedish krona may struggle to enter a sustained uptrend next year given its elevated exposure to the eurozone’s growth story, while the Norwegian krone could benefit from its attractive commodity exposure. However, NOK is an illiquid and more volatile currency, and would therefore face a bigger downside in a risk-off scenario. As shown in the chart below, commodity currencies look undervalued versus the dollar on a fundamental basis. However, a stabilisation in risk sentiment is a necessary condition to close the misvaluation gap. For the Australian and New Zealand dollars, an improvement in China’s medium-term outlook is also essential, so the Canadian dollar may emerge as a more attractive pro-cyclical bet given low exposure to the economic woes of Europe and China. Another factor to consider is the depth of the forthcoming house price contraction. We think central banks will increasingly take this into consideration and will try to avert an uncontrolled fall in the housing sector. However, this is potentially a very sizeable downside risk, especially for the currencies of commodity-exporting countries, which generally display the most overvalued property markets in the G10. To conclude, we think FX trends will become less clear in 2023 and volatility will continue to rise. FX option volatility may seem expensive relative to historical levels, but not at all when compared to the volatility FX pairs are actually delivering. We suspect risk management through FX options may become even more popular in 2023.   Valuation, volatility and liquidity in G10 Source: ING, Refinitiv EUR/USD: Dollar bromance will take some breaking   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/USD 1.035 Bearish 0.98 0.95 0.98 1.00 1.00 Bullish leap of faith is too dangerous: We are bearish on EUR/USD into the end of the first quarter of 2023. Key factors which have driven EUR/USD lower this year will remain largely in place. The softish US October CPI print may give the Fed some pause for thought, but should not be enough to derail it from some further tightening – taking the policy rate close to 5.00% in the first quarter of 2023. Another key factor for EUR/USD this year has been energy. Here, our team sees prices for both natural gas and oil rising from current levels through 2023. A difficult 2023 European winter for energy may well restrain the EUR/USD recovery later in the year, continuing to depress the eurozone’s traditionally large current account surplus.   Necessary but not sufficient: Tighter Fed policy has been at the forefront of this year’s dollar rally and a shift in the Fed tone (more likely in March 2023 than December 2022) will be necessary to see the short end of the US yield curve soften appreciably and the dollar weaken. But the sufficient condition for a EUR/USD turnaround is the state of affairs amongst trading partners. Are they attractive enough to draw funds away from USD cash deposits potentially paying 5%? That is a high bar and why we would favour the EUR/USD 2023 recovery being very modest, rather than the ‘V’ shape some are talking about. ECB will blink first: The case for a central bank pivot is stronger for the ECB than the Fed. The German economy looks set to contract 1.5% next year and at its 15 December meeting, the ECB may well use its 2025 forecast round to show inflation back on target. We see the ECB tightening cycle stalling at 2.25% in February versus the near 3% currently priced by the market for 2023. This all assumes a seamless ECB introduction of quantitative tightening and one that does not upset peripheral bond markets. Add in global merchandise trade barely growing above 1% next year (recall how the 2017-19 trade wars weighed on the euro) plus the risk of tighter liquidity spilling into financial stability – all suggest the market’s bromance with the dollar will continue for a while yet.  USD/JPY: 1Q23 will be a crucial quarter   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/JPY 140.00 Bearish 145.00 145.00 140.00 135.00 130.00 Clash of the titans: The stark divergence in monetary policy between the Fed and the Bank of Japan has been the primary driver of this year’s 15%+ rally in USD/JPY. In 2023, investors may question whether the BoJ is ready to tighten. The default view is that the perma-dovish BoJ Governor, Haruhiko Kuroda, will not be moved. However, the end of Governor Kuroda’s term on 8 April 2023 will no doubt lead to frenzied speculation on his replacement and whether a less dovish candidate emerges. Interest rate markets are starting to price a change – e.g. the BoJ’s 10-year target sovereign yield of 0.25% is priced at 0.50% in six months’ time. March 2023 will be especially volatile: The first quarter of 2023 will also see huge focus on the Japanese wage round, where a rise in wages is a prerequisite for the BoJ to tighten policy. Japanese politicians have been encouraging business leaders to raise wages, while at the same time, the government has been quite aggressive with fiscal stimulus to offset the cost-of-living shock. This period will also see the Fed release its dot plots (22 March), which may be the first real chance for the Fed to acknowledge a turn in the inflation profile. As such, this period (March/April) could see a big reversal lower in USD/JPY. FX Intervention slows the move: Most agree that USD/JPY is higher for good reasons (including the energy crisis) and that Japanese FX intervention can only slow, not reverse the move. The Japanese have already spent around $70bn in FX intervention between the 146 and 151 region in USD/JPY and will likely be called into further action based on our view of a stronger dollar over coming months. FX reserves are not limitless, of course, but Japan’s large stockpile of $1.1tn means that this campaign can continue for several more months. The purpose here is to buy time before the Fed cycle turns. Unless we end up with 6%+ policy rates in the US next year, we would expect USD/JPY to be ending 2023 nearer 130. GBP/USD: Running repairs   Spot Year ahead bias4Q221Q232Q233Q234Q23 GBP/USD 1.19 Mildly Bearish 1.10 1.07 1.11 1.14 1.14 Fiscal rescue plan: After September’s government-inflicted flash crash, GBP/USD is now recovering on the expectation of more credible UK fiscal plans and the softer dollar. As above, we doubt 2023 will prove the year of a benign dollar decline. And the risk is that the Fed keeps rates at elevated levels for longer. Given sterling’s large current account deficit and its transition to high beta on the external environment, we think it is too early to be expecting a sustained recovery here. Instead, we favour a return to the 1.10 area into year-end as the government introduces Austerity 2.0 and the Bank of England cycle is repriced lower. Tighter fiscal/looser monetary mix: At its meeting in early November, the BoE pushed back against the market pricing of the rate cycle – arguing that hikes close to 5% would see the UK economy contract 5%. Our call is that the BoE terminal rate will be closer to the 3.75% area than the 4.50% that the market prices today. As the BoE assesses the degree of tightening needed to curtail inflation, the government is discussing ways to fill around a £60bn hole in the budget. The plan will be revealed on 17 November, probably in a roughly 50:50 split between tax hikes and real terms spending cuts. We look for the UK economy to contract every quarter in 2023 – making it a very difficult environment for sterling. Sterling suffers from liquidity outages: This year’s BIS triennial FX survey saw sterling retain its position as the fourth most traded currency pair. Despite this, sterling does occasionally suffer from flash crashes. We think liquidity will be at a premium in 2023 and that a Fed taking real rates even higher as economies head into recession is a dangerous combination for sterling – where financial services make up a large section of the economy. GBP/USD realised volatility is now back to levels seen during Brexit and our market call for 2023 is that these types of levels will become more, not less, common. EUR/JPY: A turn in the cycle   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/JPY 144.50 Bearish 142.00 138.00 137.00 135.00 130.00 Downside risks into 1Q23: EUR/JPY has defied typical relationships with risk assets by gently rallying all year even as both bond and equity benchmarks sold off 20%. Driving that JPY underperformance has probably been BoJ policy and USD/JPY’s strong relationship with US 10-year yields. Both the eurozone and Japan have been hit by the energy shock, where external surpluses have quickly dwindled. As above, we tend to think there are downside risks to EUR/JPY in the first quarter of 2023 as speculation mounts over BoJ Kuroda's successor as well as the ECB potentially calling time on their tightening cycle at the February meeting. US10yr can drag EUR/JPY to 130 in 2H23: A large part of the JPY underperformance during 2022 has been driven by developments in the US bond market. USD/JPY consistently shows the most positive correlation to US 10-year Treasury yields of any of the G10 FX pairs – and far higher than EUR/USD. Consistent with ING’s view on the Fed cutting rates in the third quarter of 2023, our debt strategy team sees US 10-year yields starting to edge lower in the second quarter of 2023, and then falling 100bp in the second half of 2023. In theory, this should heavily pressure EUR/JPY into the end of the year. Financial stability risks increase: Lower growth and tighter liquidity conditions – at least through the early part of 2023 – increase the prospect of financial stability risks. Recall the Fed will be shrinking its balance sheet by $1.1tn in 2023 even as liquidity and bid-offer spreads continue to create difficult market conditions. The yen lost its shine as a safe-haven currency in 2022, but we suspect relative to the euro, some of that shine can be regained in a softer US rate environment. The EUR/JPY cycle should also turn if the ECB calls time on its tightening cycle at the 2 February meeting. EUR/GBP: Listless in London   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/GBP 0.87 Neutral 0.89 0.89 0.88 0.88 0.88 In the same macro boat: Both the eurozone and UK economies have been hit hard by the war in Ukraine and the surge in energy prices. Both saw sharp terms of trade declines into August and then a sharp reversal as natural gas prices dipped into the warm winter. There is not a substantial amount of difference between our German and UK quarterly growth profiles for 2023 – both contracting every quarter of the year. Perhaps one could argue that the UK is more exposed to higher mortgage rates given the shorter duration of fixed-rate mortgages in the UK. This could all make for a trendless EUR/GBP environment. Energy price guarantees could differentiate: One important determinant for UK growth in 2023 will be how the new government handles the Energy Price Guarantee. Former UK Prime Minister, Liz Truss, offered a two-year programme – subsequently cut back to six months after the UK fiscal crisis. How the UK consumer copes with having to pay market prices for energy will be key to the UK story in 2023 as well as how the EU as a whole copes with similar challenges. Currently, it seems that the ECB is concerned that the fiscal programmes in Europe are too generous and not particularly targeted – adding to the inflation challenge.    Political wild cards: To pick out a few political wild cards, the first is a re-run of the Scottish independence referendum. The Scottish National Party (SNP) has picked 19 October 2023 as the date – although such an exercise would likely have to be approved by the UK parliament. Currently, the SNP is pursuing an action through the Supreme Court to see whether London can indeed still veto the referendum. In Europe, the focus will probably be on the fiscal path taken by the new right-wing Meloni government and also the reform of the Stability and Growth Pact. Budgets submitted in late 2023 could become an issue were the rules to be tightened again.   EUR/CHF: Swiss National Bank to guide it lower   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/CHF 0.98 Bearish 0.95 0.93 0.90 0.90 0.92 Does the SNB want a stronger Swiss franc?: The Swiss National Bank this year said it made a conscious decision to allow nominal Swiss franc appreciation in light of the inflation environment. The three-month policy rate has been raised 125bp to 0.50% and the SNB says it wants to keep the real exchange rate stable. With inflation running at 3% in Switzerland versus 10% in its largest trading partner, the eurozone, the SNB in theory should be happy with something like 5-7% per annum nominal appreciation in the Swiss franc. That certainly was the story into the end of September but does not quite explain the Swiss franc's weakness over the last six weeks. Two-sided intervention: When hiking rates earlier this year the SNB also said it would be engaging in two-sided FX intervention. Ever since the start of the financial crisis in 2008, the SNB has been more familiar as a seller of the Swiss franc – including its 1.20 floor in 2011-2015. Now its strategy is changing and we read that as an objective to potentially manage the Swiss franc stronger in line with its ambitions to tighten monetary conditions. Earlier this year, we estimated that the SNB could possibly drive EUR/CHF to the 0.90 area in summer 2023 based on expected inflation differentials and the need for a stable real exchange rate. The risk environment should favour the franc: Central banks are communicating that they need to tighten rates into recession and remove the excess liquidity poured out during a series of monetary bailouts. Tighter monetary and financial conditions typically spell stormy waters for risk assets. With its still sizable current account surplus (worth 8% of GDP in the second quarter of 2022) the Swiss franc should perform well during this stage of the global economic cycle. Closer to home, the European economic cycle and the ECB discussing quantitative tightening into early 2023 will prove a challenge to peripheral eurozone debt markets and likely reinforce the franc as a eurozone hedge. EUR/NOK: Not for the faint of heart   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/NOK 10.33 Bearish 10.30 10.15 9.95 9.70 9.60 Risk sentiment remains key: The krone is not a currency for the faint of heart. It is the least liquid currency in the G10 space, making it considerably exposed to negative shifts in global risk sentiment and equity market turmoil. It is, at this stage, way too early to call for a turn in equities, and a hawkish Fed into the new year may actually mean more pain for risk assets, at least in the near term. A recovery in global sentiment should offer support to NOK in the second half of next year, but restoring market confidence in a very high-beta currency is no easy feat. Norges Bank policy: The krone’s underperformance in 2022 was exacerbated by Norges Bank effectively sterilising oil and gas profits via a large increase in daily NOK sales. In November, FX daily sales have been scaled back from NOK4.3bn to NOK3.7bn, and we think there could be some interest by NB to further ease the pressure on the currency via smaller FX sales. With recent dovish hints suggesting that the NB hiking cycle may peak at 3.0% (with most of the country on variable mortgage rates, many more rate hikes could be difficult to tolerate), allowing a stronger currency to do some inflation-fighting sounds reasonable.  Energy prices: If indeed markets enjoy a calmer environment in 2023 and NB favours a stronger currency, then NOK is left with considerable room to benefit from a still strong energy market picture for Norway. There is probably an optimal range for oil and – above all – gas prices to trade at elevated levels but not such high levels that would significantly hit risk sentiment. For TTF, this could be somewhere around 150-200 €/MWh. This a plausible forecast for next year, but the margin for error can be very large. We see EUR/NOK at 10.50 in the fourth quarter of 2023, but NOK hiccups along the way are highly likely. EUR/SEK: Eurozone exposure a drag on SEK   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/SEK 10.80 Neutral 10.85 10.70 10.60 10.40 10.50 Riksbank’s policy: The Riksbank delivered more than one hawkish surprise in 2022, including a 100bp rate hike. This appeared to be part of a front-loading operation where lifting the krona was seen as a welcome side effect. In practice, and like in many other instances in the G10, the high volatility environment meant that short-term rate differentials played a negligible role in FX. So, despite a wide EUR-SEK negative rate differential throughout 2022, SEK was unable to draw any real benefit. That differential has now evaporated, but we expect 125bp of tightening (rates at 3.0%) in Sweden versus 75bp in the eurozone, which could suggest some EUR/SEK downside room in a more stable market environment. Also, a slowdown in FX purchases by the RB, now that reserves are back to the 1H19 levels, should remove some of the pressure on SEK. European picture: Sweden is a very open economy with more than half of its exports heading to other EU countries. Our expectations are that 2023 will see a rather pronounced eurozone recession and that the energy crisis will extend into the end of next year. Barring a prolonged period of low energy prices (and essentially an improvement in the geopolitical picture) in Europe, we doubt SEK will be able to enter a sustainable appreciation trend in 2023 as sentiment in the eurozone should remain depressed. Valuation: We are not fans of the euro in 2023, which means that our EUR-crosses forecasts reflect the weaker EUR profile. We see some room for EUR/SEK to move lower throughout the year – also considering that we estimate the pair to be around 9.0% overvalued. However, the high risk of a prolonged energy crisis in the eurozone means that SEK is significantly less attractive than other pro-cyclical currencies next year. Incidentally, SEK is highly correlated to the US tech stock market, which looks particularly vulnerable at the moment. A return to 10.00 or below would likely require a significant improvement in European sentiment. USD/CAD: Loonie is an attractive pro-cyclical bet   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/CAD 1.33 Bearish 1.34 1.32 1.30 1.26 1.24 Commodities and external factors: Our commodities team expects Brent to average slightly above $100/bbl next year, and Western Canadian Select around $85/bbl. Along with our expectations for higher gas prices, the overall commodity picture should prove rather supportive for the Canadian dollar in 2023. In our base-case scenario, where global risk sentiment gradually recovers but two major risk-off forces – Ukraine/Europe and China – remain, CAD would be in an advantageous position, since Canada has much more limited direct exposure to China and Europe compared to other commodity-exporting economies.  Domestic economy: If the US proves to be a relative 'safe-haven' in the global recession, therefore withstanding the downturn better than other major economies like the eurozone, this should offer a shield to Canada’s economy, which is heavily reliant on exports to the US. There is probably one major concern for the domestic economy: house prices. Canada is among the most vulnerable housing markets in the world, with price-to-income ratios around 9x in many cities (compared to 5-6x in the US). Whether we’ll see a sizeable but controlled descent or a fully-fledged housing crash will depend on the Bank of Canada and the depth of the recession. Monetary policy and valuation: It does appear that the BoC has started to consider domestic warning signals (probably, also house prices), and recently shifted to a more moderate pace of tightening. Markets are currently expecting rates to peak around 4.25/4.50% in Canada, and we tend to agree. Barring a rapid acceleration in the unemployment rate, a housing crash should be averted. It is also likely that the BoC will start cutting before the Fed in 2023. All in all, accepting the downside risks stemming from the housing market and/or a further deterioration in risk sentiment, we see room for a descent in USD/CAD to the 1.25 level towards the end of 2023. In our BEER model, CAD is around 20% undervalued in real terms. AUD/USD: Riding Beijing’s roller coaster   Spot Year ahead bias4Q221Q232Q233Q234Q23 AUD/USD 0.68 Mildly Bullish 0.66 0.66 0.68 0.69 0.70 Exposure to China: The Australian dollar is a high-beta currency, and the direction of global risk sentiment will be the key driver next year. We think that a gradual recovery in sentiment will be accompanied by a still challenging energy picture, which may force investors to choose which pro-cyclical currencies to bet on. When it comes to AUD, the China factor will remain very central, as Australia has the most China-dependent export machine in the G10. Our economics team’s baseline scenario is that the real estate crisis will be the main drag on growth in China and while retail should recover on looser Covid rules, slowing global demand should hit exports. One positive development: the new Australian government is seeking a more friendly relationship with Beijing, paving the way for the removal of export curbs next year. Commodities and growth: Iron ore remains Australia’s main export (estimated at $130bn in 2022), and it is a very sensitive commodity to China's real estate sector. Our commodities team thinks a return to $100+ levels is unlikely given the worsening Chinese demand picture, but still forecasts prices to average $90/t in 2023. The second and third largest exports are oil and natural gas ($100bn combined). Here, we see clearly more upside room for prices, especially on the natural gas side. On balance, we expect the commodity picture for Australia to be rather constructive next year, which could offer a buffer to the Australian economy during the downturn. Growth in 2022 should have topped the 4% mark, but that will be much harder to achieve in 2023. The combination of higher rates, reset mortgages, a slowing housing market and possibly softening labour market should bring growth back closer to 3%. This would still be an extremely strong outcome against the backdrop of global weakness.   Monetary policy and valuation: The Reserve Bank of Australia has been one of the 'pioneers' of the dovish pivot, and a return to 50bp increases seems unlikely, as the Bank is probably monitoring the rather overvalued housing market, and the inflation picture is less concerning than in the US or in Europe. Most Australian households have short-term fixed mortgage rates, and we could see a deterioration in disposable income (especially at the start of the year). We think the RBA will be careful to avert an excessively sharp housing contraction, and we expect rates to peak at 3.60% (well below the Fed and the Reserve Bank of New Zealand) and cuts from 3Q23. This would mean a less attractive carry – and less upside risk in an optimistic scenario for global sentiment; but also less damage to the economy, which may play in AUD’s favour in our baseline scenario. Valuation highly favours AUD, as the positive terms of trade shock means that AUD/USD is 20% undervalued in real terms, according to our behavioural equilibrium exchange rate (BEER) model. We have a moderately upward-sloping profile for the pair in 2023, but high sensitivity to risk sentiment and China suggests downside risks remain high. NZD/USD: Dodging the housing bullet   Spot Year ahead bias4Q221Q232Q233Q234Q23 NZD/USD 0.62 Mildly Bullish 0.60 0.60 0.62 0.63 0.64 Monetary policy: The Reserve Bank of New Zealand has given very few reasons to believe it is approaching a dovish pivot. Markets are currently expecting the Bank to hike well into 2023, and take rates to around 5.0%. While inflation (7.2% year-on-year) and job market tightness (unemployment at 3.3%) both remained elevated in the third quarter, there are growing concerns about the rapid downturn in the New Zealand property market, which in our view will trigger either an earlier-than-expected end to the tightening cycle or a faster pace of rate cuts in 2023. Housing troubles: The RBNZ recently published its financial stability report, where it showed relatively limited concern about households’ ability to withstand the forthcoming downturn in house prices. In its August 2022 forecasts, the RBNZ estimated that the YoY contraction in house prices will reach 11.6% in the first quarter of 2023. However, that implied an Official Cash Rate at 4.0%, so only 50bp of extra tightening from now, which seems too conservative now. House prices have fallen 7.5% from their first quarter 2022 peak so far, but the trend may well accelerate, especially given a hawkish RBNZ and the risk of slowing global demand hitting the very open New Zealand economy. External drivers and valuation: Even assuming a constructive domestic picture in the housing market and an attractive yield for the currency in 2023, external factors will determine how much NZD can draw any benefit. As for AUD, risk sentiment and China are the two central themes. The New Zealand dollar is more exposed to risk sentiment (as it is less liquid and higher-yielding) than AUD, but probably less exposed to China’s story. In particular, the real estate troubles in China may well hit Australia via the iron ore channel, while NZ exports (primarily dairy products) are much more linked to China’s Covid restrictions, which look likely to be gradually scaled back. In our base case, the two currencies should largely move in tandem next year. The real NZD/USD rate is 15% undervalued, according to our BEER model. EUR/DKK: Tricky mix of intervention and rates   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/DKK 7.44 Neutral 7.44 7.44 7.44 7.44 7.45 Central bank policy: Danmarks Nationalbank delivered FX intervention worth DKK45bn in September and October to defend the EUR/DKK peg. On 27 October, it opted for a smaller rate hike (60bp) compared to the ECB (75bp), which briefly sent EUR/DKK close to the 7.4460 February highs before rapidly falling back to 7.4380/90. We think it will be a busy year ahead for the central bank, as we expect very limited idiosyncratic EUR strength and potentially more pressure on EUR/DKK. Having now exited negative rate territory, DN has much more room to adjust the policy rate for a wider rate differential with the ECB if needed. However, with inflation running above 10% in Denmark, DN may prefer FX intervention over dovish monetary policy to support the peg. We have recently revised our EUR/DKK forecast, and expect a return to 7.4600 only in 2024. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  

The Australian dollar has posted losses over three straight days and is sharply lower on Monday. In the North American session, AUD/USD is trading at 0.6610, down 0.96%. RBA shifts gears The Reserve Bank of Australia has changed course and eased up the pace of hikes, but with inflation still accelerating, is it too soon? After a string of 50-bp increases, the RBA has slowed down and delivered two straight hikes of 25 bp. The RBA was the first major central bank to make the shift, and the Federal Reserve is widely expected to ease to a 50-bp increase at the December meeting. Read next: Eurozone may find it hard to soak up big rate hikes. German PPI decreased by over 4%...| FXMAG.COM The thinking behind smaller rate hikes is it will cause less of a shock to the economy and ease the pain that households and businesses are going through as rates go up and up. At the same time, the RBA has circled inflation as public enemy number one, and it will have to keep hiking until it detects a peak in inflation. The RBA may be easing up on the pace of rates, but Governor Lowe is using the jawbone tactic to dampen any expectations that the central bank is winding up its tightening. To this end, Lowe has warned that the bank would not hesitate to return to oversize rate hikes if needed. The RBA is keeping a close eye on wage growth, which jumped to a nine-year high in Q3, gaining 3.1%. The RBA is wary of the spectre of a wage-price spiral if wages continue to accelerate, which would greatly complicate its efforts to curb inflation. The steady stream of hawkish statements from Fed members has chilled risk appetite and dashed hopes of a Fed U-turn on rate policy. The US dollar has bounced back after taking a beating following the inflation report earlier this month. The Fed has long insisted that one or two reports showing weaker inflation does not make a trend, although risk sentiment has nonetheless when inflation drops. If November’s inflation data is lower than anticipated, we can expect risk appetite to rise again, at the expense of the US dollar. The markets have priced in a 50-bp hike next month, although some Fed members have stated that a 75-bp move remains on the table. AUD/USD Technical AUD/USD is testing support at 0.6609. Below, there is support at 0.6541 There is resistance at 0.6704 and 0.6772 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie extends slide - MarketPulseMarketPulse

The aussie fell 66 pips on Monday, having reached the target support at 0.6595 as the lower shadow of the one-day candle. This morning, the price is slightly correcting to the upside, but the mood, according to the falling Marlin oscillator, is still declining.     Breaking through the 0.6595 level will make the 0.6514/32 range available as a target. The range corresponds to the highs of the wide-range consolidation in late September and early October.     The price is not yet strongly reflected from the support on the four-hour chart, within a standard consolidation. There is still no convergence with the Marlin oscillator, so the downward direction prevails. But before you open short positions, wait for the price to overcome the 0.6595 level, that is, when we receive a trading signal. Relevance up to 03:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327734

With the movement inside the Bullish Pitchfork channel on the 4 hour chart as well as the appearance of Falling Wedge pattern, then the AUD/USD commodity currency pair has a potential to continue its rally in the near future to move up and try to break above the level 0,6701. If this level successfully break above then the next level to test is 0,6799. Nevertheless, please note that if there is a downward correction if it manages to break below the 0.6475 level, it is certain that the potential for bulls from AUD/USD in the 4-hour chat will be hampered.   Relevance up to 02:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114327

Trading volumes were quite low early this week because of the upcoming holiday in the US and increased expectations that the Fed will continue aggressively raising rates, at least until the end of this year. Even so, optimism prevailed in markets because the latest inflation data in the US noticeably decreased. The worsening situation in China, where the coronavirus infection continues to run rampant, has also prompted authorities to suspend school and business activities in Covid-infected areas. This points to a likely decline in the country's economic growth, which in turn is bound to have an impact on exports and imports to the US and other economically advanced countries. Market volumes will continue to decline, which will lead to a strong increase in volatility. However, it is unlikely to lead to any noticeable changes in the forex market because the sideways trend will continue, with some local rises or falls in the pairs where the dollar is present. A similar scenario could be seen in the stock markets, connected firstly with the above-mentioned factors, and secondly with extremely high uncertainty about the Fed's decision on rates and the bank's plans and forecasts for next year. Most likely, the decline will continue even amid positive news or data on the US economy. The focus will remain on the October Fed minutes, which might be the reason for noticeable movements. Forecasts for today: USD/JPY The pair is trading below the strong resistance level of 142.25. A break above it might push the quote to 143.30. AUD/USD The pair might resume the decline amid negative news from China and gloomy sentiment in the markets. A decline below 0.6585 might push the quote down to 0.6500.   Relevance up to 08:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327774

AUD/USD gains some follow-through traction on Wednesday amid the prevalent USD selling bias. Bets for less aggressive Fed rate hikes and stability in the equity markets weigh on the greenback. Investors now look to the US macro data for some impetus ahead of the FOMC meeting minutes. The AUD/USD pair attracts some buying near the 0.6630 area on Wednesday and climbs to a two-day high during the early European session, albeit lacks follow-through. The pair is currently placed just above the 0.6650 level and remains well supported by modest US Dollar weakness. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, is seen extending its pullback from over a one-week high and losing ground for the second straight day. Growing acceptance that the Federal Reserve will slow the pace of its policy-tightening cycle turns out to be a key factor that continues to weigh on the greenback. Apart from this, stability in the equity markets further undermines the safe-haven buck and benefits the risk-sensitive Aussie. That said, concerns about the potential economic headwinds stemming from a spike in new COVID-19 cases in China and the imposition of fresh lockdowns keep a lid on the optimism. Furthermore, the recent hawkish remarks by several Fed officials suggest that the US central bank might continue to raise borrowing costs to tame inflation. This, in turn, should limit any deeper losses for the buck and cap the upside for the AUD/USD pair. Traders might also refrain from placing aggressive bets and prefer to wait for a fresh catalyst from the release of the November FOMC meeting minutes. Hence, it will be prudent to wait for strong follow-through buying before confirming that the pullback from over a two-month high touched last week has run its course and positioning for any further gains. Heading into the key event risk, traders on Wednesday might take cues from the US macro data - Durable Goods Orders and the usual Weekly Initial Jobless Claims. This, along with the broader risk sentiment, will influence the USD demand and provide some impetus to the AUD/USD pair.  

The aussie has successfully broken through the resistance at 0.6700 and it is now aiming for the 0.6871 target, the low of August 5. The Marlin oscillator does not share the optimism, but it is forced to move up. Yesterday's momentum was set by the fact that the Reserve Bank of New Zealand hiked the rate by 0.75%, but today the USA is celebrating a holiday, so we expect less volatility. If the price weakens enough to reach the level of 0.6700, it could fall further and hit 0.6595, which will be followed by a change in the trend. It is uncertain whether the price will reach the intended target at 0.6871 or return to 0.6700. On the 4-hour chart, the price settled above the balance and MACD indicator lines, the Marlin oscillator is rising in the positive area. There is an uptrend, but the whole question is about the aussie's strength. Commodity markets are rising weakly and oil lost 4.2% yesterday.   Relevance up to 03:00 2022-11-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327983

AUD/USD is inching strongly towards the crucial hurdle of 0.6800 as US Dollar is facing immense selling pressure. The US Dollar is exposed to test a three-month low at 105.34 amid a risk appetite theme. Economists at ANZ Bank believe that the sell-off in US Dollar is exaggerated as current inflation is well above 2% target. The AUD/USD pair is marching firmly towards the round-level hurdle of 0.6800 in the early European session. The asset has gained immense buying interest from the market participants as the US dollar index (DXY) has extended its losses. A stellar improvement in investors’ risk appetite has underpinned the Aussie Dollar. The major has continued its two-day winning spell and is prepared to display more upside amid upbeat market sentiment. The US Dollar has displayed sheer losses after surrendering the critical support of 106.00. The mighty US Dollar has dropped to near 105.70 and is exposed to test the three-month low of 105.34. S&P500 futures are holding their gains recorded in Tokyo. The 500-stock basket is expected to remain quiet as US markets will remain closed on Thursday on account of Thanksgiving Day. The 10-year US Treasury yields are hovering below 3.69%. Less-hawkish opinions by the Federal Reserve (Fed) policymakers as recorded in Federal Open Market Committee (FOMC) minutes have cleared that days of a bigger rate hike by the US central bank are over. To reduce financial risks and to observe the efforts made by Fed in decelerating inflation yet, teammates of Fed chair Jerome Powell have vouched for slowing down the interest rate hike pace. Economists at ANZ Bank have a contrary opinion as they believe that softer-than-expected US inflation triggered a sell-off in the US Dollar and market reaction to the latest inflation print is exaggerated. Inflation remained near 7.7%, which is well above the central bank’s target of 2%. They further added that “It is not enough for the Fed to be confident that inflation is on track to move back to 2% sustainably”. On the Aussie front, weaker S&P PMI data has not impacted the Aussie Dollar. The Manufacturing PMI landed at 51.5, lower than the expectations of 52.4. While Services PMI dropped to 47.2 vs. the consensus of 49.1.

AUD/USD is aiming to stabilize above the 0.6760 hurdle for further gains. The US Dollar is displaying a subdued performance as the overall market mood is extremely bullish. Australian Retail Sales data is expected to decline to 0.3% vs. the former release of 0.6%. The AUD/USD pair is displaying a lackluster performance in the Asian session amid a quiet market mood. The Aussie asset has managed to reclaim the 0.6760 hurdle after a minor sell-off in early Tokyo. Volatility in the currency market has been squeezed dramatically as trading activity is low in the United States due to Thanksgiving Day. Meanwhile, the US Dollar is displaying a subdued performance in the Tokyo session after a wild move in early trade. The US dollar has turned sideways as the economic calendar has nothing much to offer. As odds for a slower rate hike by the Federal Reserve (Fed) have strengthened, the alpha generated by US Treasury bonds is under investors selling list. The 10-year US Treasury yields have extended their losses to near 3.66%. Investors are pouring funds into the US Treasury bonds and risk-sensitive assets on the expectation that a shift to lower rate hike measures by the Fed in its December monetary policy meeting will accelerate economic projections. The dictations from the Federal Open Market Committee (FOMC) have already cleared that deceleration in the rate hike pace is necessary to reduce financial risks. On the Australian dollar front, investors are shifting their focus toward the release of Retail Sales data. The economic data is expected to decline to 0.3% vs. the prior release of 0.6% on a monthly basis. A decline in consumer demand would delight the Reserve Bank of Australia (RBA) as lower retail sales will force the producers to lower their prices to accelerate demand. This might result in a decline in inflation ahead.  

This morning, the Australian dollar decided to form a double top on the daily chart. The base of this figure is the nearest target level at 0.6595. Crossing the base sets the next target at 0.6370. But the price has two intermediate target levels on the way, from which there can be a correction at 0.6514/32, 0.6453. Disappointing data on retail sales for October, which showed -0.2% against expectations of growth of 0.5%, was the reason why the aussie has done such a drastic move. On the four-hour chart, the price settled below the MACD indicator line, went deep under the support of 0.6700, and the Marlin oscillator entered the negative territory. Complete downward movement. We expect progress, the aussie to reach the nearest support of 0.6595.     search   g_translate     Relevance up to 03:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328242

The Australian dollar fell after the RBA governor said Australia had a better chance of a soft landing of the economy than any other developed country. First of all, Philip Lowe drew attention to a fairly successful effort to curb wage growth in the country, allowing inflation to stay well within the limits set by the regulator. Om Monday, Philip Lowe spoke before the Senate estimate hearing in Canberra. In regard to achieving a soft landing for the economy, he said, "it's not guaranteed but where I sit today, I think we have a better chance than most other countries of pulling it off." He added that the best outcome for Australia would be for wages to pick up as they have, but not go too much further. The wage growth in Australia is now at a weaker rate than in other countries, which will allow the governor to count on a quick victory over inflation once the world situation stabilizes. As Lowe explained, the difference with other countries on this issue stemmed from the fact that the RBA was the first central bank to reduce the pace of interest rate hikes to a quarter percentage point at its last two meetings. The central bank is expected to raise interest rates to 3.1% next week from the current 2.85%, as it does not want to ignore the experience of its counterparts in trying to contain high inflation and bring it back under control. Australian policymakers have created plenty of room to operate, saying they are open to resuming a half-point rate hike if it is necessary. Currently, the RBA predicts that inflation will peak at 8% this year and then decline to 3.25% at the end of 2024. When asked if markets still trust the central bank's policy, the governor said that they did trust. Lowe pointed to the expected inflation rate accounted for by the financial markets over the next five years, which shows that prices in Australia are likely to return to the RBA's 2-3% target range. "That implies the people putting money on the line do trust the RBA," he said. The RBA governor also stressed that he was closely monitoring electricity prices and the situation around the housing market, which is one of the first to respond to high interest rates and points to the possibility of a tipping point in the economy. In his opinion, the situation in the real estate market is now in perfect order and there is no reason to worry. "If we can address those two issues then that will make a substantial contribution in bringing inflation back down over the next couple of years," Lowe told the Senate. He also noted that Australia's economy with a A$2.2 trillion turnover was doing fine with rising rates and coping with high inflation, although recent data suggested that cost-of-living growth was starting to decline. According to the latest data, retail sales in Australia fell by 0.2% in October, the first drop this year, with turnover in all sectors except food also falling sharply this month. This is in addition to weakening consumer confidence and declining real estate prices. Such changes are not surprising, as inflation-adjusted wages are at their lowest level in 11 years, indicating that households are not doing as well as they used to.   Relevance up to 08:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328298

The Australian dollar has started the trading week with sharp losses. AUD/USD is down 0.70% in Europe, trading at 0.6704. China jitters send Australian dollar tumbling Covid cases continue to rise in China despite the government’s zero-Covid policy, and the mass lockdowns have triggered protests across China. The demonstrators have clashed with police and some have even called for Chinese President Xi to step down. The scale of the unrest has sent jitters through the global markets, which are expected to cause new supply-chain issues and chill domestic demand. The unrest in China has put a damper on risk appetite and sent the US dollar higher. The Australian dollar is particularly sensitive to developments in China, as the Asian giant is Australia’s number one trading partner. The Australian dollar fell more than 1% earlier today but has pared some of those losses. Still, if there is further negative news out of China, the Aussie will likely lose more ground. Adding to the Australian dollar’s woes was a soft retail sales report for October. Retail sales fell 0.2% MoM, down from 0.6% in September and below the consensus of 0.4%. It was the first decline since December 2021 and will renew concerns that the domestic economy is slowing down due to the Reserve Bank of Australia’s steep rate-hike cycle. The RBA has eased the pace of hikes but remains wary of a wage-price spiral, and  Governor Lowe has warned that the central bank will not hesitate to return to oversize rate hikes if needed. After an abbreviated week due to the Thanksgiving holiday, it’s a busy week for US releases. CB Consumer Confidence will be released on Tuesday, with the November report expected to dip to 100.0, down from 102.5. The key release of the week is nonfarm payrolls on Friday, which could have a major impact on the Fed’s decision to raise rates by 50 or 75 basis points at the December 14th meeting. Currently, the likelihood of a 50-bp hike is about 75%, versus 25% for a larger 75-bp increase.   AUD/USD Technical AUD/USD is testing support at 0.6706. Below, there is support at 0.6633 There is resistance at 0.6820 and 0.6903 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

AUD/USD regains positive traction on Tuesday amid the emergence of fresh USD selling. Bets for less aggressive Fed rate hikes, a recovery in the risk sentiment weighs on the buck. China’s COVID-19 woes should cap optimistic moves and act as a headwind for the Aussie. The AUD/USD pair attracts some dip-buying near the 0.6640 region on Tuesday and maintains its bid tone through the early European session. The intraday positive move lifts spot prices back above the 0.6700 mark and is supported by the emergence of fresh US Dollar selling. A combination of factors fails to assist the greenback to capitalize on the overnight goodish rebound from the very important 200-day SMA and offers some support to the AUD/USD pair. A dovish assessment of the November FOMC meeting minutes released last week cemented market bets for a relatively smaller 50 bps rate hike in December. This, along with a slight recovery in the global risk sentiment, undermines the safe-haven USD and benefits the risk-sensitive Aussie. That said, the worsening COVID-19 situation in China, should keep a lid on any optimistic move in the markets and act as a headwind for the China-proxy Australian Dollar. In fact, China reported another record-high number of COVID-19 infections on Monday and the imposition of new restrictions prompted a wave of protests in several cities. This adds to worries about a further slowdown in economic activity and might continue to weigh on the market sentiment. Furthermore, the overnight hawkish comments by influential FOMC members should help limit the downside for the buck and further contribute to capping the upside for the AUD/USD pair. It is worth recalling that St. Louis Fed President James Bullard, New York Fed President John Williams and Fed Vice Chair Lael Brainard reiterated that more rate hikes are coming. This, in turn, warrants some caution for aggressive bullish traders and positioning for further gains. Nevertheless, the AUD/USD pair, for now, seems to have snapped a two-day losing streak and remains at the mercy of the USD price dynamics. Market participants now look to the release of the Conference Board's US Consumer Confidence Index for some impetus later during the early North American session. The focus, however, will remain on Fed Chair Jerome Powell's speech on Wednesday and this week's important US economic data, including the NFP report on Friday.

Markets are keeping an eye on developments in China with some concern as they prepare for two key risk events – Jerome Powell's speech tomorrow and payrolls on Friday – which look more likely to push rate expectations higher rather than endorsing dovish speculation. When adding the very inverted US yield curve, a dollar recovery may be on the cards this week In this article USD: Bracing for a hawkish Powell EUR: Few signs of abating inflation GBP: Bailey's testimony in focus CAD: Growth figures should allow 50bp hike next week   Markets are bracing for tomorrow’s speech by Fed Chair Jerome Powell, where he is expected to sound hawkish USD: Bracing for a hawkish Powell Risk assets underperformed at the start of this week, with two major variables affecting global sentiment. First, social unrest in China. Investors appear to be gravitating towards the risk-negative narrative of possible instability in the country, despite the fact that this may prompt China to expedite its exit from Covid restrictions – likely a risk-on development. The second element relates to concerns that this week's events, which include tomorrow’s speech by Fed Chair Jerome Powell (where we see a higher likelihood that he will sound hawkish) and US jobs data (which could stay strong), may cause the Fed's communicated and perceived narrative to drift away from dovish pivot expectations. As mentioned in yesterday’s daily, a 2Y10Y UST curve displaying a 75/80bp inversion is indicating a common perception that the Fed will push forward with tightening into a recession. This should be a dollar-positive combination. Today's US calendar includes some housing data as well as the Conference Board Consumer Confidence Index, which is expected to have dropped further in November. There are no scheduled Fed speakers after hawkish comments by John Williams and James Bullard yesterday. We believe the dollar can find some further support today as markets favour defensive trades ahead of key events later this week. Prior to Powell's speech, a return to 107.00/107.50 levels in DXY is possible. Francesco Pesole EUR: Few signs of abating inflation EUR/USD failed to break the 1.0500 threshold yesterday and has dropped back to the 1.0350/1.0400 area after a widespread recovery in the dollar. The eurozone's exposure to China is one key driver to watch for the euro, and it could easily outweigh the benefits of lower energy prices. Today, however, the domestic story will receive a lot of attention. Inflation readings in Germany and Spain will provide hints about eurozone-wide data due tomorrow. The consensus is for German headline inflation to stabilise at 10.4% and eurozone figures to slow slightly tomorrow. It's difficult to see this significantly altering the ECB's narrative, but an above-consensus print may prompt markets to seriously consider a 75bp hike in December (61bp are currently priced). Still, hawkish ECB expectations have not often translated into a stronger euro, and we continue to see the dollar doing the heavy lifting in driving EUR/USD moves. At this point, we believe a drop below 1.0300 is more likely than a rebound to 1.0500. Elsewhere in Europe, Sweden’s GDP numbers have just been published, disappointing on the downside with 2.5% year-on-year growth for the third quarter. Retail sales for October also came in weaker. The next Riksbank meeting is far out (early February), but a softening in data could favour a 25bp hike after last week’s 75bp move. We expect EUR/SEK to end the year around 10.85/10.95. GDP figures will also be released in Switzerland this morning, and a deceleration to 1.0% YoY in growth is expected for 3Q.  Francesco Pesole GBP: Bailey's testimony in focus Today's UK calendar is light on data, but there is one event to keep an eye on: Bank of England Governor Andre Bailey's testimony to the House of Lords. A significant shift in Bailey's policy rhetoric two weeks before the BoE meeting appears unlikely, but the proximity to the meeting also means that markets tend to over-interpret MPC members' comments. In our opinion, the most likely scenario for the December announcement is a 50bp increase; markets are currently pricing in 57bp. Cable has fallen back below 1.2000 as the dollar regained some ground, and we see room for further depreciation into the end of the year as the greenback finds more support and the pound suffers from a bleak UK economic outlook. Francesco Pesole CAD: Growth figures should allow 50bp hike next week As the dollar corrected lower during the past month, the Canadian dollar has lagged behind its G10 counterparts. The decline in crude prices, which have returned to the trading range observed before Russia's invasion of Ukraine, has been the main factor holding back the loonie's recovery. Our commodities team continues to see the upside risks for oil prices into the new year, and CAD’s limited exposure to China/Ukraine and superior liquidity are good arguments to expect CAD to outperform other procyclical currencies in 2023, should risk sentiment stabilise. Today, Canada’s third-quarter growth data will be published, and expectations are for a 1.5% annualised read. This should enable the Bank of Canada to hike by 50bp next week. Francesco Pesole TagsFX Dollar CAD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  

The Australian dollar has rebounded on Tuesday after a poor start to the week. In the European session, AUD/USD is trading at 0.6737, up 1.28%. What goes down … can go right back up. This has been the story early this week for the Australian dollar, which tumbled 1.5% on Monday but has recovered most of those losses today. The Australian dollar was hit hard after a weak retail sales report and widespread unrest in China over the country’s zero-covid policy. The unrest in China has put a damper on risk appetite, as the result is likely to exacerbate supply chain disruptions and dampen domestic spending. Investors may have sensed an opportunity for profit-taking after the massive slide on Monday, which would help explain the rebound today. Fed members keep up the blitz The Fed doesn’t hold a policy meeting for another two weeks, but the Fedspeak blitz, which started after the soft US inflation report sent the markets in a tizzy, continued in earnest on Monday. Fed member Bullard said on Monday the markets could be underestimating the likelihood of higher rates and that the Fed funds rate will have to reach the bottom end of the 5%-7% range in order to curb inflation, which has been more persistent than anticipated. Fed member Williams added that the Fed needed to do more work to tame inflation, which is “far too high”. Fed member Brainard, a dove, expressed concern about inflation expectations rising above the Fed’s 2% target. The Fed has been aggressive in telegraphing the markets that its rate cycle is far from over, a message we’re likely to continue to hear in the coming weeks.   AUD/USD Technical AUD/USD is testing resistance at 0.6707. The next resistance line is 0.6829 There is support at 0.6633 and 0.6511 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

Markets plunged on Monday as unrest in China, which was due to frustration at lockdowns, led to sell-offs. Equity markets closed lower, while crude oil prices dropped significantly. But the downturn is unlikely to last long because even though China's demand for commodities, goods and production capacity is important, a lot depends on the statements of world central banks. For example, St. Louis Fed President James Bullard said interest rates will continue to rise as inflation remains high. Lael Brainard, Thomas Barkin and John Williams said roughly the same thing, although they did not claim that aggressive rate hikes should continue. The upcoming speech of Jerome Powell is also expected to be hawkish, which can put pressure on stock markets and support dollar. There are some that believe that stocks will rally because investors have long since played down the Fed's extreme monetary policy stance. Markets are also reacting with great fervor to positive news, such as the short-term increase after the US published its latest inflation data. If Powell's rhetoric also does not turn out to be hawkish, there is a good chance that risk appetite will surge ahead of the Fed's December meeting. Forecasts for today: USD/CAD The pair is showing a local reversal on the back of a strong rebound in crude oil prices after its fall yesterday. A drop below 1.3415 will push quotes to 1.3320. AUD/USD The pair is rising amid improving market sentiment. A break above 0.6720 could bring the quotes to 0.6800. Relevance up to 08:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328414

After the aussie sharply fell by 100 pips on Monday, the price momentarily overcame the decline on Tuesday, but closed the day below resistance at 0.6700. The bears won. The bulls' actions were probably due to the growth in oil (WTI 0.70%) and other commodities. Now the price, in connection with the release of the US employment and GDP data today, will pay more attention to the European currencies. According to the main scenario, we expect the price to test the support at 0.6595. Then we expect it to break through the support and fall in the target range of 0.6514/32 or even lower, to the MACD line (0.6453). On the four-hour chart, the price has settled below 0.6700. The Marlin oscillator, seeing how the price failed to cross the MACD line, has moved into a descending trend area.     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328522

The Australian dollar has extended its gains on Wednesday. AUD/USD is trading at 0.6723 in Europe, up 0.54%. Australian inflation falls below 7% Australia inflation surprised on the downside with a 6.9% gain (YoY) in October. This was down sharply from the 7.3% clip in September and beat the consensus of 7.4%. The burning question on everyone’s lips, is, of course, “has inflation finally peaked?” Before the champagne bottles come out, it’s worth noting that a new method was used to calculate October CPI – under the old method, CPI would have been 7.1%, a less dramatic decline. Core CPI ticked lower to 5.3%, down from 5.4%. Australia recently added monthly inflation reports to supplement the quarterly releases, and the monthly reports are more volatile and may not mark a changing trend. Investors and policy makers will have to wait for the next quarterly CPI release in January to get a better handle on which direction inflation is headed. There was positive news from the construction sector, as Construction Work Done rebounded in Q3 with a strong gain of 2.2%, above the consensus of 1.5%. This follows a -3.8% read in Q2 and was the first gain since Q3 2021. The markets will be paying close attention to Jerome Powell, who is expected to touch upon inflation and the labour market in a speech later today. The Fed has orchestrated an effective Fedspeak blitz, with Fed members presenting a hawkish outlook for rate policy, even though the Fed has signalled it will ease up on rates in December and hike by “only” 50 basis points. This year will set a record for Fed tightening, with 425 basis points if the December increase is 50 bp. With the battle against inflation far from over, the last thing the Fed wants to temper any market exuberance, as a higher stock market could drive more inflation.   AUD/USD Technical AUD/USD continues to test resistance at 0.6707. The next resistance line is 0.6829 There is support at 0.6633 and 0.6511 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

Last night's speech by Jerome Powell, chairman of the US Federal Reserve, was one of the key events of the day. Investors were expecting clues about further changes in US interest rates, and they got them. Powell sounded more dovish. During his speech at the Brookings Institute, Jerome Powell signaled that the Fed may slow the pace of interest rate hikes in December, "the time for a moderate pace of rate hikes may come as early as the December meeting," - Powell said, while adding that it is likely "that restoring price stability will require maintaining policy at restrictive levels for some time." In addition, Powell added that historically premature policy easing has been strongly discouraged. "We will stay the course until the job is done," he said. - he concluded. Federal Reserve Chairman Jerome Powell also said that he "doesn't want to over-tighten" interest rates, as the central bank doesn't see fit to "crash the economy and clean up after it." Nevertheless, answering questions at a session organized by the Brookings Institute, Powell stressed that "cutting rates is not something I want to do anytime soon," the BBN service concludes. This was the Fed chairman's last public appearance before the December interest rate decision. Source: Conotoxia MT5, USDIndex, Daily Markets in a little euphoria The U.S. Nasdaq index hit its highest level in 10 weeks yesterday, the AUD/USD pair rate hit its highest level in 11 weeks, NZD/USD rose to levels seen 2.5 months ago, gold reached its highest level in 2 weeks, and the dollar index fell in November in percentage terms by the strongest amount since 2010. This reaction of the markets seems to show quite well how high investors' hopes were placed on Powell's speech, and that they were not disappointed. In addition to Powell's speech, events from China may also provide support for the markets. Investors may be pleased with China's softening stance on Covid. The top official in charge of tight restrictions on the Covid outbreak said the country's fight against the virus is entering a new phase amid a waning omicron variant, rising vaccination rates and broader experience in preventing Covid. Source: Conotoxia MT5, US100, H4 What's next ahead? After the Fed chairman's speech, it seems that the key for the markets may be Friday and data from the US labor market. It is in it that high hopes may be placed to resist the economic slowdown. However, if the labor market situation began to deteriorate as well, the Fed could face a difficult choice. Which to fight? With inflation or with the deterioration in US employment. That is what we will find out tomorrow. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

AUD/USD continues to power upwards and hit 10-week highs earlier today. The Australian dollar climbed 1.5% on Wednesday and has edged higher today. In the European session, AUD/USD is trading at 0.6796, up 0.14%. US dollar slides after Powell speech Fed Chair Jerome Powell spoke on Wednesday and gave the markets what they wanted to hear with regard to the December rate hike. Powell strongly hinted that the Fed would slow the pace of rate increases at the December 14th meeting, after four successive 75-bp hikes. Powell said that slowing down at this point “is a good way to balance the risks”, as the Fed Chair is trying to slow the economy while avoiding a recession. The markets duly responded by pricing in a 50-bp rate hike at 80%, up sharply from 65% prior to Powell’s remarks. This sent financial markets higher, while the US dollar was broadly lower. Investors focussed on Powell’s hint that rate hikes will slow at the next meeting, choosing to ignore his comments that rates could rise higher than previously expected and for a prolonged period in order to curb stubborn inflation. The likely easing to 50 bp was a green light for the markets, and what is down the road can be worried about another time. In Australia, Private Capital Expenditure disappointed in Q3 with a reading of -0.6%. This was below the Q2 reading of 0.0% and way off the consensus of 1.5%. The RBA meets on December 6th after having eased on rate hikes, with two straight increases of 25-bp. The cash rate is currently at 2.85%, and there is a good chance that the RBA will again raise rates by 25 bp next week, as it looks to fight inflation while guiding the economy to a soft landing.   AUD/USD Technical AUD/USD is testing resistance at 0.6829. Above, there is resistance at 0.6903 There is support at 0.6707 and 0.6633 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The Australian dollar rose above the 0.6799 level yesterday, the November 15 peak. Target levels have been changed. Now the price is building strength to advance to 0.6917, the September 13 peak. Oil gained 1.13% yesterday, gold gained 1.92% and the dollar index fell 1.25%, but the aussie added a modest 0.45%. Rumor has it that the Reserve Bank of Australia will only raise rates by 0.25% at their next meeting (December 6). All these incoming data suggest that the bullish correction which started back on October 13 is coming to an end. A divergence with a new, flatter angle is forming on the daily chart. To complete it, it will be convenient if the price reaches the nearest target level of 0.6917. But if the price settles below 0.6799, a double weak divergence will be formed, and it is almost done. On the 4-hour chart, the price divergence with the oscillator is almost ready. But with important U.S. jobs data coming out today, market participants will wait a bit with the early development of technical reversal signs. We wait for the data and progress. Target levels are marked on the charts. Relevance up to 04:00 2022-12-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328773

Summary:  Daily Dose of financial insights for investors and traders for the week ending, December 2. Why gold stocks hit their highest level since July, with the gold price jumping 2%. Why the energy crisis continues; Santos lost an appeal to start a gas project, and a coal company in Australia slashed its output target amid La Nina rains impacting production. What the next catalysts are for markets. WATCH this five minute video.       Markets rally, on inflation easing. ASX200 at a seven month high Aussie share market had it worst day in about four weeks, falling 0.7%on Friday. But despite that, as they say the long term trend is your friend; the ASX200 closed off the week at its highest level in 7 months. The market has gained about 13% from October. Over the week; the market held onto a gain of 0.6%; and the ASX200 is just 4% away from its record all time high. What’s supported markets you might ask? Well economic data this week showed inflation pressures are easing for now. Both in the US and Australia. This offers hope to mortgage holders, corporates and equity markets. Hope that the US central bank, the Fed, won’t need to be so aggressive with rate hikes in two weeks. And in Australia; there’s hope the RBA can potentially stop hiking rates later next year. So markets are forwarding looking, and this is what has been supporting equity markets for now. Big market moves; gold equites shine    Today was all about all that glittered. Gold. Gold stock ripped higher hitting their highest level since July; St Barbara rose 10% after an investment firm bought a major stake in the gold miner. Silver Lake rose 6%. with other gold miners following. It’s all because the gold price made its best weekly gain in four weeks, up 2% today and this week. Remember, gold, the safe haven metal, traditionally does well when times are tough. And overnight the US economic slowdown gained pace with constructions and manufacturing data slowing. The US manufacturing sector fell into a contraction for the first time in two years. So this supports the Fed not being so aggressive with rate hikes. That supports the US dollar potentially continuing to fall. And this supports gold moving up. Economic news in Australia gives the RBA more room to stay dovish  On the economic news front in Australia, Home loan data showed lending is continuing to fall and much more than expected. Home loans fell 2.7% in the month, following the 8.2% drop last month. We think home loan demand will continue to fall and that this will continue to pressure property prices into 2023. Company news Santos lost a court appeal to restart a $3.6 billion gas project, as Indigenous groups were not properly consulted on the plan. Also in energy news, coal producer Coronado cut its production target for the year, as rain from La Nina has prevented it from getting as much coal of the ground that it wanted to. The takeaway here, is that Australia will continue to grapple with a lack of physical energy supply. Which is why we think energy prices will continue to rise next year. The RBA is also of the same view.  What to look for in coming days In the US; the final monthly employment report will be released before the Fed’s next interest rates decision. So tonight what’s released is non-farm payrolls. The market is expecting 200,000 jobs were added to the US in November, which is 60,000 less than October. On December 4; The Organization of the Petroleum Exporting Countries (OPEC) and their allies meet. Although a policy change is seen as unlikely. In Australia next week; the RBA meets on Tuesday. A 0.25% hike is expected.  The Australia Dollar continues to rally  The AUDUSD trades up about 10% from its October low, supported by the fact that China's 3rd biggest city is easing restrictions.    For a weekly look at what to watch in markets - tune into our Spotlight.For a global look at markets – tune into our Podcast. Source: Daily Dose of financial insights for investors and traders December 2; Gold glitters on recession concerns, Energy crisis back on the agenda | Saxo Group (home.saxo)

It is likely that the AUDUSD pair will form a bearish triple zigzag Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ in the long term, where the primary wave Ⓩ is a simple zigzag (A)-(B)-(C). The intermediate wave (B) of this zigzag took the form of a simple bullish zigzag A-B-C. At the moment, an impulse wave (C) is being formed, which consists of minor sub-waves 1-2-3-4-5. Minor wave 3 consists of five sub-waves of the minute degree. Most likely, the development of the minor corrective wave 4 in the form of a minute double zigzag was completed not so long ago. Thus, the market may continue to move down in the impulse wave 5. The currency is expected to decline to the previous low of 0.617, marked by the impulse 3. However, corrective wave 4 may not have been fully completed. Bulls could build only two parts of correction 4, that is, we can see fully formed sub-waves ⓦ-ⓧ, and the sub-wave ⓨ is still being built, but is already close to its completion. In the near future, the market may grow to 0.689. At that level, the entire corrective wave 4 will be at 76.4% along the Fibonacci lines of previous bearish impulse 3. Then, after the full completion of wave 4, we can expect a decline in the minor wave 5.

Markets are looking out for today's US employment data as it could signal whether the Fed will finally end its cycle of aggressive interest rate hikes. Wednesday's ADP jobs report already came in well below expectations, while Jerome Powell's recent speech was less hawkish than expected. If upcoming news indicate a surge in lay-offs, sharp fall in employment and dip in new job gains, then this means that inflation is likely to ease soon, so the bank can confidently start to reduce the rate increases. This is also what Powell said when he indicated that Fed rates may increase by 0.50%, not 0.75%, in December. In short, below-forecast labor market figures could encourage the Fed to shift to a softer stance, which will be positive for markets. It could lead to a new rally in equities, especially in the US. As for Treasury yields, they will go down along with dollar. Forecasts for today: AUD/USD The pair is trading below 0.6830. If positive sentiment increases, the quote could break out of the resistance level and head towards 0.6900. USD/CAD A renewed rally in crude oil prices could put pressure on the pair. A drop below 1.3400 will bring it down to 1.3300. Relevance up to 06:00 2022-12-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328785

The focus of today's trading day will be on the release (at 13:30 GMT) of the US Department of Labor's November data report. And we see trader activity and market volatility gradually decreasing after the dollar set another anti-record during today's Asian trading session as the dollar index (DXY) fell to a new 22-week low at 104.33. Meanwhile, the AUD/USD pair is rising again today. As of writing, it was trading near 0.6816, testing the 0.6840 key resistance level (200 EMA on the daily chart) for the second day in a row. If further market events continue to develop negatively for USD, after the breakdown of the resistance level, AUD/USD will go to the key long-term resistance level 0.6900 (50 EMA on the weekly chart). Its breakdown will increase the probability of further growth of AUD/USD towards the key resistance levels 0.7100, 0.7170 (200 EMA on the weekly chart), which separates the long-term bearish trend of the pair from the bullish one. So far, despite the growth of the pair, which can be described as corrective, there is still a long-term bearish trend. In view of this, short positions remain preferable below the resistance levels 0.6840, 0.6900. The first signal for the resumption of short positions will be a breakdown of support levels 0.6760 (144 EMA on the daily chart), 0.6733 (200 EMA on the 1-hour chart). A breakdown of the 0.6620 support level will confirm our main forecast, which is negative for the pair, and will also mean a revival of the downward dynamics with AUD/USD returning inside the downward channel on the weekly chart. Read next: Building permits do not matter at all. As for durable goods orders, even though some significant upward or downward changes are recorded, the effect will be minimal| FXMAG.COM Alternatively, AUD/USD will break into the zone above the resistance levels 0.6840, 0.6900. But, most likely, in this zone, AUD/USD is waiting for a rebound and further movement according to our main (negative for AUD/USD) scenario. Support levels: 0.6760, 0.6733, 0.6700, 0.6620, 0.6600, 0.6500, 0.6455, 0.6390, 0.6285, 0.6200, 0.6170, 0.5975, 0.5665, 0.5510 Resistance levels: 0.6840, 0.6900 Trading Tips Sell Stop 0.6785. Stop-Loss 0.6855. Take-Profit 0.6760, 0.6733, 0.6700, 0.6620, 0.6600, 0.6500, 0.6455, 0.6390, 0.6285, 0.6200, 0.6170, 0.5975, 0.5665, 0.5510 Buy Stop 0.6855. Stop-Loss 0.6785. Take-Profit 0.6900, 0.7037, 0.7100, 0.7170 Relevance up to 12:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328833

The Australian dollar’s has posted small gains today and is trading at 0.6816. After starting the week with sharp losses, AUD/USD has rebounded and hit a 13-week high on Thursday, at 0.6845. All eyes on US nonfarm payrolls Today’s highlight is the US nonfarm employment report, with a consensus of 200,000 for November. This follows a 261,000 gain in October. The US employment market has been surprisingly resilient, considering the sharp rise in interest rates. The employment market has recently started to cool off, but unless today’s NFP release significantly underperforms, it won’t change the Fed’s view that it is still too early to tell if inflation is on its way down. Jerome Powell’s speech on Wednesday sent the US dollar sharply lower, as Powell’s comments were not as hawkish as feared. Powell said that more evidence was needed to show that inflation was falling, and reiterated that rates would likely rise higher than the Fed has projected in September. Still, investors chose to focus on Powell’s broad hint that the Fed would ease the pace of rates next week with a 50-bp move, after four straight hikes of 75 bp. Reserve Bank of Australia Governor Lowe issued a shocking apology about rate policy earlier in the week. Lowe said that it was regrettable that people listened to the RBA saying it wouldn’t raise rates before 2024. but then delivered seven oversized rate hikes in 2022. Many Australians took out mortgages based on the RBA assurance but are now getting squeezed by huge mortgage payments. The RBA meets next Tuesday and is widely expected to raise rates by 25-bp, which would bring the cash rate to 3.10%. Read next: If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya| FXMAG.COM AUD/USD Technical AUD/USD testing resistance at 0.6829 earlier today. Above, there is resistance at 0.6903 There is support at 0.6707 and 0.6633 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

Summary:  Today's financial insights for investors & traders:- Economic reopening plays, iron ore, copper and oil rally on China easing restrictions. Coal trades back at record highs and stocks exposed to China rip higher. Fortescue Metals shares are back in record high territory. Here are the Saxo equity baskets and stocks to watch, plus what's ahead this week, in this six minute video. Economic reopening plays and commodities will be in focus this week with China easing some COVID restrictions On Monday, Shanghai and Hangzhou scrapped PCR testing to enter public venues including on public transport and to enter parks. Shanghai and Hangzhou joined other top-tier cities, Beijing, Shenzhen and Guangzhou in relaxing curbs after mass protests took place against China’s stringent policies last week.In equites, which are forward looking – focus will be on stocks exposed to a potential turnaround in consumption, especially in cities with easing restrictions. Reflecting on Saxo's equity baskets, the best returns in markets on Friday, over the week, and month, have been in in Saxo’s China Consumer and Technology basket.  In Saxo basket you see stocks like Nio, Alibaba are up 40% on the month, Tencent is up 24%, while consumer spending giant JD.com is up 50%. Recall that Hangzhou is home of Alibaba so its rally continue with restrictions easing there from today.Meanwhile Commodities will also be a focus will be on oil with its trading back above US$81, and posting its biggest weekly gain on hopes that demand will increase from China. OPEC+ met at the weekend they committed to their targets for the rest of 2032. We think oil volatility will likely pick up this week with Venezuela’s top refinery halting gas output after a malfunction while further cities in China may also ease some restrictions. Australia’s share market, home of some of the commodity kings, hit a new high on China easing restrictions The benchmark index, the ASX200 (ASXSP200.1) hit a new seven month high on Monday and momentum could continue with China’s easing some restrictions today. The iron ore (SCOA) price rose 2.3% move the steel ingredients’ price back over back above $100 for the first time since August, on hope China could increase demand. The iron ore price is up 38% from its October low. This is benefiting benefit forward earnings of BHP, Rio, Fortescue and Champion Iron with all their shares trading higher today, with those most exposed to China seeing the biggest rallies. Fortescue shares are up 8% taking the miner back to record highs. To get more inspiration on stocks exposed to China in commodities, use Saxo’s Australian Resources basket Foreign Exchange traders will be busy this week; RBA meets, before the Fed next week The US dollar is higher against most G-10 pairs, with the New Zealand dollar leading risk currencies lower. Why? The market is focused on the Fed’s meeting next week after hotter than expected US jobs report. Still, the US dollar, against most currencies (as measured by the (DXY) is near a five-month low after losing 8.4% from its high; with US inflation cooling and investors betting the Fed will only hike rates by 50 basis points (0.5%) at their December meeting next. Currencies to watch include the AUDUSD, as the RBA meets on Tuesday December 6. The RBA is expected to make its 3rd consecutive quarter-point (0.25%) hike in the cash rate, which will take the cash rate from 2.85% to 3.1%. AUDUSD is up ~10% from its October low on forwarding thinking that commodity demand from China will increase as some major cities have started to ease restrictions.   For a weekly look at what to watch in markets - tune into our Spotlight.For a global look at markets – tune into our Podcast. Source: Financial insights for investors & traders: Economic reopening plays, iron ore, oil rally on China easing restrictions. What's ahead | Saxo Group (home.saxo)    

A potential move to 0.6915 remains on the cards once AUD/USD clears 0.6850, suggest Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group. Key Quotes 24-hour view: “We expected AUD to ‘trade between 0.6765 and 0.6845’ last Friday. AUD subsequently dropped to 0.6743 before rebounding quickly. We view the price movements as part of a consolidation and expect AUD to trade within a range of 0.6760/0.6850 today.” Next 1-3 weeks: “There is not much to add to our update from last Friday (02 Dec, spot at 0.6800). As highlighted, while further AUD strength is not ruled out, it has to break clearly above 0.6850 before an advance to 0.6915 is likely. The likelihood of a clear break of 0.6850 would remain intact as long as AUD does not move below 0.6730 (no change in ‘strong support’ level from last Friday).”

Both the Chinese Renminbi as well as the Pacific G10 currencies (AUD and NZD) are benefitting quite clearly from the fact that several cities in China decided to ease coronavirus curbs. Nonetheless, excessive AUD and NZD are not justified, according to economists at Commerzbank. China’s leadership is reacting “Corona measures are being eased more quickly than one might have assumed even last week. In particular as the introduction of these measures had initially caused CNY, AUD and NZD weakness the FX market had potential for a correction. I completely agree with that, in particular as I was critical about the initial market reaction. At the same time, I caution against throwing out the baby with the bath water.” “I know that everyone blamed the corona lockdowns (and fears of them) for weak growth in China. However, even if we see a reversal in China’s lockdown policy that does not mean that everything will be happiness ever after. That means that excessive AUD and NZD strength is not justified.”

The Reserve Bank of Australia will hold its last meeting of the year on Tuesday, December 6. It is by no means a passing meeting, so the AUD/USD pair may experience increased volatility. The previous signals are contradictory, so a certain intrigue regarding the results of the December meeting remains. However, in anticipation of this event the market has already formed its position with regard to the base case scenario. Thus, according to the opinion of the majority of experts polled by Reuters, the RBA this month will increase the rate by 25 points—the same as at the previous two meetings. There is a consensus on this issue, while further prospects for tightening monetary policy already look vague. At the very least, analysts' opinions regarding the pace of the rate hike after the December meeting differ. For example, 12 of 30 economists surveyed said that in the first quarter of next year, the RBA will increase the rate by a total of 50 points, 11 predicted a 25-point hike, while six analysts do not expect any steps in this direction from the RBA. In general, at the end of the first half of 2023, many of the experts surveyed (15 of 29) see an interest rate level of 3.60% "or higher," while 14 analysts said the rate would be below 3.6%. At the same time, some of them admit the option of the RBA taking a wait-and-see approach after the December meeting, which means that the rate will peak at 3.10%. Note that the Reserve Bank of Australia is gently and gradually leading traders to the fact that the regulator may indeed take a pause in rate hikes for the foreseeable future. In particular, the minutes of the latest RBA meeting indicate that members of the regulator simultaneously do not rule out two scenarios: they can either return to a 50-point rate hike, or suspend the process of tightening monetary policy. Judging by the opinion of the absolute majority of experts, the market is highly skeptical that the RBA can return to the aggressive pace of rate hikes. Market participants are more likely to be ready for an alternative option, according to which the RBA will take a break after the December or February meeting (when the Central Bank would have Q4 2022 data on inflation growth in Australia). RBA Governor Philip Lowe and his subordinates are also gradually preparing the markets for the implementation of a conditionally "dovish" scenario. In particular, Deputy Governor Michelle Bullock said back in November in the Senate of the Australian parliament that the regulator is approaching the moment when it will be possible to pause and look around. In turn, the head of the central bank, speaking last Friday at the Bank of Thailand's economic conference in Bangkok, said that inflation expectations in Australia remain under control, and the RBA's decision to slow the rate increase reflects the lagging effects of monetary policy. At the same time, he added that the Australian regulator seeks to slow down inflation "without having too much negative impact on the economy." The latter thesis, in one form or another, was repeatedly voiced by Lowe and his colleagues. And recently, this message is sounding more and more often, and so to speak, "louder" (accents are set accordingly). At the same time, each Australian macroeconomic release is considered by the market through the prism of these signals. For instance, last week, AUD/USD traders reacted rather strongly (more aggressively than usual) to a disappointing retail sales report which otherwise would have been ignored by the market. Consumer Spending in Australia was unexpectedly in the red, showing a contraction of 0.2% (instead of the forecasted 0.5% growth). Of course, the release itself reflects negative trends, but in this case, the published report was taken by the market as another argument in favor of a possible pause in the process of tightening monetary policy. Thus, the outcome of the December meeting of the RBA may turn out soft. The 25-point interest rate hike is already fully factored into current prices—this decision is likely to be ignored by the market. The market's attention will be focused on the rhetoric of the accompanying statement and on Philip Lowe's statements. If the RBA leadership "outright" allows a pause for a rate hike in early 2023, the Aussie will be under pressure, despite all prior hints about it. Judging by the results of the above-mentioned Reuters poll, most experts are still confident that the RBA will raise rates in the first half of 2023, even at a slow pace. Given such uncertainty, it is most reasonable to take a wait-and-see attitude for the AUD/USD pair until the RBA's verdict is pronounced. Relevance up to 07:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328938

The situation of currency pairs is affected by macroeconomic and political events. In the Asian market, developments in China, which has recently been struggling with an increase in coronavirus infections, are of particular importance. December is particularly important because the last decisions regarding interest rates will be made this year, which will affect the forex market.   Decreased winter fears may support the euro. The looming recession in the UK is starting to take its toll on the pound. The Aussie awaiting RBA decision Positive Japan services PMI   EUR/USD The EUR/USD pair is at its highest level in months. The upward trend in recent weeks has been strong. ING FX experts remain bearish on the euro/dollar exchange rate until the end of the year, but there are experts who believe that the exchange rate will continue its upward move. It is worth paying attention to the readings of PMI indices for services that will be released today from many countries and the already mentioned ISM data from the US. Today's readings for the EU were weaker than expected, but it seems that the market is waiting for the release of the US report. The news related to energy issues in the euro zone may be loud this week. The price cap of the G7 is $60. per barrel, and Urals oil is traded at $10. below this ceiling. Moscow has already announced that it prefers to limit production rather than sell at a fixed price. However, the reduction of fears related to a possible frosty winter may support the euro exchange rate.   Read next: If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya| FXMAG.COM   GBP/USD The pound/dollar exchange rate increased its gains in November. The recent rebound in the pound/dollar (GBP/USD) has regained momentum, but Monday morning brings some break to the rally. The final service PMI reading for November published today was in line with expectations (48.8). More and more serious opinions announcing a more significant and prolonged recession in the British economy may start to show up in the pound's quotations. Especially that the market will also price in scenarios regarding the decision of the Bank of England on the level of interest rates. The Bank of England will decide next week's rate on Thursday (December 15), the same day as the ECB and a day later than the Federal Reserve (December 14).   AUD/USD AUD/USD refreshed to a seven-week high above 0.6850. Now turned down, sentiment remains bearish. The AUD/USD exchange rate is susceptible to the economic situation in the US and Australia. The situation in China is of great importance for the strength of the Australian dollar. Announcement of easing covid restrictions in China may support the situation of the Australian dollar. Markets are expecting the Reserve Bank of Australia to keep the cash rate on hold at 2.85% after inflation slowed sharply in October. The RBA will be deciding on rates tomorrow. The market is pretty much 50/50 on a 25 bp bump up.   Read next: Chinese And European Services PMIs Fell| FXMAG.COM   USD/JPY USD/JPY bearish movement developed and the currency pair is moving to its lowest level since August. The USD/JPY pair is very liquid as both currencies are among the top reserve currencies in the world. As with other major currency pairs, USD/JPY can also be sensitive to macroeconomic data from the US and Japan. Today's reading for PMI services in Japan was optimistic.   Source: finance.yahoo.com, investing.com,

By the end of Monday the dollar index gained 0.78%, oil prices fell by 3.66% and the Australian dollar fell by 1.37%. The price overcame the support at 0.6730 and now it is trying to increase in today's Asian session, but without losing the opportunity to settle below the level. The price can reach the target support at 0.6642, in case it overcomes yesterday's low at 0.6688, in which case the signal line of the Marlin oscillator will break through the zero line and move into the territory of the downtrend. Divergence continues to exert its effect on the price. On the four-hour chart, the price settled under the MACD line and under the level of 0.6730. Also, the Marlin oscillator settled in the negative territory. By cumulative circumstances of both charts, the bears have advantages. We wait for things to progress and AUD to reach the target support at 0.6642. Relevance up to 03:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329030

The Reserve Bank of Australia hiked by another 25bp and we expect 50bp of further tightening in 2023 to reach a 3.60% peak rate. Implications for AUD are limited, however, and we see downside risks as Chinese sentiment falters. Markets are back to pricing in a 5.00% peak Fed rate, which is helping the USD recover. EUR/USD may stabilise before another leg lower The Reserve Bank of Australia has raised the official cash rate to 3.1% USD: Recovery mode The risk-on wave generated by easing Covid restrictions in China did not extend beyond Asian stock markets yesterday, and risk assets were mostly weaker after a surprise rise in US ISM service cast doubts on dovish Fed bets, and Fed Funds futures are once again pricing in a 5.00% peak rate in 2023. Risk sentiment has remained fragile this morning. The dollar has recovered some ground, mostly against the Japanese yen (which is the most sensitive to the Fed factor) and some high-beta currencies. We think USD/JPY could climb back above 140.00 in the run-up to the Federal Open Market Committee (FOMC) meeting next week, as markets take stock of strong jobs data and weigh a more hawkish outcome than previously expected. Elsewhere, USD/CNY is climbing back to the key 7.00 level, and we expect a break higher sooner than later. We discussed yesterday how the dollar had fallen back to a neutral position versus G10 currencies. This means that a further drop in the dollar will need to see investors make a conviction call on an extended dollar bear trend as the room for long-squeezing has now shrunk significantly. We think such a call would be premature and expect a dollar recovery into year-end. Today, the US calendar is very light (only the trade balance for October to highlight) and there are no Fed speakers due to the pre-FOMC blackout period. We could see reduced FX volatility today, and the dollar may cement recent gains.   Francesco Pesole EUR: Downside risks prevail EUR/USD has not moved dramatically compared to other G10 crosses despite the dollar rebound. The pair could hover around 1.0450/1.0500 today, but is mostly facing downside risks in our view. The freshly imposed EU embargo on Russian seaborne crude and the $60 per barrel price cap may start to show their effects on the energy market soon. When adding an expected drop in temperatures in Europe from this week, the risks of a new rally in energy prices are non-negligible, and the euro is highly exposed to such risks. There are no major data releases to flag in the eurozone today and no scheduled ECB speakers. Francesco Pesole Read next: Vodafone Shares Fell By 45%, Apple May Be Moving Production Outside Of China | FXMAG.COM AUD: Another 25bp hike by the RBA The Reserve Bank of Australia (RBA) hiked rates by another 25bp to 3.10% this morning. Since the RBA has policy meetings approximately every month, it can continue to hold a very straightforward meeting-by-meeting, data-dependent approach, and there was unsurprisingly very little forward guidance in today’s statement except for the vague reference to more tightening ahead.   We currently forecast the RBA peak rate at 3.60%, and a 25bp rate hike at the next meeting (7 February). Tomorrow morning, Australian GDP figures for the third quarter will be released and should show strong growth (consensus 6.3% year-on-year). However, jobs and CPI releases later this month and in January will be more important for the RBA. AUD/USD reaction to the RBA hike was positive but quite contained, and the pair remains strictly tied to global risk dynamics and especially market sentiment on China. It does appear that optimism related to easier Covid restrictions in China is quickly evaporating, and AUD may soon end at the bottom of the G10 scorecard. We target 0.66 for both year-end and the first quarter of 2023. Francesco Pesole CEE: Another delay in EU-Hungary story The EU-Hungary story changes every day. The agenda for today's Ecofin meeting was changed at the last minute and it seems that today there will only be a discussion on the subject but no vote. This confirms earlier speculation that the lack of time between the publication of the European Commission's recommendations and today's Ecofin meeting would require an extraordinary meeting later. Last week the EC recommended to the EU Council to suspend 65% of the EU funds on three operating programmes for 2021-27 for Hungary, amounting to €7.5bn. Regarding the recovery funds, the EC approved Hungary's recovery plan but said that actual disbursement of the funds will take place only after Hungary met 27 "super milestones" by the end of the first quarter of next year. So what is the schedule for the coming days? We are likely to hear new headlines today that will give us guidance on what to expect next Monday, when an additional Ecofin meeting is due to take place, and on Thursday and Friday next week, when the last European Council meeting for this year is scheduled, which should be the final deadline of this story. On the FX side, in the CEE region, the weaker euro against the US dollar was probably the main reason behind the weakness, but still, the Hungarian forint led yesterday's losses. Presumably, another investor lost patience given another delay of a decision in this story. However, the turnaround in sentiment in global markets does not imply a favourable week for the region. Only retail sales in Romania and the Czech Republic are on the calendar today, but the focus will once again be on the Hungarian forint and the Polish zloty. Frantisek Taborsky Read this article on THINK TagsReserve Bank of Australia Dollar CEE Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The Bank of Australia seems to be a fairly conservative central bank, which does not surprise with big interest rate hikes, but raises them systematically. This time was no different at the last meeting of the year. The Reserve Bank of Australia raised the interest rate by 25 basis points to 3.1% at its last meeting in 2022, matching market forecasts. The move marked the eighth consecutive rate hike, raising borrowing costs to levels not seen since November 2012, with the central bank announcing further increases as inflation in Australia is too high, tradingeconomics reports. The widely expected decision means the central bank has raised interest rates since May to 3 percentage points, the sharpest annual tightening of monetary policy since 1989. The committee reiterated that the interest rate is not a predetermined rate, as the size and timing of future increases will continue to be determined by incoming data. The council added that inflation in Australia will peak at around 8% this year, before weakening in 2023 and reaching just above 3% in 2024. Policymakers have reaffirmed their commitment to bringing inflation to target and will do whatever is necessary to achieve this. Source: Conotoxia MT5, AUDUSD, Daily Australian dollar exchange rate after the decision From mid-October to today, the AUD has strengthened against the USD by almost 9%. Today, after the decision, the AUDUSD exchange rate rose to 0.6723, which may represent an increase of 0.4% since the beginning of the day. Thus, higher and higher peaks and higher and higher lows could be observed on the chart of the described currency pair, which may be characteristic of a potential uptrend. From the point of view of technical analysis, only overcoming the vicinity of 0.6640 could lead to the formation of a new low within the recent upward structure. Interest rate hikes the cause of recession? Fitch thinks so As reported by BBN, Fitch Ratings once again lowered its global economic growth forecast for next year, citing the intensification of interest rate hikes by central banks, as well as the worsening trend in China's real estate market. Fitch lowered its growth forecast by 0.3 percentage points to 1.4% for 2023, while seeing the U.S. economy with slight GDP growth. Chinese growth, on the other hand, is expected to rise 2.8% this year and 4.1% in 2023. The eurozone economy is also expected to grow slightly, thanks to the easing of the energy crisis. The rating agency also said that central banks in the US and Europe will continue to raise interest rates above initial estimates. At the same time, a recession could be expected in the Eurozone and the UK this year, and in the US in the second half of 2023, the agency added. Source: Conotoxia MT5, US500, Weekly Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

The Australian dollar is in positive territory on Tuesday, after sustaining losses of 1.4% a day earlier. In European trade, AUD/USD is trading at 0.6721, up 0.35%. RBA raises cash rate by 25 bp The Reserve Bank of Australia lifted interest rates by 25 basis points, bringing the cash rate to 3.1%. This is the highest the cash rate has been since 2012, and there was some speculation that the RBA might take a pause from raising rates. One can also make the argument that with the next rate meeting not until February 7th, there will anyway be a “default pause” in January. As the move was widely expected, the Australian dollar has had a muted reaction to the move. There wasn’t much for investors to glean from Philip Lowe’s rate statement, which was almost identical to the November statement. Lowe noted that the RBA expects to increase rates, but “is not on a pre-set course” and rate decisions would be data-dependent. This last point may seem obvious, but events such as consumer spending, employment and inflation will be key drivers which determine rate policy in the early part of 2023. There is a great deal of uncertainty as to the terminal rate, which forecasts ranging from 3.3% all the way to 3.8%. What is clear is that the RBA is likely to resume its rate hikes in February, barring a remarkable decline in inflation. The markets will have to quickly shift attention from the RBA to GDP, which will be released on Wednesday. GDP for Q3 is expected to slow to 0.7%, down from 0.9%. A reading that is wide of the mark could result in some volatility from AUD/USD.   AUD/USD Technical AUD/USD faces resistance at 0.6760 and 0.6878 There is support at 0.6676 and 0.6558 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The financial markets are already starting to slow down, and currently I have no major events on my calendar that could affect the movement of currency pairs. For now, the currency pairs are waiting for next week, where, among others, the Fed and the ECB will decide on interest rates. The EUR/USD, recorded a correction this morning. The British pound had exactly the same background as the euro. The RBA raised the spot rate by 25 basis points to a 10-year high. The yen did not get support from the Governor of the Bank of Japan Kuroda   EUR/USD - The overall picture of pray remains positive The EUR/USD exchange rate strengthened yesterday, recorded a correction this morning. Currently, the pair is trading around 1.0500. The overall picture of pray remains positive. Now the question for EUR/USD as the correction started yesterday is whether this is just a respite or is there a broader correction to be feared. Retail sales in Europe continue to fall. It came down to -2.7% in October, which is far worse than the expected. US Services PMI, Industry Orders and ISM Services PMI exceeded expectations. These reports added support to the US Dollar but contributed to the decline of the Euro/Dollar pair. The macroeconomic calendar is completely empty today, so market players have nothing to watch.     GBP/USD started a correction The GBP/USD pair also fell. It is currently trading around 1.2200. On Monday, the GBP/USD currency pair also started a correction. The British pound had exactly the same background as the euro, except for the retail sales report, which was only for the European Union. In addition, the neutral index of business activity was also published in the UK. There won't be many significant events in either the UK or the US this week. Yesterday, the US ISM services sector published a quite important business activity index, which led to the strengthening of the dollar. Therefore, the correction is justified.   AUD/USD Pair gets a lot of support Currently, the appreciation of AUD/USD is slightly decreasing. The US dollar continued its rebound on Tuesday morning against its main competitors in the foreign exchange market, but not against the Australian Dollar, which was supported by the RBA decision. The Reserve Bank of Australia raised rates for the eighth time as part of the current monetary policy tightening cycle, with an accompanying statement that was slightly less dovish than market participants expected. The Reserve Bank of Australia matched market forecasts by announcing a 25 basis point rate hike to 3.10%. The currency pair is not only supported by events in its economy but also by events in China. Australia and China cooperate economically, therefore its influence is visible and justified. So reports China will soon reduce its strict Zero-COVID policy seemed to support market optimism as well as AUD/USD bulls.   USD/JPY USD/JPY continued its gains in the Asian session, followed by a slight correction. Yesterday, the dollar posted its biggest daily gain against the yen since June. Bank of Japan Governor Kuroda didn't help the yen overnight with dovish comments about aiming for a sustained and stable 2% inflation target. Sources: dailyfx.com, investing.com

AUD/USD picks up bids to print the first daily positive in four. Downbeat China trade numbers, softer-than-expected Aussie GDP fail to convince bears amid pre-Fed blackout. Beijing announces new COVID-19 prevention and control guidelines. Light calendar emphasizes risk catalysts for fresh impulse. AUD/USD prints mild gains around 0.6700 as buyers struggle to defend the first daily gains in four heading into Wednesday’s European session. The Aussie pair’s latest gains could be linked to the recently released Covid guidelines from China. That said, China’s National Health Commission (NHC) mentioned that asymptomatic patients, cases with mild symptoms can undergo home quarantine. The updates also mentioned, “High-risk zones with no new infections for 5 straight days should be released from lockdown in a timely manner.” On the contrary, fears of global recession, as conveyed by the key representatives of major banks and Bloomberg economics seem to challenge the AUD/USD bulls. Additionally, softer-than-expected Australia Gross Domestic Product (GDP) for the third quarter (Q3) and downbeat prints of China’s November monthly trade data also weighed on the AUD/USD prices. However, hopes of overcoming China-linked virus fears and faster economic transition, due to the NHC guidelines, seem to have triggered the latest risk-on mood, which in turn favors AUD/USD bulls. Amid these plays, the S&P 500 Futures print mild gains while the US 10-year Treasury yields print mild gains near 3.55%. Moving on, China’s risk-positive announcements and second-tier data may entertain AUD/USD traders ahead of Thursday’s China inflation numbers and Friday’s preliminary readings of the US Michigan Consumer Sentiment Index. Technical analysis Tuesday’s Doji candlestick above the 21-DMA, around 0.6700 by the press time, keeps AUD/USD buyers hopeful.

EURUSD hits resistance The US dollar edges higher as dovish incentives for the Fed fade amid robust data. The pair came under pressure at 1.0600 which is a supply zone from last June’s sell-off. The directional bias remains up in the short-term and the bulls may see a pullback as an opportunity to stake in. 1.0440 near the previous top is the first support. Further down, the previous daily lows of 1.0300 and 1.0220 on the 30-day moving average might counteract a deeper correction. A close back above 1.0600 could lift the euro towards 1.0800. AUDUSD struggles for support The Australian dollar softened after the RBA lifted its cash rate by 25bp as expected. On the daily chart, the pair has been grinding up along the 20-day moving average. September’s high of 0.6900 may prove to be a tough level to crack. A bearish RSI divergence indicates a slowdown in the upward momentum. An initial break below 0.6800 triggered the first round of profit-taking, turning it into a fresh resistance. 0.6670 is the immediate level to gauge follow-up interests and its breach would send the aussie to 0.6580. Read next: Nigeria Bans Cash Withdrawal Higher Than 225$ To Encourage CBDC Use | FXMAG.COM UK 100 consolidates gains The FTSE 100 falters as traders ponder the Fed’s potential stance next week. The bulls are testing the major supply zone from this year’s highs around 7630 where strong downward pressure could be expected. As the daily RSI shot into the overbought area, a combination of profit-taking and fresh selling could weigh on the short-term price action. 7510 is the first support then 7440 next to the moving averages is an important area of confluence. A rally above the psychological level of 7600 could extend gains above 7700.

The darkening economic outlook drove fresh safe-haven demand for the US Dollar on Wednesday. The US dollar changed little after some of America's biggest banks warned of an impending recession The Fed, Bank of England (BoE) and European Central Bank (ECB) will set interest rates next week and central bankers will enter a period of silence before meetings. Positive reports appeared in the euro zone. Policymakers enter a period of calm ahead of key meetings of the Bank of England, the Federal Reserve and the European Central Bank Australian Dollar is facing renewed pressure. BoJ board member Nakamura once again encouraged the JPY bears Read next: Euro: Is There A Broader Correction To Be Feared? Aussie Got Little Support From The RBA Decision | FXMAG.COM EUR/USD may be bearish? The EUR/USD pair trades close to 1,050. Any breakout lower than 1.045 will be considered bearish. Economists at ING note that the pair could move lower to 1.0400. The European currency is expected to closely follow the dynamics of the dollar, the impact of the energy crisis on the region and the divergence between the Fed and the ECB. Additionally, the markets' overestimation of the potential Fed policy reversal remains the sole driver of the pair's price action for now. There were further concerns about the impact of colder winter conditions, especially in the context of the still uncertain energy situation. Positive reports appeared in the euro zone. Employment rose slightly and the GDP Y/Y and GDP Q/Q readings turned out to be higher than expected. GDP Y/Y increased to 2.3% against the expected 2.1%, while GDP Q/Q increased by 0.1% to 0.3%. Speeches by members of the European Central Bank will also take place today, but they are not expected to have a significant impact on the euro exchange rate. GBP/USD holds gains above 1.2150 The GBP/USD pair is trading around 1.2190. The pound strengthened against the dollar on Wednesday to a nearly six-month high as policymakers enter a period of calm ahead of key meetings between the Bank of England, the Federal Reserve and the European Central Bank. There are no significant macroeconomic events for the pound today. The Bank of England raised interest rates from 0.1% to 3.0% in the current monetary policy tightening cycle, with markets pricing in an interest rate peak of around 4.6% next year. Economists predict the Bank of England will decide to raise interest rates by 50 basis points next Thursday. One BoE policymaker said higher interest rates could lead to a deeper and longer recession. Yesterday, the Reserve Bank of Australia recently raised its key interest rate by 25 basis points to 3.1% The Australian dollar failed to hold its gains and it is facing renewed pressure after data showed that the Australian economy expanded less than expected in the third quarter. Annual GDP by the end of July was 5.9% instead of the expected 6.3% and the previous reading of 3.6% was revised down to 3.2%. Overall, national data show a strong economy. Yesterday, the Reserve Bank of Australia recently raised its key interest rate by 25 basis points to 3.1%, taking borrowing costs to a level not seen in a decade, and further tightening is expected to bring down inflation. A board member of the Bank of Japan (BoJ) said that adjusting monetary policy would be premature The currency pair is trading around 137.3590. BoJ board member Nakamura once again encouraged the JPY bears with his statement. A board member of the Bank of Japan (BoJ) said that adjusting monetary policy would be premature. Source: dailyfx.com, investing.com, finance.yahoo.com

The Australian dollar gained 0.58% yesterday. The price reached the resistance at 0.6730 and in today's Asian session it is moving down from it. The Marlin oscillator is already moving into the negative territory on the daily chart, the development of this intrusion will lead the price to the target support at 0.6642. Breaking yesterday's high at 0.6743 will allow the price to continue rising to the target resistance at 0.6799 (November 15 high). On the four-hour chart, the price settled under both indicator lines, below the level of 0.6730. The Marlin oscillator is developing in the downtrend area. We expect the price at 0.6642 (November 29 low).   Relevance up to 03:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329247

Summary:  Risk picked up in markets with Putin warning the threat of nuclear war is rising, yet he stopped short of pledging not to use atomic weapons. Traders are also unnerved by growing recessionary fears; and next week’s US CPI read ahead of the Fed's interest rate hike. Campbell Soup boils up on stronger than expected earnings, gold and gold stocks bound higher as they typically do amid recessionary concerns. Gold stock Evolution Mining appears in an uptrend. Watch our six minute video.       What you need to know now about markets Risk picked up in markets with Putin warning the threat of nuclear war is rising, yet he stopped short of pledging not to use atomic weapons. Traders are also unnerved by growing recessionary fears; and next week’s US CPI read. Will it show CPI fell to 7.3% down from 7.7% YoY? And will the Fed hike by 0.5% on December 15 instead of 0.75%? Uncertainty pushed up bond yields, and pressured equities lower with the S&P500 falling for the fifth day. Oil fell for fourth day to $72,01 erasing all of 2022s gains. Focus is on uranium stocks and the URA ETF, as well as metals with iron ore, copper, and gold higher. Agriculture commodities and equities are back in the limelight, with Putin’s threats pushing wheat prices up 3.1%. The major indices, the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) skid again. Campbell Soup boils up S&P500 fell for the fifth session falling below its 100 day moving average again, but managing to close above it as a sign that sell pressure could be easing, as markets await Friday’s producer inflation. Nevertheless, the S&P500 has now lost about 3.6% over five days of selling with the next level of support at perhaps around 3900 still insight. The Nasdaq 100 fell 0.5% on Wednesday, taking its four-day lost to almost 4.6%. Outperforming stocks on watch - Campbell Soup and wheat giant General Mills Generally, there are always outperformers in markets, even when times are tough. A hot scoop for you is that that Campbell Soup shares popped 6% higher on Wednesday, gapping up to $56.18 after the company reported stronger quarterly earnings than expected. Its shares are now 15% off their record high that it hit in 2016. That year, the Syrian war escalated, Trump was elected, and there was a string of terror attacks around the world. And amid war talks now escalating this year Campbell Soup shares entered an uptrend, gaining 45% from last November. If recessionary talks and Russia war concerns linger, you might expect this company to continue to benefit. It has free cash flow, and consistent rising profit growth. Another stock that did well overnight was General Mills, rising 2% to an all-time high, $87.50 after the wheat price jumped 3% overnight on supply concerns returning. We mentioned General Mills as a company to watch in our Five Stocks to Watch video. Despite the wheat price falling 19% from September after supply returned to the market, General Mills has been able to grow its quarterly profit and free cash flows. Gold stocks charge, Australia’s share market holds six month highs   The Australian benchmark index, the ASX200 (ASXSP200.1) opened 0.3% on Thursday, but holds six month high territory. As for the best performers in the ASX200, clean metal small cap miner Chalice (CHN) rose 12% after drilling confirmed it found new sulphide minerals in Western Australia. CHN would typically be classed as higher risk company as its doesn’t earn income, which is why its share are suffering while interest rates are rising. CHN shares are down 35% YTD. Gold stocks are looking interesting as recessionary calls get louder- gold generally outperforms in a recession. Evolution Mining (EVN) shares are up 5%, continuing to rally it in uptrend and have gained 61%, moving EVN shares up off their 5-year low. In the larger end of town, BHP shares broke higher but profit taking turned its break higher into loss. BHP shares are up 26% this year, with the major miner, along with RIO and Fortescue doing well of late after the iron ore (SCOA) price picked up 7% this month, with China easing restrictions. On the downside, engineering company Downer (DOW) plunged 31% to $3.31, which is its lowest level since April 2020 after Downer downgrading its outlook and flagging irregularities in utilities business. In FX, the AUDUSD slides on Australia exports falling in October, and imports sinking; supporting the RBA remaining dovish Australia’s trade surplus fell in October, but less than expected. This reflects that Australia is earning less income as demand for commodities has fallen from its peak, ahead peak energy season and China easing restrictions. The Australian surplus fell from $12.4 billion to $12.2 billion (when the market expected the surplus to fall to $12 billion flat). In October, exports surprisingly fell 1%, vs market expectations they'd rise 1%, while imports fell 1%. This supports the RBA keeping rates low, as such after the data was released, the AUDUSD immediately fell.   For a weekly look at what to watch in markets - tune into our Spotlight.For a global look at markets – tune into our Podcast.   Source: Video: Risk picks up, oil erases 2022 gains, Campbell Soup boils up, General Mills rises | Saxo Group (home.saxo)

The euro stabilized against the US dollar on Thursday and the U.S. dollar clawed back some of the previous day's declines, as the market weighs in on the Fed's rate hike path. The euro benefited from the weakening of the US dollar The Australian dollar against the US currency fell sharply the 10-year Treasury note has fallen almost continuously EUR/USD was unable to overcome its late-June high EUR/USD hit a five-month high earlier this week but was unable to overcome its late-June high of 1.0615. The pair's mood remains bearish today. Compared to the previous day, the EUR/USD pair has fallen and is trading around 1.0469. The euro gained overnight after better-than-expected euro-wide GDP data showed an increase of 0.3% q/q in the third quarter instead of the expected 0.2%. This may indicate that the economic slowdown in Europe may not be as serious as previously feared. The European Central Bank will review its policy on 15 December. The broader weakness of the US dollar also helped strengthen the euro. GBP/USD The pound fell 0.3% against the dollar to $1.2175 and fell 0.35% against the euro. Sterling falls as falling UK house prices add to recession fears. The UK is facing a winter of strikes as rail workers, teachers and nurses demand better wages as the cost of living soared, exacerbated by rising energy costs after the Russian invasion of Ukraine. What's more, the prospects for next year are equally bleak. The UK economy could contract in the coming months. AUD/USD- commodity prices have a negative impact The Australian dollar against the US currency fell sharply this week. Currently, the pair is trading at mid-September levels. From The Australian Dollar (AUD) perspective, commodity prices have a negative impact on the currency coupled with yesterday's weaker GDP data. This morning started positively for the Australian dollar with a better-than-expected trade balance for October, but today the main focus will be on the US labor market data. If the reports turn out to be positive for the dollar, they will bring bears for the AUD/USD pair. Most recently, the Australian dollar got support from the easing of COVID restrictions in China, but that has since dissipated due to the rising number of COVID cases causing concern. The RBA's decision on interest rates also failed to support the Aussie. Overall, the current fundamental headwinds facing the AUD outweigh the US Dollar, which could suggest a potential downside risk for the Australian Dollar over the next few weeks. JPY is weaker The Japanese Yen is slightly weaker so far today despite GDP there narrowly beating forecasts. Annualised GDP was -.08% for the third quarter instead of -1.1% anticipated. The Japanese yen (JPY) which is highly sensitive to shifts in U.S. Treasury yields, fell 0.2% to 136.82. Instead the dollar-yen pair jumped. Currently, the pair is trading around 136.8130. The yield on the 10-year Treasury note has fallen almost continuously since hitting a 15-year high in late October. The Bank of Japan's ultra-loose monetary policy at a time when other central banks around the world are aggressively raising interest rates has made the yen the weakest major currency in the world in recent months. As a result, the USD/JPY exchange rate increased. However, according to some experts, the yen may rise against the US dollar next year. Source: finance.yahoo.com, dailyfx.com, investing.com

AUD/USD is aiming to surpass 0.6800 as the market sentiment has become extremely bullish. China’s factory-gate price deflation has cemented a dovish commentary from the PBOC. A decline in the US PPI data is going to delight the Fed as expectations for a drop in inflation will get strengthened. The AUD/USD pair is gathering momentum to surpass the immediate resistance of 0.6800 in the Tokyo session. The Aussie asset has gained strength as investors have underpinned the risk appetite theme. The major is holding its morning gains amid an intense sell-off in the US Dollar Index (DXY). The USD Index is hovering around 104.50 and is expected to re-test weekly lows around 104.10. Meanwhile, S&P500 futures have recovered morning losses and have resumed their upside journey. The 500-united States stock basket futures are looking to extend their gains as a slowdown in the interest rate hike pace looks imminent. While the 10-year US Treasury yields have dropped to near 3.46%. The Australian Dollar has picked strength as China’s factory-gate price index has shown a deflation. China Producer Price Index (PPI) displayed a contraction of 1.3%. Also, the annual inflation rate has dropped to 1.6% but remained higher than anticipation. A significant decline in inflationary pressures is going to create troubles for the Chinese administration. No doubt, a dovish commentary from the People’s Bank of China (PBOC) in the upcoming monetary policy meeting has been cemented. It is worth noting that Australia is a leading trading partner of China and fresh economic stimulus in the Chinese economy will also support the Australian Dollar. Meanwhile, investors in the United States are focusing on Producer Price Index (PPI) data. As per the projections, the headline PPI is expected to drop to 7.4% from the prior release of 8.0%. Also, the core PPI is seen lower at 6.0% vs. the former figure of 6.7% on an annual basis. A decline in US factory-gate price index is going to delight the Federal Reserve (Fed), which is working on foot to achieve price stability as early as possible.  

The dollar was broadly flat against major currencies on Friday as concerns about the health of the US economy resurfaced, as well as ahead of producer inflation data later in the day and the Federal Reserve's interest rate meeting next week Investors are expecting a series of interest rate decisions from central banks - including the Fed, the European Central Bank and the Bank of England - next week. Markets bet all three will limit pace of rate hikes, with hikes of 0.5bp The dollar index continued its decline yesterday keeping the Euro bulls on the front foot. The GBP/USD pair is rising for the third day in a row. The yen benefiting from growing expectations AUD/USD tried to regain ground today Read next: The FTC Is Trying To Block Microsoft's Merger With Activision| FXMAG.COM EUR/USD EUR/USD continues its grind higher in early European trade as key US data events lie ahead. The euro/dollar pair is trading in a better position than yesterday. This morning the euro rose 0.25% is $1.0581. The pair is currently trading at 1.0513. The dollar has a tendency for weakness in December. The dollar index continued its decline yesterday keeping the Euro bulls on the front foot. There has been comments this week from some ECB members discussing the possibility of further rate hikes. Later in the day attention turns to the US economic calendar as we await the US PPI as well as University of Michigan data. A positive data print could offer some support for the dollar while a weaker print could push EUR/USD lower. As for the US PPI, it is expected to maintain its previous level of -0.2%. A University of Michigan date specifically Michigan Consumer Sentiment is important, it is expected to increase by 0.1 to reach 56.9. GBP/USD GBP/USD Pair is on the buyers radar today. The GBP/USD pair is rising for the third day in a row and steadily climbing to the upper end of its weekly range. The pair points to a well-established short-term uptrend. A combination of factors is bringing the US dollar back to near the multi-month low reached earlier in the week. The Bank of England set to announce its monetary policy decision next week, with another interest rate increase of 50 basis points expected. It also can impact on the pound. Moreover, the gloomy outlook for the UK economy may keep investors from betting aggressively around the British pound and limit the GBP/USD pair, at least for now. Investors are now looking at Friday's US economic breakdown, which will release the Producer Price Index and flash Michigan Consumer Sentiment Index. This, along with US bond yields and broader risk sentiment, could influence USD price dynamics and provide some impulse for the cable market. AUD/USD AUD/USD tried to regain ground today China’s loosening Covid restrictions also lent optimism to the market, though renewed global recession fears and uncertainty around US Federal Reserve policy tightening kept sentiment in check. Meanwhile, latest data showed that Australia’s economy expanded less than expected in the third quarter as persistent inflation and rising interest rates dampened domestic consumption. The Reserve Bank of Australia raised its policy rate by 25 basis points to 3.1% at its December meeting. USD/JPY Currently, the pair is trading at 134.4750. On the daily chart, you can see that the dollar against the Japanese yen is falling. The recent weakness of the dollar affects the pair's advantage. The Japanese yen appreciated to around 136 per dollar, heading back to its highest levels. Also the yen benefiting from growing expectations that the Bank of Japan could end its ultra-easy monetary policy with inflation around 40-year highs. Source: investing.com, dailyfx.com, finance.yahoo.com

Next week we will have another powerful breakthrough in this respect: besides the release of important reports, 4 major world central banks (USA, Switzerland, UK and eurozone) will announce their decisions on monetary policies. The dollar may strengthen again. A strong US economy and aggressive interest rate hikes are strong assets for the US dollar, but not the only ones. The USD index rose as a result of strong demand for safe assets at a time when fear dominated the markets. A deep recession would increase the demand for the US dollar as a safe-haven asset. Read next:The Fed And Slowing Down The Pace Of Rate Hikes On Last Meeting This Year?| FXMAG.COM EUR/USD This week the pair started at 1.0545. This level was followed by a weekly high of 1.0585. On Wednesday, the pair met the expectations of ING economists and moved around 1.0400, thus reaching the lowest levels of the week at 1.0452. The mood was gloomy and the bulls had challenges ahead. The pair gradually recovered from losses and returned to trading above 1.0500. Currently, the pair is trading at 1.0572 There were no economic events during the week that could significantly affect the currency pair. On Wednesday, the euro received support from the eurozone as the domestic gross production reading was higher than expected. Moreover, the weak us dollar during the week added strength to EUR/USD. EUR/USD price movement will depend on the Federal Reserve and the European Central Bank. Next week the central banks will sum up the year results and outline further prospects. EUR/USD Weekly Chart GBP/USD The cable market started the week well at 1.2295. On the same day, GBP/USD hit its highest level of the week, trading at 1.2336. Tuesday and Wednesday were the weakest days for the couple. Just like EUR/USD, the pound/dollar also hit a low on Wednesday, dropping to 1.2107. After that, the pair rose and recorded a correction. Currently, the price of the pair is at 1.2239. This week has been empty in terms of reports. The movement of the pair was influenced mainly by the situation of the dollar. Next week brings a lot of emotions among traders. British reports will open in the coming week with data on industrial production and GDP for October. This report presents aggregated economic data and will have a major impact on the Bank of England's monetary policy decision (Thursday). GBP/USD Weekly Chart AUD/USD The pair of Australian dollar (AUD/USD) started the week at 0.6799. Like the British pound, the Aussie hit a weekly high on Monday. The highest price level was 0.6848. Then the pair began to wane. Following the trend of currencies from the old continent, Wednesday was the lowest level of the pair, 0.6672. And just like the pairs above, AUD/USD tried to recover. The pair closed the week at 0.6772. China's announcement of easing covid restrictions added support to the Australian dollar. On Tuesday, the Reserve Bank of Australia recently raised its key interest rate by 25 basis points to 3.1%, but the bank's decision did not add strong support to the AUD price. AUS/USD Weekly Chart USD/JPY USD/JPY started the week at a low of 134.4900, on the same day it recorded a weekly low of 134.1300. The upward trend continued until Wednesday. On that day, the Japanese yen pair peaked at 137.8010. There were declines after that. The week ended with USD/JPY at 135.0740 Undoubtedly, the weakness of the dollar and the statement of the representative of the Bank of Japan added support to the Yen. USD/JPY Weekly Chart Source: investing.com, finance.yahoo.com

On the daily chart, the price divergence with the Marlin oscillator has acquired a particular structure, but in spite of this, it is still a standard single divergence with price peaks on November 15 and December 5. Right now the price reversed from the resistance at 0.6799 and it is now moving towards 0.6730. Crossing the support will open the target at 0.6642. The Marlin oscillator is preparing to move into negative territory. On the four-hour chart, the price attacks the support of the MACD line (0.6755), the Marlin oscillator synchronously crosses the area below the zero line. Surpassing 0.6755 will inspire the price to attack the important level of 0.6730.     Relevance up to 04:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329474

India inflation reading out tonight but the highlight for the week will be US inflation and the Fed policy decision later in the week  Source: shutterstock Macro outlook Global Markets: At times, markets simply see what they want to see in the data to justify the direction they intended to go anyway, and Friday’s trading looked a lot like that. US data (on which more below) put in a mixed performance on Friday. On balance, the data still pushed in the direction of moderating inflation, but there were some upside misses (PPI) and some downside (University of Michigan inflation expectations) misses too.  Neither of these has all much relevance for this week’s CPI data, save to confirm that it will probably also show a moderation, though exactly how much, and what split between headline and core rates remain uncertain. Yet markets had been longing to correct, which is exactly what they did. The S&P500 lost 0.74%, rounding off a poor week, while the NASDAQ lost 0.7%. Chinese stocks finished in better form, still buying into the China reopening story. The CSI rose 0.99% on Friday, the Hang Seng rose 2.32%. US equity futures remain a little downbeat about today’s opening prices. US Treasury yields added a little more gloom to the market story, with yields rising, though only by 3.7bp for the 2Y, while the 10Y yield rose 9.6bp taking the yield to 3.578%.  EURUSD remains above 1.05, pulling back from just below the 1.06 level on Friday and settling slightly lower. The AUD is a little stronger at 0.6788, the same as Cable at 1.2246, and the JPY is more or less unchanged at 136.71.  Most Asian FX made small gains on Friday, but there aren’t many clues as to their direction today. For choice, it’s probably looking a bit more negative for Asian FX than positive today. G-7 Macro: As mentioned above, the news flow out of the US on Friday supported the moderating inflation theme. University of Michigan inflation expectations for one year ahead dropped to 4.6%YoY from 4.9%, against expectations for no change, but the PPI index for November showed producer price inflation dropping less than expected at both headline and core levels, and this was probably what markets zoomed in on when selling Treasuries and stocks on Friday. It’s a big week for macro and probably therefore markets this week, with US CPI on Tuesday, and the FOMC Wednesday (3am SGT Thursday), not to mention NFIB and retail sales. UK production and construction data dominate the G-7 calendar today, and while this may have implications for Gilts and sterling, probably won’t do too much to alter the broader market picture. India: November CPI inflation is expected to come in at 6.36%YoY by the Bloomberg consensus, though we think there is a bit of downside risk to that figure (ING f 6.2%YoY). Falling vegetable prices and stable gasoline prices will drive a weak month-on-month increase and help deliver the lower inflation print, which will then be only just above the RBI’s 4%+/-2% target and suggests that they may be getting close to a peak in rates with the policy rate in line with projected inflation at 6.25%YoY.  Probably one more hike early next year should do it for the RBI. What to look out for: Inflation reports and central bank meetings later in the week Japan PPI inflation (12 December) India CPI inflation and industrial production (12 December) Australia Westpac consumer confidence (13 December) Philippines trade balance (13 December) US CPI inflation (13 December) South Korea unemployment rate (14 December) Japan Tankan survey and industrial production (14 December) US MBA mortgage applications and import price index (14 December) FOMC policy meeting (15 December) New Zealand GDP (15 December) Japan trade balance (15 December) Australia labor report (15 December) China industrial production and retail sales (15 December) Indonesia trade balance (15 December) BSP policy meeting (15 December) Taiwan CBC policy meeting (15 December) ECB policy meeting (15 December) US retail sales and initial jobless claims (15 December) Singapore NODX (16 December) Japan Jibun PMI (16 December) Eurozone CPI inflation (16 December) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

AUD/USD remains depressed around intraday low during the first loss-making day in four. Bearish MACD signals, failure to cross weekly resistance line keep sellers hopeful. Buyers need validation from monthly high to retake control. AUD/USD retreats to 0.6775 as it defies the three-day winning streak heading into Monday’s European session. In doing so, the Aussie pair retreats toward the 200-Hour Moving Average (HMA) amid the bearish MACD signals. It’s worth noting that the quote’s failure to cross a one-week-old ascending trend line also contributes to the bearish bias. That said, the AUD/USD weakness past the 200-HMA level of 0.6755 will aim for the 50% Fibonacci retracement level of the pair’s November 29 to December 05 upside, near .6745. However, a two-week-old horizontal support area surrounding 0.6670 appears a tough nut to crack for the AUD/USD bears. In a case where AUD/USD remains bearish past 0.6670, a downward trajectory towards the late November swing low near 0.6585 can’t be ruled out. Meanwhile, recovery moves may initially confront the 23.6% Fibonacci retracement level round the 0.6800 round figure before challenging an upward-sloping resistance line near 0.6825. Even if the AUD/USD bulls manage to cross the 0.6825 hurdle, the monthly high of 0.6850 will act as an extra upside filter to challenge the pair’s further advances. Overall, AUD/USD is likely to witness a short-term pullback but the bulls remain hopeful unless witnessing a clear downside break of 0.6670. AUD/USD: Hourly chart Trend: Further downside expected  

This week is one of the most macro-packed so far this year, with four major central banks holding their final policy meetings of the year, plus consumer inflation data from the United States that could be instrumental in determining the outlook for U.S. interest rates and the dollar. The U.S. Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank will all release rate decisions. Overall, risk assets came under pressure on Monday despite further signs from China that it may be moving away from its very restrictive Covid-19 policy. Read next: Rivian Break Down Of Joint Venture Negotiations With Mercedes | Amgen Inc. Begins Action to Acquire Pharmaceutical Company Horizon Therapeutics| FXMAG.COM Euro Holds Above $1.05 Ahead of Key Policy Meetings A package of positive readings from Great Britain appeared. Against the yen the dollar rose 0.2% EUR/USD EUR/USD has been rising since reaching a 20-year low of 0.9536 in October. The rate reached the level of 1.0595, but was unable to break the breakout point and the previous high at 1.0615 and 1.0638 respectively. It is currently trading around the 1.0560 level with an upside bias. The euro is weaker today as the US dollar gains ahead of a crucial week of central bank meetings and data. There are no key macro economic events for the EUR/USD pair today. The European Central Bank is expected to deliver a dialed-down 50 bps rate hike on Thursday. Meanwhile, all eyes turn to CPI numbers from the US due on Tuesday GBP/USD The overall look of the cable market looks bearish. The GBP/USD pair is currently trading close to the level it closed last week at 1.2239. On the daily chart, we can see that the price of the cable has increased to this level. Trading on the daily chart shows the price around 1.2280. The British pound was subdued in reaction to the breaking of British GDP this morning, however, after the start of the European session, the reaction may be more positive. Other reports were also positive with only Industrial Production (MoM) (Oct) dropping to 0.0%. Source: investing.com GBP/USD daily chart AUD/USD The Australian dolar was last down 0.4% at $0.6772. Today, the AUD/USD pair reached 0.6795 during the day and then started to fall. On the daily chart, we can see that the pair is trading at 0.6756. USD/JPY USD/JPY started the week with gains. The pair rose from 135.0740 – the last week close level - to 136.8440 - current trade. This means that the Japanese yen is negatively compared to the US dollar. In other words against the yen the dollar rose 0.2% Today there were reports of the Japanese PPI, which was higher than expected. Year on year PPI reached 9.3% and PPI m/m 0.6% However, they did not support the yen. The last statement of the representatives of the Bank of Japan still plays a role. Bank of Japan Governor Haruhiko Kuroda recently said it was too early to discuss the possibility of reviewing the central bank's monetary policy framework. However, an analyst close to policy makers suggested that the BoJ may drop the 10-year bond yield cap as early as next year. Source: investing.com, dailyfx.com, finance.yahoo.com

AUD/USD recovers from intraday low but stays indecisive on a daily basis. Bearish RSI divergence, rising wedge keeps sellers hopeful even as 100-DMA adds to the downside filters. Recovery remains elusive below 0.6880, weekly high guards immediate upside. AUD/USD picks up bids to pare the previous day’s losses around 0.6755-60 heading into Tuesday’s European session. In doing so, the Aussie pair bounces off intraday low but stays inside a one-month-old rising wedge bearish chart pattern. In addition to the rising wedge, the bearish RSI divergence also teases the AUD/USD bears despite the pair’s latest recovery. On the same line could be the consecutive bearish MACD signals published in the last week. When a higher high on prices fails to gain support from the higher tops of the RSI, it is called the bearish RSI divergence and suggests the quote’s downside. That said, the 0.6800 round figure and the weekly high near 0.6815 challenge the near-term AUD/USD upside ahead of the stated wedge’s upper line, close to 0.6680 by the press time. In a case where the Aussie bulls manage to keep the reins past 0.6880, September’s high near 0.6915 will be in focus. Alternatively, pullback moves could aim for the aforementioned wedge’s lower line, near 0.6695 at the latest, a break of which will confirm the bearish chart pattern that theoretically suggests a south-run towards the mid-0.6400s. During the fall, tops marked in October near 0.6550 and 0.6520, as well as the 100-DMA level surrounding 0.6675, could act as intermediate halts. AUD/USD: Daily chart Trend: Further downside expected  

Tensions over what signals the Fed will show are rising due to a recent article that said officials are divided on how long rates should increase. According to the note, some expect a steady decline in inflation in the coming months, so the rate hike should be stopped as soon as possible. Others, however, fear that inflation will not fall adequately next year, so they call for rates to be raised further, or at least held high longer. The US inflation report for November will be published today, but so far businesses are not yet seeing any threats of higher inflation. In fact, yields on 5-year TIPS bonds have been falling since March 2022. Another increase in inflation will cause another uncertainty to the economy, which will ramp up demand for dollar, while reducing risk appetite. NZD/USD A further rise in government spending is likely to increase the risk of tougher policy in New Zealand. This means that interest rates could be raised above forecast, which the RBNZ estimates is at 5.5%, while the ANZ bank sees 5.75%. If that happens, the country will fall into recession much faster than expected, but bond yields will be higher, which would strengthen expectations of a yield spread. Positioning on NZD continues to be bearish, but the performance is still minimal and close to neutral. Net short positions increased by 97m to -411m during the week, however, the estimated price shows no intention to turn downwards yet, which means that the direction of capital flows is more inclined to a rise. NZD/USD is trading in a narrow range, near the resistance level of 0.6460/80. Bulls do not have enough strength to trigger a breakout, but it could hit 0.6240/50 as long as the Fed shows a more hawkish view on its monetary policy. AUD/USD Business confidence turned negative in November, falling below zero for the first time since November 2021. Fortunately, conditions remained fairly high at +20p. But with activity persisting, there is little sign of any reversal in inflation. Cost growth remained largely unchanged at elevated levels on both the labor and input costs, while retail prices continued to rise at a rapid pace. Overall, there is growing concern that the strength of the economy will converge in 2023. This indicates that companies are becoming increasingly pessimistic due to the slowdown in global economy, weaker consumption, rising inflation and higher rates that are lowering real household incomes. That is why it was not a surprise that net short positions in AUD declined by 272 million to -2.713 billion during the week. Bearish performance persists, but the medium-term trend is in AUD's favor. The settlement price is above the long-term average, pointing upwards, which suggests that attempts to go higher will continue. Even so, AUD has shown the weakest momentum among the G10 currencies over the past week due to both volatility in the Fed's monetary policy outlook and growing worries over whether China is willing to cut their restrictions. Hitting 0.6880 and 0.6910/30 are possible, but only if the Fed gives hawkish signals on Wednesday evening. The strength of AUD is also not enough for a sustained rise.   Relevance up to 07:00 2022-12-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329635

Australia's economy is showing clear signs of slowing and will drop further in 2023. House price growth appears to be on the cusp of turning negative and provides a rationale for a peak cash rate at the relatively low level of 3.6%. We believe the economic slowdown will be accompanied by a similarly rapid decline in inflation Macroeconomy: inflation outlook turning down A lot has changed in the last year. In October 2021, the Reserve Bank of Australia (RBA) was still maintaining that the inflation target would not be sustainably met until 2024. A month later, it was abandoning its yield curve control in the face of market pressures. By May of this year, the RBA was hiking rates, throwing in the towel on its previous stance that concluded inflation would not sustainably be up to the RBA’s target until wage growth exceeded 3.5% (it still isn’t based on the 3Q22 wage price index). Inflation hit 7.3% year-on-year in the third quarter of this year, with rises also in core measures, although the October monthly series has raised hopes that inflation may already have peaked, dropping to 6.9%YoY. We think it will now slow quite rapidly. Policy rates nearing a peak Source: CEIC, ING Inflation is mainly due to goods, not services Most of Australia's inflation comes from goods rather than the service sector. But this is not simply an imported phenomenon. Inflation in the tradeable sector is no higher than in the non-traded sector. However, what this does mean is that this is less likely a labour-cost-driven event than a discrete price-level shock (or series of shocks), and as such, is probably easier to squeeze out of the economy. Inflation by source (goods vs services and tradeable vs non-tradeable) Source: CEIC, ING Don't blame inflation on wages growth, which remains negative in real terms By sub-component, there are few inflation standouts. Certainly, the transport sub-component was swollen earlier in the year by high oil prices, although with Brent crude now back below $90/bbl, oil is no longer contributing to higher inflation, and may even be a slight drag in the near future. Widespread flooding this year across many parts of the country has also pushed up food prices at times. Everything from cereals to dairy was looking more expensive. Though even this looks to be normalising.  In the near-term, inflation is likely to remain the focus for policy-setters and the investment community. But on the assumption that energy prices remain roughly where they are now and do not re-accelerate upwards from here, we look for inflation to rapidly subside over 2023 and could be as low as about 3.0%YoY by the end of 2023.  One thing that policymakers obsess over is second-round price effects – wage-price spirals for example. RBA anecdotes point to a pick-up in wages, which fills in the gaps left by the wage-price index, which is only released quarterly and with long lags. That is only showing a growth rate of 3.1%YoY (3Q22). The wage price index inflation rate will surely rise further, but the large current gap between wages and prices shows that wages are being dragged higher, rather than driving prices higher. In the end, the wage component of the economy is becoming less of a cost issue than other components. We do not need to worry unduly about the cost implications of this. The labour market as a whole is not squeezing margins, though admittedly there will be pockets of the service sector where it is. Employment growth by sector Source: CEIC, ING Household spending is running out of sources of growth So far this year, consumer spending has by far contributed to the bulk of GDP growth. And that is not just because consumer spending accounts for the bulk of GDP. It has also been growing unlike most other parts of GDP.  Underpinning that real spending growth – which as we have determined is not a function of wages (which are falling in real terms) – is employment growth. The last 12 months have seen Australia adding around 400,000 jobs to a labour force of just over 14 million. More than half of these jobs were full-time (generally better-paying) jobs. Comparing employment against its values four quarters ago, we see that the gains are not in manufacturing or agriculture. Lately, jobs in the hospitality industry have been on the rise (some of which may be part-time), as well as in the wholesale and retail sectors. Construction jobs have also gained ground recently. Within the other service sector jobs, not surprisingly in the wake of the Covid-19 pandemic, healthcare-related jobs, as well as professional and scientific jobs, rose consistently, although growth in these areas is now beginning to slow. Jobs growth in public administration is also slowing down now after rising in the previous three quarters, and so too are jobs in finance. In the three months since July, the number of employed has stagnated at just over 13.6 million. It looks like the boost to spending likely to come from employment growth is slowing. And with wages negative in real terms, the only way household spending is going to continue to boost economic growth in the quarters ahead is if households draw down savings (e.g. borrow more). That doesn’t look as if it is going to happen to any large extent. Household balance sheets received a big boost during the pandemic, mainly from markets juiced up by easing monetary policy pushing up equity prices and reserves held in superannuation accounts. Liquid savings in the form of currency and deposits also picked up. But household balance sheets peaked at the turn of the year and have since begun to decline. And while liquid assets will provide a solid buffer, the household savings ratio has now fallen to 6.9%, well below the post-war historical average of 9.5%, so further declines are probably going to be limited unless they are a response to crisis conditions. And if that is the cause, then it probably won’t matter all that much. Rising interest rates will also deter discretionary dis-saving. Savings ratio and personal income growth (YoY%) Source: CEIC, ING Rent-reset shocks should be modest in 2023 Another factor that could weigh on household spending is that a sizeable number of Australian households will be facing much higher mortgage payments shortly after the New Year. The latest Financial Stability Review by the Reserve Bank has a detailed chapter on the impact of rising interest rates and inflation on indebted households’ cash flows. Households that are owner-occupiers with variable-rate mortgages account for about two-fifths of outstanding housing credit. Many of these are making sizeable prepayments on their mortgages, which they could trim back as rates rise. Some (about 15% according to the RBA) might see their spare cash flow turn negative, requiring a drawdown of savings buffers, with the possibility that some owners might even fall into arrears. Using scenario analysis based on market expectations for the likely further increase in the cash rate, the RBA analysis noted that: “Just over half of variable-rate owner-occupier borrowers would see their spare cash flows decline by more than 20% over the next couple of years, including around 15% of households whose spare cash flows would become negative as the combined burden of higher interest payments and the higher cost of essential goods and services exceed their initial spare cash flows.” Mortgage rates to reset Source: Reserve Bank of Australia House price inflation likely to turn even more negative in 2023 Around 35% of outstanding household credit is for fixed-rate mortgages (including split-rate loans). And around two-thirds of these are due to expire by the end of 2023. The RBA estimates that most fixed-rate borrowers will face a discrete rise of 3-4 percentage points in their mortgage rates when they re-set. Some will face this re-set as early as January 2023. That being said, the current household finance ratio is still close to all-time lows at around 5-6% of disposable household income, so this would only take it back to historical norms.   The rate of quarterly increase in mean house prices peaked in the third quarter of 2021 at 6.7% quarter-on-quarter, but it has been slowing ever since. In the second quarter of this year, house prices registered a small (-1.8%QoQ) decline, which was followed by a larger decline in the third quarter (-4.0%QoQ). Annual house price growth has now dropped to only 1.1 %YoY.  We anticipate this price decline continuing through at least the first half of 2023 before prices begin to stabilise and then slowly turn around again. Year-on-year house price growth will turn negative in the first quarter of 2023 and could show something close to a 10%YoY decline at its worst in the second quarter before starting to stabilise. Year-on-year house price declines will likely persist until early 2024, and while they do, they should put a further dampener on household spending. House price inflation already dropping sharply Source: CEIC, ING Business investment: not coming to the rescue Business investment is a much smaller proportion of Australian GDP than consumer spending, but its importance for the business cycle is not to be underestimated, since it is the variance of GDP components, as well as their absolute size that provides the impetus to cyclical swings. Business investment Source: CEIC, ING   Gross fixed capital formation is the official GDP term for such business investment, and this grew by 0.7%QoQ in the third quarter of this year, however this wasn't enough to prop up the year-on-year growth rate, which showed a contraction of 0.3%YoY. As rates continue to rise, the domestic economy slows, and Australia's main trading partners skirt recession, it is hard to believe that there won't be a further slowdown in the pace of business investment. Construction by type (contribution to GDP YoY%) Source: CEIC, ING Construction going nowhere For the subset of business investment that falls under the generic term “construction”, there has not been any contribution to GDP from this sector for several quarters. Residential construction (on dwellings) has been a recent underperformer, dragging on year-on-year GDP growth by more than 0.2pp in the last two quarters. This could well deteriorate further given what is happening to the housing market. There is a marginally less dour story emerging on engineering construction. This comes mainly from electricity generating expenditure and roadbuilding, and less from the extraction industries, where spending is softening. Extraction exploration: no longer following the money Normally, we would expect exploration expenditure in the extraction industries to follow the price of the underlying commodity. That would support spending on coal extraction, and maybe natural gas. Instead, what we see is that the liveliest investment part of this industry in recent years relates to gold, though this too is beginning to peak out. It is possible that this mix of exploration spending reflects new attitudes to fossil fuels and the financing of their extraction. Indeed, we also see relatively muted exploration expenditures in onshore and offshore petroleum (including natural gas) which would tie in with that hypothesis. In short, while there remain some pockets of resilience, business investment overall is flat to slightly down, and we anticipate the going getting even tougher during 2023 before recovering in a more supportive lower rates environment in 2024. Extraction exploration (AUDm four quarter moving average) Source: CEIC, ING Trade is already dragging on growth, but this should slow One bright spot in the economy has been international trade. Thanks in part to some extremely helpful swings in Australia’s terms of trade (the ratio of export prices to import prices), what was once a long-standing deficit and leakage from the economy has provided a consistent surplus since late 2016. The 12-month average trade surplus is now more than AUD10bn and is still trending higher, though more slowly than it was. That slowdown in trade surplus expansion means that the contribution to year-on-year GDP growth from net exports actually turned to a small drag at the end of 2021, and has subtracted from year-on-year growth in three out of the last four quarters. That contribution could change as the domestic economy, in particular household consumption, slows further, causing import growth to decelerate. Though it may have to slow quite a lot if it is to outweigh the slowdown in external demand likely to stem from the US, Europe and China all effectively going into recession in 2023 and weighing on exports. The external environment could begin to turn around in the second half of 2023. But that's not a foregone conclusion.   Contributions to Australian GDP (QoQ%) Source: CEIC, ING Terms of trade have helped create Australia's external surplus The upswing in Australia's terms of trade implies a much stronger AUD/USD exchange rate than has actually been the case, and this will also have helped to keep Australia’s exports very competitive. The fact that the currency has not absorbed more of the terms of trade shift owes a lot to the RBA’s seemingly conscious decision to always pitch monetary policy on the dovish side of the US Federal Reserve and will have helped keep the AUD weaker and more competitive than it would otherwise have been.  Considering how important China has been to Australia’s export success, it is perhaps even more surprising that Australia’s trade surplus has held up so well. Digging into the data, after China closed some export avenues with Australia following political disagreements, export flows into China seem to have been steadily improving again. It may be that given China’s domestic economic weakness and the stresses following the Russia-Ukraine war, the authorities have decided to take a more pragmatic approach to trade with Australia. We think this will continue, however China's domestic weakness remains a concern, and it is not clear that recent efforts at re-opening will bear fruit quickly – though in time this approach is probably the right way forward  Terms of trade and trade surplus Source: CEIC, ING Financial markets: a more positive outlook despite the economic slowdown The Reserve Bank of Australia successfully adopted what might be described as a "dovish pivot" at its October meeting, slowing the pace of tightening from 50bp to only 25bp, and taking greater account of the current level of rates and the absolute change in the policy rate from its pandemic low. Following the latest 25bp rate hike at the December meeting, the current cash-rate target is 3.10%, up 300bp from its pandemic low of 0.1%.  This finessing of the tightening that the RBA is implementing has been vindicated by subsequent inflation data and also the slowdown becoming more apparent in GDP growth and the housing market.  Recent RBA statements still claim that policy will respond to the flow of data. However, it looks more like policy is not particularly data-dependent, but is instead, “state-dependent”. And the current "state" is that policy may now be in mildly restrictive territory and has already tightened a lot. We don’t, therefore, expect policy tightening to deviate on the upside from the current 25bp per meeting approach over the next few months, whatever the data delivers, and look for rates to get up to no more than 3.6% in the first quarter of next year. At this point, with inflation clearly on its way down, we think the RBA will opt to keep rates on hold.  Australian bond yields Source: CEIC, ING   This approach to monetary policy is considerably less hawkish than that suggested by the Federal Reserve. And so while longer-dated Australian government bonds are very heavily influenced by US treasuries (correlation coefficient of 0.98 over the last two years) Australian 10Y yields have recently traded lower than their US counterparts, following a long period of trading above them. This looks set to continue and the negative spread could even widen further – though we have to add that the actual path of both US Treasuries and Australian government bonds is subject to considerable uncertainty.  That Fed/bond yield view is also likely to play a large role in the outlook for the AUD. You can do lots of fancy analysis about iron ore futures, terms of trade, trade surpluses and relative producer prices and rates of productivity. But in the end, like the importance of Treasury yields for AUD government bond yields, the direction of EUR/USD is likely to explain most of the variance of the AUD over the next 12 months. A sense of peak Fed funds and bond yields is likely to correlate with a shift out of the USD and into everything else. It is possible this has already started, though there is still a tail risk of a further down leg in sentiment as the global recession is priced into risk assets more fully than it currently is.   The year ahead for Australia is likely to exhibit considerably slower growth, but also a peak in inflation, which raises the prospects of a shift in domestic and foreign monetary policy. And it is this elimination of inflation and turning rate cycle that will usher in an eventual improvement in market sentiment and eventually the real economy. Even with growth slowing, we still look for growth to come close to (but below) 2% for the full-year 2023 (and not much more in 2024). On paper, that is still a fairly soft landing, though we concede that it could be harder, especially if we get a more violent correction in real estate prices than we are anticipating, or if financial markets fall more heavily. In this respect, the RBA's recent caution seems much better suited to the economic backdrop than a more hawkish "higher for longer" approach.  Summary forecast table Source: CEIC, ING Read this article on THINK TagsRBA rate policy Australian inflation Australian house prices Australia economy AUD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The Australian dollar rose 111 pips on Tuesday. The price is falling this morning, which updated the double divergence. It has not yet reached the target level of 0.6917, and there could be two reasons why: the level was not correctly defined at the time, the price reversed from the nearest level at 0.6894, the September 2019 high. A confirmation of the reversal is when the price returns below 0.6799. In this case, the 0.6730 target and further at 0.6642 will become available. The alternative scenario assumes that the price will settle above 0.6894-0.6917 and it will continue to rise to 0.7048 - the August 1 high. On the four-hour chart, the price is in the upward position, it is above the indicator lines, the Marlin is in the growth area. The main momentum will be set by the results of today's Federal Reserve meeting. Relevance up to 04:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329731

Dollar bears have come out of hibernation. After gaining 16% in the first 10 months of the year, the dollar index, which measures the dollar against a basket of currencies, lost 5% in November. It has since fallen another 1%, reflecting a smaller-than-expected increase in consumer prices in November. Fed ahead In currency markets, the dollar fell again after tumbling against a range of major currencies on Tuesday. The dollar is also facing more headwinds. The Federal Reserve is expected to reduce the scale of future interest rate hikes, which would allow other central banks to close the interest rate gap that attracts investment to the United States. US interest rates, which are the lower bound on both government and corporate bond yields, range from 3.75% to 4%, which is well above rates in other major economies such as the Eurozone where the deposit rate is 1.5%, or Japan, where interest rates are actually negative. Today the Fed will make its last decision of the year. Futures pricing shows markets expect the Fed will slow the pace of hikes. The latest rate hike is expected to raise rates by 50 bp this time. Fed officials say interest rates will go up. They want investors to focus on trajectory, not pace, and are signaling that interest rates could peak above market-expected 4.8% and stay there for most of 2023. If the Fed sticks to the "higher for longer" mantra central banks in Europe, the UK and China will struggle to catch up given the volatile state of their economies. EUR/USD The EUR/USD benefited from the release of inflation data, breaking the level above 1.06. The euro rose by 0.9% yesterday, and the pan-European Stoxx 600 index saw gains of 1.29%. However, the European Central Bank is also getting ready for a 50bps rate hike tomorrow. In Europe, the ECB will announce its latest monetary policy decision tomorrow. Both the Fed and the ECB are expected to raise interest rates by 50 basis points, keeping the rate differential between them the same, but central banks may differ in their forecasts for the coming months. Differences in the forecasts of the two central banks for the coming months will determine where EUR/USD will trade in the short to medium term. Read next: "Candid Stories" - Instagram like BeReal? Supermarkets Are Doubling The Number Of Their Own Product Lines | FXMAG.COM GBP/USD Yesterday, GBP/USD opened the prospect of a move towards 1.2750 after breaking 1.2300. The pound rose by 0.82% against the dollar yesterday to reach a 6-month high. The upward price movement was due to newly released inflation data from the US. Today, decisions on monetary policy will be announced by the Fed, and on Thursday, next to the ECB, the Bank of England. The Bank of England will have to contend with the biggest drop in living standards in history as the energy crisis, fiscal austerity and lack of growth eat into British household budgets. After positive GDP data on Monday, UK Chancellor Jeremy Hunt warned that the economy could get worse before it got better. While yesterday's employment figures were largely positive, they indicated a slowdown in employment as firms prepare for a tough start to 2023. The Bank of England released its Financial Stability Report yesterday, warning that 2023 will be a tough year for British households due to a combination of falling real incomes, rising mortgage costs and higher unemployment. AUD/USD The Aussie Pair benefited from lower-than-expected US inflation. Yesterday, the pair was trading low in daily levels in the 0.6733-0.6793 range. Today, the quotes are higher above 0.68, oscillating close to the highest levels in three months The lack of events on the Australian market makes the AUD/USD pair dependent on reports and events from America. USD/JPY The Japanese yen held its recent advance to below 136 per dollar. Yesterday, the USD/JPY traded above 137. The decline will occur after the release of US inflation data. The drop took place from the level of 137.2760 to the level of 135.3800. Currently, the pair is trading at a price of 135.0040.   Source: finance.yahoo.com, investing.com, dailyfx.com

AUD/USD takes offers to refresh intraday low, reverses from 6.5-month-old resistance line. Sluggish oscillators add strength to the pullback moves targeting November’s peak. Three-week-old ascending trend line, 100-DMA challenge bears before giving them control. AUD/USD stands on slippery grounds as it drops to 0.6825 while refreshing daily low during early Thursday morning in Europe. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM In doing so, the Aussie pair reverses from the downward-sloping resistance line from early June. Given the sluggish prints of the RSI and MACD, the latest pullback from an important hurdle is likely to extend. However, multiple tops marked since mid-November, near the 0.6800 round figure, could challenge the AUD/USD bears. Following that, a south-run towards a three-week-long support line, close to 0.6710 at the latest, can’t be ruled out. In a case where the AUD/USD pair remains bearish past 0.6710, the July low near 0.6680 and the 100-DMA level surrounding 0.6675 by the press time, could challenge the quote’s further downside. On the flip side, recovery moves need to provide a daily closing beyond the 6.5-month-old resistance line, currently near 0.6880, to recall the AUD/USD bulls. Even so, the monthly high near 0.6900 and the 50% Fibonacci retracement level of the pair’s April-October downside, near 0.6915, could challenge the upside momentum before highlighting the 0.7000 psychological magnet for the buyers. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM   AUD/USD: Daily chart Trend: Limited downside expected

Following the highly volatile action witnessed during the American trading hours on Wednesday, markets stay relatively quiet early Thursday with investors gearing up for the Bank of England and the European Central Bank policy announcements. The Swiss National Bank will also unveil its interest rate decision and the US economic docket will feature Retail Sales and Industrial Production data for November alongside the weekly Initial Jobless Claims and the NY Fed's Empire State Manufacturing Survey. As expected, the Federal Reserve hiked its policy rate by 50 basis points to the range of 4.25-4.5% following its December policy meeting. The revised Summary of Economic Projections (SEP) showed that the median terminal rate projection rose to 5.1% from 4.6% in September's SEP. Although the initial market reaction to the hawkish dot plot provided a boost to the US Dollar, the currency lost its strength during FOMC Chairman Jerome Powell's press conference. Powell said no one knew if the US economy would tilt into a recession next year or not and added that they could revise the peak rate projection lower if they continued to see soft inflation data. The US Dollar Index (DXY) fell to its weakest level in six months at 103.44 late Wednesday and the 10-year US Treasury bond yield retreated below 3.5%. The risk-averse market environment helps the US Dollar stay resilient against its rivals in the European session on Thursday with the DXY clinging to modest recovery gains slightly below 104.00. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM Earlier in the day, the data from China showed that Retail Sales contracted at an annual rate of 5.9% in November, missing the market expectation for a decrease of 3.6%. Additionally, Industrial Production expanded by 2.2% in the same period, compared to analysts' estimate of +3.6%: Australian Bureau of Statistics announced on Thursday that the Unemployment Rate stayed unchanged at 3.4% in November with the Employment Changed coming in at +64K. Nevertheless, AUD/USD struggled to capitalize on the upbeat data and declined toward 0.6800, pressured by the risk-averse market environment and dismal macroeconomic figures from China. Similarly, NZD/USD stays on the back foot and trades in negative territory below 0.6450. The data from New Zealand revealed that the Gross Domestic Product expanded at an annual rate of 6.4% in the third quarter, beating analysts' projections of 5.5%. EUR/USD came within a touching distance of 1.0700 late Wednesday before retreating toward 1.0650 on Thursday. The ECB is widely expected to raise its policy rate by 50 bps. Hence, investors will pay close attention to revised quarterly projections and President Christine Lagarde's comments on QT and the policy outlook.  ECB Preview: Five reasons to expect Lagarde to lift the Euro with a hawkish hike. GBP/USD touched its highest level since early June near 1.2450 on Wednesday but lost its traction. As market participants gear up for the BOE rate announcements, the pair trades in negative territory slightly below 1.2400. BoE Interest Rate Decision Preview: Focus on vote split amid high inflation and economic gloom. USD/JPY struggled to make a decisive move in either direction on Wednesday and closed the day flat. The pair clings to modest daily gains above 135.70 in the European morning. USD/CHF slumped to its lowest level since late March at 0.9216 late Wednesday but managed to stage a rebound. The pair holds above 0.9250 so far on Thursday. The SNB is expected to raise the policy rate by 50 bps to 1% but some experts think that the bank could opt for a 75 bps hike instead. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM Bitcoin rose to its highest level in over a month near $18,400 on Wednesday but erased its daily gains before closing flat below $18,000. BTC/USD edges lower early Thursday and trades near $17,700. Ethereum lost nearly 1% on Wednesday and is already down more than 1% on Thursday, trading slightly below $1,300.

Post-Fed volatility risk is not over yet. All eyes are on the ECB's approach to quantitative monetary tightening and economic updates from the BoE. The US Federal Reserve has also delivered a 50bps interest rate hike, pushing borrowing costs to the highest level since 2007 and hinting at a rate peak of 5.1% next year, above previous projections The Federal Reserve's decision was as provocative as expected for policy decisions - at least in relation to market expectations. The observation of volatility from risk assets and the dollar was noticeably more limited than one might expect Despite Chairman Powell's hawkish tone, the US dollar fell to a new low. The dollar has since fallen to a new five-month low. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM EUR/USD The EUR/USD Pair is trading soft on the session and drops just before the ECB meeting. The euro fell 0.67% to $1.0611 The European Central Bank was set to raise interest rates for the fourth time in a row, although by less than at its last two meetings. The decision was as expected, ie a 50bp hike. Thus, interest rates in the euro zone reached the level of 2.50% Supply chain crisis in the Eurozone economy have not calmed yet as war tensions between Russia and Ukraine are still solid. This is expected to keep Eurozone inflation expectations solid ahead. The European Central Bank expects the inflation rate to remain above 2% for the next three years. This will force the president of the European Central Bank, Christine Lagarde, to further tighten interest rate policy in order to tame rampant inflation. GBP/USD There is an interest rate decision by the Bank of England, and the big fear is the same as the ECB's: recession fears that could stop the Central Bank from raising interest rates further next year. This could result in discrepancies in interest rate expectations between the US and the UK. The Bank of England (BoE) has raised interest rates for the 9th consecutive meeting as the UK central bank continues to battle with inflation. The BoE raised the bank rate by 0.50% to 3.50% today After the expected half-point increase by the Bank of England, the British pound continued to fall. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM AUD/USD The Australian dollar weakens slightly following disappointing rounds of key Chinese economic data. The Australian dollar is moving within a bearish trend China's slowdown has negative consequences for Australia. China is Australia's largest trading partner. Thus, economic performance in the former often has knock-on effects on the latter. If this is the case, a slowdown in China could hurt Australian production in the future, perhaps inspiring the Reserve Bank of Australia to change its policy course USD/JPY USD/JPY Pair rose to 136.6907 from 135.4721 getting a lift from the Fed decision. The Japan trade deficit narrowed modestly in November according to data released overnight, with brisk growth for both imports and exports. Source: finance.yahoo.com, investing.com

The Australian dollar fell by more than 160 pips on Thursday, crossing the entire range of the ascending local channel (flag) on the daily chart in two days. In order to continue the decline, the price should go below the lower limit of this newly formed channel, which is yesterday's low at 0.6678. After that the price has two nearest target levels, 0.6642 and 0.6590. The MACD indicator line is between 0.6525 and 0.6590. The main struggle for further medium-term prospects will unfold in this range. The signal line of the Marlin oscillator completed the formation of a complex structure of divergence, and now it is in the area of the downtrend. On the four-hour chart, the price corrects after yesterday's strong move. Resistance is at 0.6730. After completing the correction, we expect the aussie to fall further. Relevance up to 03:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329989

AUD/USD retreats from intraday high to 0.6700 amid early Friday morning in Europe. In doing so, the Aussie pair takes clues from the options market while defending the previous day’s bearish bias that portrayed the quote’s heaviest slump in 33 months. That said, the one-month risk reversal (RR) of AUD/USD,  a gauge of calls to puts, drops the most in three weeks on daily basis, per data source Reuters. That said, the spread between call and put options prints -0.035 level by the press time. The bearish bias in the options market could be linked to the broad pessimism surrounding global economic transition and central bankers’ moves. Also likely to have weighed on the sentiment could be the US-China tussles, not to forget the dragon nation’s lack of ability to convince traders of the economic recovery. It should be noted, however, that the weekly RR remains firmer for the fourth consecutive time, to 0.130 at the latest, which in turn challenges the downside bias amid Friday’s sluggish start. Also read: AUD/USD extends its recovery to near 0.6740 as risk off impulse eases, US PMI in focus

The dollar was little changed on Friday after jumping in the previous session as traders analyzed a string of central bank rate hikes and grappled with the prospect that borrowing costs could still rise. This week has been hot in central bank events. The Fed raised its key interest rate by 50 basis points on Tuesday. Jerome Powell's speech at the press conference sparked volatility in the market.Further tightening is excellent news for the US dollar. Yesterday, the ECB and the BoE also followed the Fed and raised rates by 50 bp. GBP/USD Thursday's Bank of England rate hike of 0.5 percentage point pushed base rates to highs not seen since 2008 (3.5%). But even that wasn't enough to prevent GBP/USD from its biggest daily drop in six weeks The markets interpreted the move as a "dovish" increase in interest rates, even though six of the nine members of the Monetary Policy Committee in London voted for it, and another member wanted stricter action. This division does not suggest that the Bank is willing to refrain from further rate hikes. Thursday's close of the day showed that GBP/USD fell convincingly below the uptrend line that had previously held back bearish enthusiasm for five weeks. This puts clear downward pressure on the pair. The pound fell on Friday against the euro and the U.S. dolar. Sterling fell 0.2% to $1.2160 against the dolar, versus the euro , the pound exchanged hands at 87.39 pence, 0.2% lower on the day. EUR/USD EUR/USD touched a post-ECB high of 1.0736 yesterday before consolidating gains around the 1.0650 area. The technical set-up for the pair remains positive. Yesterday the European Central Bank raised interest rates by 50 bp as expected. Thus, the rate level reached 2.50%. This level was last seen in 2008. The ECB expects it to increase further. The European Central Bank (ECB) will raise interest rates "significantly" in the coming months to fight entrenched inflation, The ECB President Christine Lagarde said yesterday, sending a hawkish signal to the market. This signal turned out to be crucial for the strength of the euro. The ECB's hawkish stance, if fully realized, suggests that the single currency has room to grow in the coming weeks. Read next: Knorr-Bremse Strengthens Its ESG Measures In Partnership With Deutsche Bank | Arizona Is Attractive For The EV Market | FXMAG.COM USD/JPY Against the Japanese yen, the dollar fell 0.54% to 137.01 on Friday. The Japanese yen held above 137 per dollar, facing renewed pressure after the US Federal Reserve offered a more hawkish outlook on its policy. The yen clearly depreciated after the Fed meeting. However, it may fall as the Bank of Japan meeting approaches early next week (19-20/12) AUD/USD The Australian dollar fell sharply to around $0.67, facing renewed pressure as major central banks presented a more hawkish monetary policy outlook than markets anticipated, adding to fears of a potential recession next year. In the European session, it will fall even more and is below $0.67. Moreover, the latest data showed that consumer inflation expectations in Australia hit a seven-month low in December, while the country's unemployment rate remained at 3.4% in November. Investors also reacted to data showing that Australian private sector activity contracted for the third straight month in December. Source: investing.com The RBA has now raised the cash rate for eight consecutive months and said it expects further tightening to bring down inflation. Source: finance.yahoo.com, investing.com, dailyfx.com

It was the most important week in 2022. Fed President Jerome Powell and ECB President Christine Lagarde reminded the markets that they are still committed to fighting inflation, rather than focusing on promoting economic growth. EUR/USD The pair ended the week at 1.0574, thus trading below $1.06. The close is similar to earlier this week, with the pair also trading above $1.05. Also on Monday it recorded a low of 1.0511. This week the most important event in the euro zone was the ECB's decision on interest rates. The central bank of the European Union made the same decision as the Fed and the Bank of England, i.e. it raised interest rates by 50 bp. But it was the president of the ECB who gave the euro strength. And on Thursday, after a hawkish statement, it reached its highest level of the week, hadel was close to 1.07 (1.0691 to be exact). A number of significant events took place in the European Union this week. The ECB meeting was adjourned; the remaining data must be resolved. Despite traders' expectations for a fall of 1.5-2.5%, industrial production fell by 2% in October. Instead of an increase of 10%, exactly as indicated by the first estimates of the index, inflation rose in November by 10.1%. The economic activity index in the manufacturing sector increased to 47.8, and in the services sector to 49.1. However, both indicators are still below the 50.0 threshold, so they cannot be considered positive at the same time. This week's macroeconomic reports from the EU seem to be disappointing. This problem has been around for a long time. In general, the euro continues to grow unreasonably, although it has already reached its peak. GBP/USD The GBP/USD pair started the week of December 12-16 at 1.2266. Then after the US data inflation traded between 1.2243-1.2300. The lowest level, similarly to the euro, was recorded by the cable pair at the beginning of the week, the lowest traded at 1.2217, and the highest at 1.2248 this week. The pair ended the week below $1.22 as fears of a recession increase. Overall, the British pound looks set to end the week under strong pressure against the US dollar, with weak economic data on Friday fueling fears of a recession in the national economy. Thursday's Bank of England rate hike of 0.5 percentage point pushed base rates to highs not seen since 2008 (3.5%).Markets interpreted the move as a dovish interest rate hike. The recent decision of the Bank of England revealed a three-way split of votes: six out of nine MPC members voted for a 50 bp rate hike, two members voted for no change, and the last member voted for another 75 bp rate hike. Recession fears are intensifying with prospects for the UK to be in recession for "an extended period" while inflation is expected to remain very high in the short term before falling sharply from mid-2023. Overall, the short-term outlook for the economy in the UK remain negative, which is starting to show in sterling now. AUD/USD The Aussie Pair started the week at 0.6780. The movements of the pair were similar to EUR/USD and GBP/USD. The pair recorded the lowest trade at 0.6678 and the highest at 0.6892. Ending the week at 0.6686. The Australian dollar was weakened last week after the US dollar posted an incredible rally amid growing fears of a recession. The Federal Reserve raised the interest rate by 50 basis points to a target of 4.25% - 4.50% on Wednesday. Read next: Assistance In Making Investment Decisions - Technical Analysis| FXMAG.COM Australia's unemployment rate remains at a multi-generational low of 3.4% after adding 64,000 jobs. jobs in November. This is in addition to the growing trade surplus from the previous week. The rest of the fundamental picture is a little mixed towards the end of the year, when building permits and retail sales data are disappointing. These figures appear to have been influenced by RBA interest rate hikes. USD/JPY USD/JPY started the week trading at 136.6790. The week's high is 138.15 and the low is 134.71. As you can see, the trade was very diverse and the price fluctuated rapidly. The pair ended the week at 136.69 Source: finance.yahoo.com, dailyfx.com, investing.com

AUD/USD struggles to defend bulls during the first positive day in three. Risk appetite remains mixed as hopes of more stimulus from China, Covid woes test sentient amid light calendar. Hopes of Australia-China diplomatic ties also underpin AUD/USD rebound. Reserve Bank of Australia Meeting Minutes, Federal Reserve’s preferred inflation data will be crucial for Australian Dollar traders. AUD/USD seesaws around the 0.6700 round figure as a short-term moving average defends the Australia Dollar buyers during early Monday morning in Europe. In doing so, the Aussie pair portrays the cautious optimism in the market amid sluggish moves and a light calendar. However, broad US Dollar weakness allows the pair buyers to cheer the first daily gains in three. China-linked news favor AUD/USD buyers. Be it a likely restoration of the Aussie-Sino ties or China’s readiness for more stimulus, AUD/USD has reasons to defend the latest recovery moves. In this regard Reuters said, “Australian Foreign Minister Penny Wong will visit China this week, Prime Minister Anthony Albanese said on Monday, signaling an improvement in diplomatic relations between Beijing and Canberra.” The news also stated that China President Xi Jinping and his senior officials on Friday pledged to shore up China's battered economy next year by stepping up policy adjustments to ensure key targets are hit. Alternatively, doubts over China’s economic growth and the reliability of the latest easing in Covid policy seem to challenge the AUD/USD pair buyers. It’s worth noting that the People’s Bank of China's (PBOC) defense of easy money policy also keeps the Australia Dollar firmer, due to the strong trade links between Australia and China. US Dollar fails to cheer hawkish Federal Reserve talks US Dollar Index (DXY) picks up bids from intraday low but prints 0.15% daily loss around 104.60 as traders struggle for clear directions. The reason could be linked to the hawkish comments from the US Federal Reserve (Fed) officials and softer US PMIs for December. Federal Reserve Bank of Cleveland President Loretta Mester and New York Federal Reserve President John Williams recently favored higher rates. On the other hand, the US S&P Global Manufacturing PMI dropped to 46.2 from 47.7 in November, as well as the market expectation of 47.7. Further, S&P Global Services PMI declined to 44.4 in December's flash estimate from 46.2 in November and market expectation of 46.8. AUD/USD traders await Reserve Bank of Australia Meeting Minutes, United States Inflation data In its latest monetary policy meeting, the Reserve Bank of Australia (RBA) announced 25 basis points (bps) rate hike and showed readiness for more. However, the RBA Governor Philip Lowe appeared less convinced of the hawkish move and hence the AUD/USD pair traders will pay more attention to confirm the dovish bias over the RBA, which in turn could weigh on the Australian Dollar. On the other hand, the Federal Reserve’s (Fed) preferred version of inflation, namely Friday’s US Core Personal Consumption Expenditures (PCE) - Price Index, expected 4.6% YoY and 5.0% prior, will be important for the AUD/USD pair traders. Should the inflation number appear softer, the US Dollar may have more downside to trace, which in turn could weigh on the Aussie pair. Additionally, Australia’s Mid-Year Economic and Fiscal Outlook will be important as economic fears gain momentum, which if confirmed could weigh on the AUD/USD prices. AUD/USD: Technical analysis AUD/USD bears mark another retreat from the 200-SMA, after an early November rebound from the stated key Simple Moving Average (SMA). Not only the U-turn from the 200-SMA, around 0.6680 by the press time, but an impending bull cross on the Moving Average Convergence and Divergence (MACD) indicator also keeps the AUD/USD pair buyers hopeful. However, a successful run-up beyond the previous weekly start of around 0.6730 appears necessary for the Australia Dollar buyers. Following that, a one-week-old horizontal hurdle surrounding 0.6815 appears as the last defense of the AUD/USD pair bears, a break of which could propel the quote towards a convergence of the five-week-old ascending trend line and the monthly top, close to the 0.6900 round figure. On the flip side, a break of the 200-SMA level surrounding 0.6680 could fetch the Australia Dollar towards the late November swing low near 0.6585. In a case where the AUD/USD bears break the 0.6585 support, the November 08 peak of 0.6551 appears the key challenge before activating a south run towards the previous monthly low near 0.6272. AUD/USD: Four-hour chart Trend: Recovery expected

Volatility has been extremely high for financial markets last week due to the Fed, Bank of England and ECB meetings and the release of economic data. All of them caused sell-offs in risky assets, primarily because nothing new has happened and nothing substantial has been said. The ECB and the Fed raised interest rates as expected, while the latest statistics were in line with expectations. Most central banks also noted that tight monetary policy will continue in 2023. Basically, last week's events have brought back the expectations that a widespread recession could start as early as next year. This led to another stock market crash and a rise of dollar to recent highs. However, the decline is likely just a correction, not a full-scale downward trend as demand could return if market sentiment improves. That could also lead to a weaker dollar and more stable treasury yields during the last two weeks of the year. Forecasts for today: AUD/USD 0.6680 is a key support level in AUD/USD. If market sentiment improves today, the pair could bounce up to 0.6800, then go to 0.6915. USD/JPY Even if USD/JPY is bullish, a rise in risk appetite could prompt the pair to rebound to 138.00.   Relevance up to 06:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330121

The US dollar fell on Monday as improved market sentiment pushed stocks and riskier currencies up. The US Dollar Index (DXY) - which tracks the dollar against a basket of six major currencies - fell 0.2% to 104.580 The euro gained 0.4% to $1.06260 , while sterling strengthened 0.7% to $1.22195. However, both remained lower than their levels before last week's central bank moves. EUR/USD The EUR/USD pair started trading above $1.06 this week. The technical outlook for the euro remains positive and reasonably well supported. The single currency appreciated against the US dollar The latest publication of the German Ifo shows that the sentiment in Europe's largest economy "improved significantly" at the end of the year. The business climate rose to 88.6 from 86.4 in November, breaking the index's six consecutive declines, while the expectations reading hit 83.2, up from 80.2 the previous month. GBP/USD And EUR/GBP GBP/USD generally trades in the range of 1.2170 - 1.2200 during the day. The intraday high was above 1.2240. Currently, the cable pair is trading in the range of 1.2170- 1.2180 The British pound crept back toward the previous week's six-month high against the US dollar on Monday, days after the Bank of England (BoE) raised its benchmark interest rate to its highest level since 2008. The Bank of England made its ninth consecutive interest rate hike on Thursday, raising interest rates by 50 basis points (bps) to 3.5% as the central bank battled double-digit inflation. Read next: Russian Drones Attacked Kyiv Again | Most respondents do not want Musk| FXMAG.COM The euro fell 0.1% against the pound to 86.94 pence. The single currency hit a month-high against the pound sterling on Thursday after decisions by the BoE and the European Central Bank (ECB). ING analysts believe the pound sterling could be vulnerable against the euro, and their target is to move to 89p in the first quarter of 2023. USD/JPY The Japanese yen galloped higher amid illiquid trading conditions on Monday morning on news of a possible change in the Bank of Japan's (BoJ) monetary policy targets. The Bank of Japan currently has a prime interest rate of -0.10% and maintains yield curve control (YCC), setting a range of +/- 0.25% around zero for Japanese government bonds (JGB) for up to 10 years. The BoJ and the People's Bank of China are the only two major central banks with loose monetary policies. Much of the rest of the world is tightening financial conditions to deal with uncomfortably high and volatile inflationary pressures. The BoJ meeting will take place tomorrow, but at this stage the market does not expect any changes. USD/JPY has been in a downtrend since it peaked at 151.95 on the day of the BoJ intervention. At the end of last week, the price moved towards the upper band of the channel but was unable to sustain the move above it. The downtrend may continue to resist, currently at 137.45. Looking at the chart of the pair, you can see the strengthening of the yen against the us dollar. The pair returned to trading around $135 but is now trading above $136, meaning the yen's strength was short. AUD/USD The uplifting Australian dollar is trading slightly higher against the US dollar this Monday. This comes after China announced its intention to stimulate the economy with loose monetary policy and fiscal support. Looking at the chart, it is clear that the beginning of the week for Aussie is strong. Comparing to the close, the can pray increased significantly and is now trading above $0.67. Source: investing.com, dailyfx.com, finance.yahoo.com

In the midst of volatility and participation in the market which is starting to decline ahead of the upcoming Christmas and New Year holidays, AUD/USD seems to be showing a weakening of the rally it is currently undergoing on the daily chart where this can be seen from the appearance of: 1. Ascending Broadening Wedge Pattern. 2. The Appearance of Rising Wedge Pattern, 3. Deviations occur between price movements and the CCI indicator. 4. Price movements that move below the 200-period Moving Average serve as a pretty good dynamic resistance. Based on the four facts above then AUD/USD in the next few days has the potential to depreciate where the 0.6586 level will be the main level to be tested. If this level is successfully broken, the 0.6171 level will be the next target to be tested, but all of this will become invalid if it is on its way to these levels. suddenly AUD/USD resumed strengthening above the 0.6894 level. Relevance up to 02:00 2022-12-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116021

In the midst of volatility and participation in the market which is starting to decline ahead of the upcoming Christmas and New Year holidays, AUD/USD seems to be showing a weakening of the rally it is currently undergoing on the daily chart where this can be seen from the appearance of: 1. Ascending Broadening Wedge Pattern. 2. The Appearance of Rising Wedge Pattern, 3. Deviations occur between price movements and the CCI indicator. 4. Price movements that move below the 200-period Moving Average serve as a pretty good dynamic resistance. Based on the four facts above then AUD/USD in the next few days has the potential to depreciate where the 0.6586 level will be the main level to be tested. If this level is successfully broken, the 0.6171 level will be the next target to be tested, but all of this will become invalid if it is on its way to these levels. suddenly AUD/USD resumed strengthening above the 0.6894 level. Relevance up to 02:00 2022-12-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116021

The Australian dollar spent Monday between the lower limit of the local ascending channel and the resistance level of 0.6730. If the aussie was willing to break out of yesterday's general trend of consolidating world currencies, commodities, which increased slightly in price, did not allow it to do so. This morning, AUD/USD is trying to attack the lower limit of the channel. Going beyond this area will coincide with crossing yesterday's low at 0.6684. The nearest target is the support level of 0.6642. Then 0.6590, which the MACD line is approaching. On the four-hour chart, the price is still conducting a wide range consolidation below 0.6730. The minutes from the Reserve Bank of Australia meeting showed the central bank's intention to suspend the easing cycle at the next meeting in February due to the uncertainty of further economic prospects. Also, the People's Bank of China kept key lending rates unchanged, which kept the Australian currency in the shadow of pessimism. As a result, I expect the bears to win and the price to be at 0.6590 Relevance up to 03:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330230

The US Dollar index retreated following the BoJ policy announcement helping EUR/USD edge higher. Later in the day we have US building permit data which could reignite some bullish behavior in the US dollar. Moreover, forex traders focused on the Japanese yen today, which jumped on key Bank of Japan (BoJ) policy. EUR/USD The EUR/USD pair also gains today, receiving a trade above $1.06. Currently, trading is in the range of 1.0630-1.0640. This morning we heard comments from ECB policymaker Nagel who stated the Central Bank is still a long way from hitting its inflation goal reiterating that the ECB likewise need to be persistent on rates. Yesterday’s upbeat German IFO survey on Business Climate and this morning drop in German PPI, which hit a 9-month low. Improving data coupled with a slightly hawkish ECB turn last week may speak in favor of a continuation of the current EUR/USD rate. At present, the mood remains bullish. Read next: Voluntary Extradition Of Sam Bankman-Fried | The Inflation Reduction Act (IRA) Is A Path To Net Zero| FXMAG.COM USD/JPY USD/JPY dropped sharply today from trading above 137 to below 134. The pair is now trading below 133, 132.6420 to be precise The Japanese Yen launched higher after the Bank of Japan tilted monetary policy at its meeting today. The USD/JPY Pair has raced to a four-month low. The pair tried to break above the upper band of a descending trend last week but was unable to do so. Today’s attempt was also unsuccessful and the BoJ’s announcement aided maintenance of the trend channel. All of this contributed to the couple's sentiment, which is currently bearish. Most BOJ watchers had expected no changes until the current governor Haruhiko Kuroda's 10-year term ends at the end of March. While it kept broad policy settings unchanged he BOJ decided to let long-term yields to move 50 basis points either side of its 0% target, wider than the 25 basis point band previously. The move has had a negative impact on the US dollar and could boost the Yen as Japanese investors are given an incentive to bring money home while increasing the Yens haven appeal. AUD/USD The price of the Aussie pair was above the 0.6725 level at the beginning of the day, but then fell below $0.67. Trading is currently in the range 0.6665- 0.6670 The Australian dollar fell above $0.67 to its lowest level in a month after the Bank of Japan's surprise decision. The Australian was also under pressure as other major central banks offered a more hawkish outlook on policy than markets anticipated, adding to fears of a potential recession next year. Meanwhile, recent minutes from the Reserve Bank of Australia's meeting revealed that policymakers were considering a bigger rate hike of 50 basis points. GBP/USD At the beginning of the day, cable trading was very mixed. The price of the pair traded above $1.22 and then fell all the way down to $1.2088. Currently, the price is stabilizing in the range of 1.2150-1.2175. The overall picture of the pair looks bearish and the price trades mostly above $1.21. The pound posted a slight gain on Tuesday in weak trading ahead of Christmas, but was on track for its biggest quarterly gain against the dollar since 2009. The pound is up 8.8% against the dollar in the last three months of the year, putting it on track for its best quarter in more than 13 years. Goldman Sachs expects the pound to fall to $1.07 in three months and hold at $1.11 in six months. Source: investing.com, dailyfx.com, finance.yahoo.com

AUD/USD gains some positive traction on Wednesday, albeit lacks follow-through. The risk-on impulse benefits the Aussie; a modest USD strength caps the upside. The fundamental backdrop supports prospects for a further depreciating move. The AUD/USD pair struggles to capitalize on its modest intraday gains on Wednesday and faced rejection near the 0.6700 round-figure mark. The pair, however, sticks to a mildly positive bias through the early European session and is currently trading around the 0.6675-0.6680 region, just above the 100-day SMA support. A goodish recovery in the global risk sentiment - as depicted by the upbeat tone around the equity markets - is seen as a key factor lending some support to the perceived riskier Aussie. That said, the emergence of some US Dollar buying keeps a lid on any meaningful upside for the AUD/USD pair and warrants some caution for bullish traders. The USD draws some support from a modest uptick in the US Treasury bond yields, bolstered by the Fed's hawkish outlook. In fact, the US central bank indicated that it will continue to raise rates to crush inflation. Furthermore, the Bank of Japan's policy tweak, which triggered a sell-off in bond markets on Tuesday, act as a tailwind for the US bond yields. Apart from this, worries about rising COVID-19 cases in China contribute to capping gains for the AUD/USD pair. This, along with dovish Reserve Bank of Australia (RBA) minutes released on Tuesday, showing that policymakers considered leaving rates unchanged at the December meeting, suggests that the path of least resistance for spot prices is to the downside. Market participants now look forward to the US economic docket, featuring the release of the Conference Board's Consumer Confidence Index later during the early North American session. Traders will further take cues from the US bond yields and the broader risk sentiment, which will influence the USD price dynamics and provide some impetus to the AUD/USD pair.  

The USD gets some support from a slight increase in US Treasury yields, supported by the Fed's hawkish outlook. In fact, the US central bank has announced that it will continue to raise interest rates to suppress inflation. Moreover, the Bank of Japan's policy modification that sparked a sell-off in bond markets on Tuesday is acting as wind in the sails for US bond yields. Market participants are now awaiting economic data from the United States, including the release of the Consumer Confidence Index. EUR/USD The euro holds its level above $1.06, and today the mood is bearish. The current pair is trading below 1.0620. The US dollar is regaining some positive traction and reversing some of the overnight sharp decline which is seen as a headwind for the EUR/USD pair. Wednesday morning kicked off with German GfK consumer confidence data (see economic calendar below) for January which beat expectations suggestive of a more upbeat outlook for the third consecutive print. With the dollar trading higher today, EUR/USD has managed to utilize this economic data to keep in the green this morning. Read next: Indonesia Has Potential In The Development Of Solar Energy| FXMAG.COM GBP/USD Cable Market price is down today. At the start of the day, GBP/USD traded above 1.2190 and is currently trading at 1.2130. The US Dollar regains some positive traction and turns out to be a key factor acting as a headwind for the GBP/USD pair. On the other hand, the British pound is weakened by the dovish outcome of last week's Bank of England (BoE) meeting. The US Economic Report includes the Conference Board's Consumer Confidence Index, due to be released later during the early North American session. This, along with US bond yields and broader market sentiment for risk, will weigh on USD price dynamics and provide some impetus to GBP/USD. After that, the focus will shift to the publication of final UK GDP figures for Q3. AUD/USD The Aussie Pair trading rebounds below $0.67 today. It is currently above 0.6675. The Aussie and The Kiwi (NZD) are among the most liquid of these carry trades and took the biggest hit when the BOJ badly wrong-footed a very thin market in the week before Christmas. A good recovery in global risk attitudes – indicated by the optimistic tone in equity markets – is seen as a key factor supporting the perception of riskier Australians. That said, the appearance of some US dollar purchases limits any significant gains for the AUD/USD pair. USD/JPY The USD/JPY Pair is currently trading at June levels. Latest data helped Yen with effect on USD/JPY trading level in range 131.73-131.76 The bears of the pair are waiting for a return to the downtrend The currency pair remains vulnerable amid mixed comments from Japanese authorities about the Bank of Japan's surprising policy move The Bank of Japan kept the policy equilibrium rate at -0.10% but adjusted its Yield Curve Control (YCC) by setting a range of +/- 0.50% around zero for Japanese government bonds (JGB) for up to 10 years. Previously, the YCC target was +/- 0.25% around zero. The bond market had been moving into the upper 0.25% band for some time amid speculation that the bank would have to step down at some point in the face of accelerating inflation. BoJ Governor Haruhiko Kuroda remained steadfast in preparations for yesterday's meeting that the policy would be resolutely upheld. Source: investing.com, dailyfx.com, finance.yahoo.com

Yesterday, the Australian dollar reached the target support at 0.6642 and is now trying to rise above resistance at 0.6730. Once it settles above this level, it can continue rising to the nearest resistance at 0.6799. In this case, the Marlin oscillator will be in the positive area (above the zero line) and after reaching 0.6799, AUD will be able to take off in the range of 0.6894-0.6917. But it is currently too early to speak about growth, maybe the price will go under 0.6730, because Marlin is quite stable in the negative territory. The key level for the short-term downtrend is 0.6590. The MACD line is close to it, and from this level we will find out whether the price reversal will be a medium-term growth, or if we will see a medium-term decline when the price crosses the supports. On the four-hour chart, the price moved above the MACD line, the Marlin oscillator in a strong rising position. This is the first signal of the continuation of the local growth to the nearest level of 0.6799 (November 15 high). Relevance up to 03:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330470

AUD/USD seesaws around intraday high, as well as the weekly top, on mixed concerns. Aussie analysts predict slowdown in spending, China’s budget deficit hit record high during January-November period. US data, yields eyed for fresh impulse amid holiday mood. AUD/USD grinds near an intraday high of 0.6765 heading into Thursday’s European session. In doing so, the Aussie pair seesaws near the weekly top amid mixed news surrounding Australia and China, while cheering the US Dollar’s pullback on softer Treasury bond yields. That said, analysts from the Australia and New Zealand Group (ANZ) highlight fears of a slowdown in Aussie spending and challenge the AUD/USD bulls. “Total ANZ-observed spending from 20 Nov – 18 Dec was just 10% higher than in 2019, despite a CPI increase of 10.5% between Dec 2019 and Sep 2022 and population growth of 1.8% from Dec 2019 to Jun 2022,” said the latest report. It should be noted that the news suggesting China’s biggest budget deficit on record also probes the AUD/USD buyers. That said, China’s budget deficit hit a record high for the first 11 months of 2022 and weigh on the AUD/USD prices. On the other hand, Bloomberg cites China’s State Council and the People’s Bank of China (PBOC) to hint at more positives for the dragon nation. “China’s State Council, People’s Bank of China (PBoC) and the country’s top securities regulator jointly conducted a study during last week’s economic policy meeting, aiming to prioritize growth and boost the property market in 2023,” reported Bloomberg. Also likely to propel the AUD/USD prices could be the downbeat US Treasury yields and the softer US Dollar, amid a lack of major data/events and due to the Bank of Japan’s (BOJ) efforts. That said, the US 10-year Treasury yields remain depressed around 3.65%, extending the previous day’s pullback from the monthly high while the US Dollar Index (DXY) prints mild losses near 103.90 at the latest. Looking forward, final prints of the US Gross Domestic Product (GDP) and Core Personal Consumption Expenditure (PCE) details for the third quarter (Q3) could entertain traders ahead of Friday’s US Core PCE Price Index for November, also known as the Fed’s preferred inflation gauge. That said, the US GDP is expected to confirm 2.9% Annualized growth in Q3 while the Core PCE is anticipated to also meet the initial forecasts of 4.6% QoQ during the stated period. Technical analysis A clear upside break of the 0.6730 resistance confluence, including the convergence of the 200-Exponential Moving Average (EMA) and a two-day-old descending resistance line, keeps AUD/USD bulls hopeful of piercing the downward-sloping resistance line from December 13, close to 0.6785 by the press time.    

The US Dollar is weaker today as markets appear to be restoring their signal ahead of next week's holiday. Chinese words about stimulating economic growth strengthened risk sentyment. The Australian Dollar is the biggest gainer today as the generally more optimistic sentiment towards risky assets helped to bolster it. Later in the day, the focus will be on US GDP, which is expected to improve for the third time in a row, revealing a downside risk for the EUR/USD pair. In addition, central banks must balance the need to fight inflation with the risk of further deepening of the economic slowdown. EUR/USD EUR/USD keeps trading above 1.06 for another day. For a significant part of the day, the pair traded in the range of 1.0630-1.0660. It is currently trading below 1.0630, 1.0622 to be precise The euro has a strong start to Thursday's European session with the dollar weakening. In addition, de Guindos of the European Central Bank (ECB) upheld the hawkish narrative, stating that "50 basis points may soon become the new standard" to quell rising inflationary pressures in the eurozone. GBP/USD The cable pair dropped to 1.2040. The British pound traded around $1.21, down slightly from its recent six-month high of $1.2446 as investors weighed less hawkish BoE and economic outlook. Analysts mainly see the risk of the pound falling between now and the end of the year as the UK economy is stuck in stagflation conditions. The outlook for the UK is still pretty bleak. The UK economy contracted slightly more than originally estimated in the third quarter and business investment performed poorly, the Office for National Statistics said on Thursday. Household spending and business investment fell significantly, boosting expectations that the British economy was heading into recession. Most services sub-sectors experienced a slowdown, however, services output increased by 0.1% in Q3 2022, revised upwards from the first estimate of solid output. Compared to pre-coronavirus (COVID-19) levels, service output is now 1.3% lower than in Q4 (October-December) 2019. Read next: Credit Suisse Sold Building In Geneva | Visa Is Building Success At The Expense Of Small Retailers| FXMAG.COM USD/JPY USD/JPY dropped from 137.50 to 130.50 in no time. It has since stabilized. USD/JPY in the Asian session fell to around 131.70, in the European session the pair rose above 132.10. The yen firmed on Thursday, returning towards a four-month peak against the dollar hit this week after an unexpected tweak to the Bank of Japan's bond yield controls spurred bullish yen bets. Japan is the largest holder of government bonds and once again, if domestic yields move north, the world's largest debt market could be affected. The bank's new CEO is due to be appointed in April 2023, and there is a perception that he could pave the way for the new leader to tighten policy in the face of accelerating inflation. The yen is used as a funding currency by some investors, and the rise in Japanese yields changes the price dynamics for these participants. AUD/USD Yesterday, at the end of the day, the exchange rate was below $0.67, but closer to midnight it started to increase. The new day will start with an increase in the Aussie pair. It peaked at 0.6769, then you start to fall. Trading is at 0.6726 The sentiment-linked Australian dollar outperformed its major counterparts on Wednesday, benefiting from a cautious improvement in risk appetite. The aussie also benefited from a general weakness in the US dollar, as well as hopes for more pro-growth policy measures in China. Earlier in December, the Reserve Bank of Australia raised its policy rate by 25 basis points to 3.1%, taking borrowing costs to a level not seen in a decade. Source: dailyfx.com, investing.com, finance.yahoo.com

AUD/USD regains some positive traction on Friday amid a modest USD weakness. A positive risk tone undermines the buck and benefits the risk-sensitive Aussie. Hawkish Fed expectations, rising US bond yields should limit deeper USD losses. Traders might also prefer to wait for the US PCE data before placing fresh bets. The AUD/USD pair attracts fresh buying near the 100-day SMA on Friday and stalls the previous day's retracement slide from a one-week high. The pair sticks to its intraday gains through the early European session and is currently placed near the daily high, just below the 0.6700 mark. A modest recovery in the US equity futures prompts some selling around the safe-haven US Dollar, which, in turn, is seen lending some support to the AUD/USD pair. That said, worries about economic headwinds stemming from a surge in new COVID-19 cases in China should keep a lid on any optimism in the markets and the risk-sensitive Aussie. Apart from this, renewed fears that the Fed will retain its hawkish stance to tame inflation should limit the USD losses and contribute to capping the major. Against the backdrop of a more hawkish commentary by the Fed last week, the upbeat US economic data released on Thursday revived bets for a more aggressive policy tightening by the US central bank. In fact, the US GDP growth for the third quarter showed that the economy expanded by 3.2%, faster than the 2.9% estimated. Moreover, the Initial Weekly Jobless Claims increased less than expected during the week ended December 17, pointing to a still-tight labour market and resilient US economy. This, in turn, continues to push the US Treasury bond yields higher and supports prospects for the emergence of some dip-buying around the USD. Traders might also prefer to wait on the sidelines ahead of Friday's release of the US Core PCE Price Index - the Fed's preferred inflation gauge, due later during the early North American session. Hence, it will be prudent to wait for strong follow-through buying before positioning for any further intraday appreciating move for the AUD/USD pair.

The dollar fluctuated on Friday and was little changed in morning trading in London after two days of gains, as investors weighed up the outlook for interest rates following the release of stronger than expected U.S. economic data on Thursday. The dollar index has dropped more than 8% since hitting a 20-year high in September, with a sharp slowdown in U.S. inflation raising hopes that the Fed may soon end its tightening cycle. A second report said the U.S. economy rebounded in the third quarter at a pace faster than previously estimated. In today's economic calendar, the focus is solely on US economic data. EUR/USD The euro was up slightly against the dollar, standing 0.1% higher at $1.061, after slipping less than 0.1% on Thursday. The pair traded low yesterday around 1.06, sometimes falling below this level. Today, the pair is recovering and trading above 1.06 again, mainly in the 1.0610-1.0620 range GBP/USD The cable pair is trading around 1.20. It is now up and trading close to $1.21, 1.2070 to be exact. Yesterday, the price of the pair fell even below 1.20, today it is recovering, similarly to the euro pair. It grows especially during the European session. Yesterday’s UK GDP brought about the first quarter of negative growth for the UK economy in 2022. In addition, strike action in the UK, dishing household income in the midst of elevated inflation makes conditions tough for the Bank of England (BoE) but may likely end rate hikes sooner than the Federal Reserve. Read next: Migration Of Sports From Traditional Television To Streaming Is Chugging Ahead- The NFL Sunday Ticket On YouTube| FXMAG.COM USD/JPY USD/JPY holds trade above 132. And like the other major currency pairs, it is trading much higher today than it did at the end of yesterday. The Japanese yen was down 0.2% at 132.62 to the dollar. Yet the Japanese currency was on track for a weekly gain of around 3% after the Bank of Japan (BOJ) tweaked a key bond market policy earlier this week. Former deputy finance minister Eisuke Sakakibara said in an interview with Bloomberg that he sees USD/JPY could rise to 120. Earlier this year, he said USD/JPY could rise to 150. In October it was just over 152, its highest level since 1990. And maybe this time his predictions will come true. He also believes the BoJ may raise the yield curve control limit at the January meeting. Further tightening of monetary policy by the BoJ may not be what some market participants expect, and further hawkish attitude may come as a surprise. The Japanese yen is a little confused after CPI figures bring pressure on building prices for the country's archipelago. The headline CPI was the highest in 30 years and by the end of November amounted to 3.8% yoy. It was below expectations at 3.9%, but above standard at 3.7%. AUD/USD The Australian pair traded below $0.67 yesterday. Today she tried to cross that level again. I managed to get over it for a while. Currently, the pair is below $0.67, 0.6696 to be exact. The Australian dollar traded below $0.67 facing renewed pressure as better-than-expected US data bolstered the case for further monetary tightening from the Federal Reserve. Meanwhile, a recent rise in local bond yields has saved the Australian from further losses as an unexpected hawkish turn from the Bank of Japan fueled expectations that Japanese investors could shed Australian debt to bring some funds back home. Source: dailyfx.com, investing.com, finance.yahoo.com

The dollar weakened against most currencies in uncertain, weak trading on Friday as data signaled the US economy was cooling down somewhat, bolstering expectations of smaller interest rate hikes by the Federal Reserve and improving investors' appetite for risk. Excluding the volatile food and energy components, the PCE index gained 0.2% after rising 0.3% in October. The so-called core PCE price index rose 4.7% year-on-year in November, following a 5.0% increase in October. The Fed tracks PCE price indices for its monetary policy. The Fed is widely expected to raise interest rates by just 25 basis points at its next policy meeting in January, after a series of big hikes. USD/JPY The Jena/Dollar pair enjoyed a high level only on Monday, i.e. before the Bank Of Japan meeting. The pair's trade on this day was the highest of the week, with the day's highest trade reaching 137.4430. On Tuesday, the day of the Bank of Japan meeting, the pair dropped drastically and traded below 133. It also hit a low on that day, trading at 130.68. USD/JPY traded in the 132-133 range for most of the week. It closed the week at 132.8720. Against the yen, the dollar rose 0.4% to 132.82 yen. The dollar, however, was on track for a weekly drop of 2.8% after the Bank of Japan (BOJ) revised a key bond market policy earlier this week. In a surprise move, the Bank of Japan adjusted its yield curve control strategy this week, broadening the range where long-term Japanese yields are allowed to trade. Governor Kuroda downplayed the action as a mere "fine-tuning" of policy to ensure the smooth functioning of the domestic bond market, insisting that it was not really a tightening. Markets now expect the BoJ to leave negative rates by April, pricing in a 15bps rate hike that will bring rates back above zero. Then the new governor of the BoJ will take over, so investors are basically betting that the change of leadership will usher in a new era of monetary tightening in Japan. EUR/USD EUR/USD traded mixed. The weekly range was very wide 1.0580-1.0660. The highest level was recorded at the upper end of the weekly range, 1.0660, and the lowest level was read on Thursday and it was lower than the 1.0578 range. In terms of projected fundamental event risk until the end of 2022, last Friday's PCE deflator was arguably the last significant release. The Fed's preferred inflation reading fell from 6.1 to 5.5, while the core reading was in line with expectations, falling from 5.0 to 4.7 percent. GBP/USD Contrary to EUR/USD, the cable pair has been falling day by day this week. It peaked at the beginning of the week trading above 1.22, 1.2241 to be exact. The lowest level was below 1.20. GBP/USD's weekly low was at 1,996. These declines were significantly affected by the publication of UK GDP. Revised figures show the UK economy contracted more than initially thought in the three months leading up to September. The economy shrank by 0.3%, down from the previous estimate of 0.2%, as business investment performed worse than initially thought. Growth figures for the first half of 2022 have also been revised downwards. The UK is expected to fall into recession in the final three months of the year as soaring prices hit growth. AUD/USD The currencies of Australia, New Zealand and Canada strengthened against the US dollar. The Australian unit rose 0.4% to $0.6710 The Aussie pair mostly traded in the 0.6650-06750 range this week. It peaked on Thursday, with the pair trading high at 0.6768, while the week's low was well below the weekly range. The low of the week is 0.6638. The Australian will close the week at 0.6720. The main drivers were Chinese optimism about stimulating economic growth in 2023, as well as fluctuations in the USD based on US economic data. Markets may be a bit overreacting to global risk sentiment given the worsening COVID situation in China, which could put the Australian dollar at risk for further weakness in the coming week as well as in the first quarter of 2023. Source: investing.com, finance.yahoo.com

AUD/USD retreats from intraday high but stays positive for the second consecutive day. China Industrial Profits drop 3.6% during January-November period, easing Covid restrictions keep sentiment positive. Mixed US data weighs on hawkish Fed bets, US Dollar during holiday-thinned markets. AUD/USD pares intraday gains around 0.6750 during Tuesday’s sluggish morning in Europe. In doing so, the Aussie pair takes clues from the recently flashed downbeat China data. However, cautious optimism in the market joins the receding hawkish bias from the Federal Reserve (Fed) to keep the pair buyers hopeful. China’s Industrial Profits dropped 3.6% during the January-November period versus -3.0% prior. It’s worth noting, however, that the People’s Bank of China’s (PBOC) heavy liquidity injections keep the market sentiment firmer despite the downbeat data. That said, the Chinese central bank injected the most funds in two months during the last week. On a broader front, China scrapped the COVID quarantine rule for inbound travelers starting from January 08. The nation’s National Health Commission also mentioned “China's management of COVID-19 will also be downgraded to the less strict Category B from the current top-level Category A.” The news joined geopolitical fears emanating from Russia and North Korea to portray cautious optimism in the market. As a result, S&P 500 Futures rise 0.60% intraday to 3,892 whereas the US 10-year Treasury yields remain sluggish at around 3.74% by the press time. Other than the risk-positive catalysts from China, softer US data also helps AUD/USD to remain on the buyer’s radar. US Core Personal Consumption Expenditures (PCE) Price Index, mostly known as the Fed’s favorite inflation gauge, matched 4.7% YoY forecasts for November versus 5.0% prior. Further, the Durable Goods Orders for the said month marked a contraction of 2.1% compared to -0.6% expected and 0.7% previous readings. More importantly, the Nondefense Capital Goods Orders ex Aircraft marked improvement of 0.2% compared to 0.0% expected and 0.3% revised down prior. Additionally, the Federal Reserve (Fed) Bank of Atlanta’s GDPNow tracker rose to show +3.7% annualized growth for the fourth quarter (Q4) versus +2.7% previous estimates. Alternatively, geopolitical fears emanating from Russia and North Korea challenge the Aussie pair buyers amid the year-end inaction in the markets. Amid these plays, S&P 500 Futures rise 0.75% intraday to 3,898 whereas the US 10-year Treasury yields retreat to 3.73% at the latest. Given the market’s consolidation of intraday gains and the lack of major data/events ahead of Friday’s China PMIs, the pair traders should look for the qualitative catalyst for clear directions. Technical analysis Although the 100-DMA restricts short-term AUD/USD downside near 0.6650, a daily closing beyond the 21-DMA hurdle surrounding 0.6740 becomes necessary for the bulls to keep the reins.

Data released by the US Bureau of Economic Analysis on Friday revealed that the Core Personal Consumption Expenditure (PCE) price index rose 0.2% m/m in November. The annual core PCE price index, the Fed's preferred measure of inflation, fell to 4.7% over the same period from 5% in October. Ahead of the Christmas break, Wall Street's major indices posted gains on Friday and failed to find demand for the US dollar. China has said it will lift quarantine requirements for incoming visitors, further easing three years of border controls to contain COVID-19. China's reopening, which also entails a resumption of Chinese tourist outbound trips, will boost the consumer and service sectors outside the country, particularly in nearby Southeast Asia. As a result, the dollar weakened significantly on Tuesday as most emerging Asian currencies strengthened and risk appetite. Currencies in New Zealand and Australia also rose. It is too early to tell how China's reopening will affect global economic activity, but there appears to have been a positive shift in risk sentiment after the three-day weekend. Attention will also focus on the US economic report, which will include the October housing price index and November data on the balance of trade in goods. Investors, however, are likely to ignore these numbers and focus on risk perception. USD/JPY The yen's strength didn't last long and I'm already seeing a slight increase in USD/JPY today. Today, USD/JPY is back to trading above 133. The pair is trading around 133.30. The weakness of the pair, however, does not excuse the recent mixed data from the US and Japan, let alone comments trying to challenge the political hawks at the Bank of Japan (BOJ). That said, Japan's unemployment rate fell to 3.5% in November from 3.6% previously expected, while the jobs/apprentices ratio again printed 1.35 in the month in question compared to 1.33 market forecasts. Moreover, retail trade growth fell to 2.6%YoY against 2.8% of market consensus and 4.4% previously revised upwards. EUR/USD In recent days, the currency pair has been trading in a short range between $1.0580 and $1.0650. Currently, it is trading slightly above this range, signaling an uptrend. EUR/USD has continued its move higher. The pair is taking advantage of US dollar weakness extensively as risk flows dominate further moves to reopen China. Taking advantage of the weakness of the US currency, the EUR/USD pair is up today and is trading around 1.0650, mostly just above that level. Today's high level so far has been 1.0671.   GBP/USD GBP/USD lost its bullish momentum after encountering resistance near 1.2100 early in the European session on Tuesday. GBP/USD drops towards 1.2050 on light trading as UK markets are closed for Christmas. The pair is downplaying the risk sentiment surrounding China that is weakening the US dollar. China announced earlier in the day that it would lift quarantine requirements for travelers from January 8 as part of its reopening efforts. Over the weekend, Chinese officials said they would stop publishing daily revisions to the number of confirmed coronavirus cases. It is worth noting that the valuation of the US dollar through risk perception should continue to drive the pair's actions. Today, the situation of the cable pair is downside with the current trade at 1.2036. AUD/USD The Aussie trades in a strong tone on Tuesday, supported by positive market sentiment. The pair is rising for the third day in a row, extending its rebound from 0.6650. It is currently trading at 0.6737. Source: investing.com,  finance.yahoo.com Data released by the US Bureau of Economic Analysis on Friday revealed that the Core Personal Consumption Expenditure (PCE) price index rose 0.2% m/m in November. The annual core PCE price index, the Fed's preferred measure of inflation, fell to 4.7% over the same period from 5% in October. Ahead of the Christmas break, Wall Street's major indices posted gains on Friday and failed to find demand for the US dollar. China has said it will lift quarantine requirements for incoming visitors, further easing three years of border controls to contain COVID-19. China's reopening, which also entails a resumption of Chinese tourist outbound trips, will boost the consumer and service sectors outside the country, particularly in nearby Southeast Asia. As a result, the dollar weakened significantly on Tuesday as most emerging Asian currencies strengthened and risk appetite. Currencies in New Zealand and Australia also rose. It is too early to tell how China's reopening will affect global economic activity, but there appears to have been a positive shift in risk sentiment after the three-day weekend. Attention will also focus on the US economic report, which will include the October housing price index and November data on the balance of trade in goods. Investors, however, are likely to ignore these numbers and focus on risk perception. USD/JPY The yen's strength didn't last long and I'm already seeing a slight increase in USD/JPY today. Today, USD/JPY is back to trading above 133. The pair is trading around 133.30. The weakness of the pair, however, does not excuse the recent mixed data from the US and Japan, let alone comments trying to challenge the political hawks at the Bank of Japan (BOJ). That said, Japan's unemployment rate fell to 3.5% in November from 3.6% previously expected, while the jobs/apprentices ratio again printed 1.35 in the month in question compared to 1.33 market forecasts. Moreover, retail trade growth fell to 2.6%YoY against 2.8% of market consensus and 4.4% previously revised upwards. EUR/USD In recent days, the currency pair has been trading in a short range between $1.0580 and $1.0650. Currently, it is trading slightly above this range, signaling an uptrend. EUR/USD has continued its move higher. The pair is taking advantage of US dollar weakness extensively as risk flows dominate further moves to reopen China. Taking advantage of the weakness of the US currency, the EUR/USD pair is up today and is trading around 1.0650, mostly just above that level. Today's high level so far has been 1.0671.   Read next:Shopping On Etsy Continues To Be Popular| FXMAG.COM GBP/USD GBP/USD lost its bullish momentum after encountering resistance near 1.2100 early in the European session on Tuesday. GBP/USD drops towards 1.2050 on light trading as UK markets are closed for Christmas. The pair is downplaying the risk sentiment surrounding China that is weakening the US dollar. China announced earlier in the day that it would lift quarantine requirements for travelers from January 8 as part of its reopening efforts. Over the weekend, Chinese officials said they would stop publishing daily revisions to the number of confirmed coronavirus cases. It is worth noting that the valuation of the US dollar through risk perception should continue to drive the pair's actions. Today, the situation of the cable pair is downside with the current trade at 1.2036. AUD/USD The Aussie trades in a strong tone on Tuesday, supported by positive market sentiment. The pair is rising for the third day in a row, extending its rebound from 0.6650. It is currently trading at 0.6737. Source: investing.com,  finance.yahoo.com

AUD/USD picks up bids to refresh intraday high after confirming a bullish moving average crossover. Two-week-long downward-sloping resistance line challenges short-term upside moves. MACD signals suggest further upside, rising trend line from December 16 adds to the upside filters. AUD/USD renews intraday high around 0.6755 while reversing the previous day’s pullback from the two-week top amid the initial European session on Wednesday. In doing so, the Aussie pair justifies the bullish moving average crossover amid sluggish days of trading due to the year-end holiday mood in the West. That said, the 50-HMA pierced the 200-HMA from below and portrayed the “Golden Cross” the previous day. The MACD also justifies the bullish signals from the Hourly Moving Averages (HMAs). As a result, the quote is up for challenging a two-week-old resistance line near 0.6765. However, another trend line resistance from December 16, close to 0.6780, adds filters to the AUD/USD upside. In a case where the Aussie pair remains firmer past 0.6780, the 0.6800 round figure and 0.6820 hurdle may probe the bulls before directing them towards the monthly high near 0.6895. On the flip side, the 50-HMA level near 0.6730 restricts short-term AUD/USD downside ahead of the 200-HMA support, close to 0.6715 at the latest. Following that, an ascending trend line from the last Tuesday, near 0.6680 by the press time, could act as the last defense of the AUD/USD bulls, a break of which could quickly drag the quote towards the monthly low surrounding 0.6630. AUD/USD: Hourly chart Trend: Limited upside expected

Data on the US housing market will be in the spotlight, and with the housing recession dominating recent headlines, these indicators will provide important information on the health of the US housing market. What's more, the optimism around China and the easing of Covid protocols has dimmed a bit since yesterday after rumors that the US may impose new restrictions on travelers from China. This is because US officials are concerned about the lack of "transparent" data coming from Beijing. USD/JPY The dollar gained against the yen by as much as 0.67% to 134.40 In the morning of the Asian session, the USD/JPY pair rose above the 134 level. This level did not last long and the pair returned to trading at 133. In Asian trade, the highest since December 20, when the BOJ caused the pair to fall sharply as a result of an unexpected loosening of the yield band on 10-year Japanese government bonds. On that day, the yen posted its biggest one-day gain against the dollar in 24 years, closing 3.8% higher on the day as traders speculated on an eventual withdrawal of the stimulus. Now, the yen has also come under pressure after the Bank of Japan signaled last week's surprise policy change did not mark the beginning of a broader withdrawal of monetary stimulus. BJ Governor Haruhiko Kuroda said that "The Bank will pursue the target price in a sustainable and stable manner, accompanied by wage increases, by further easing monetary policy under the control of the yield curve." Meanwhile, Kuroda expressed hope that ongoing labor shortages would encourage companies to raise wages, and said conditions in the Japanese labor market were expected to tighten further. GBP/USD The situation on the cable market has improved. The pair in today's trading was on the rise. Currently, the pair is approaching the level of 1.21. EUR/USD EUR/USD is trading above 1.0630 today. It is currently maintaining its high level above 1.0650. Maintaining support for EUR/USD has recently been more hawkish rhetoric from the European Central Bank (ECB) compared to the US Federal Reserve (FED). ECB policymaker Klaas Knot reiterated this in an interview yesterday, stating that between now and July 2023 it would provide “a pretty decent rate of tightening. Fudge warned that doing too little remains a greater risk with a slowdown to 50 basis points, giving the central bank time to assess the impact of rate hikes. In the rare positive nexus that has been talked about, the worst may already be behind the Eurozone, and the potential recession, if it does occur, will be relatively shallow and short-lived. AUD/USD The Aussie pair is in an uptrend on the daily chart. AUD/USD is trading close to 0.68. The gains were short-lived and the Australian currency is now facing resistance. Australian and New Zealand dollars fluctuated on Wednesday as initial optimism from China, which reopened its borders after three years, gave way to greater volatility over global growth prospects. Australian government bond yields rose as markets reopened after Christmas, catching up with their overseas counterparts. Source: finance.yahoo.com, investing.com, dailyfx.com

AUD/USD prints heaviest intraday gains since Friday despite recent inaction. Bullish chart formation, sustained trading beyond 0.6700 support confluence favor buyers. Multiple hurdles stand tall to test upside momentum. AUD/USD reflects the market’s holiday mood as it treads water around 0.6750 despite posting the biggest daily gains in nearly a week during early Thursday. In doing so, the Aussie pair seesaws inside a one-week-old ascending trend channel amid sluggish oscillators. Other than the channel formation and sluggish RSI, as well as MACD, the quote’s successful trading beyond the 0.6700 support confluence also keeps buyers hopeful. However, 23.6% Fibonacci retracement level of the pair’s November 10 to December 13 upside, near 0.6775, guards the quote’s immediate upside. Following that, the aforementioned channel’s upper line, around 0.6805 at the latest, could challenge the AUD/USD bulls. In a case where the Aussie buyers cross the 0.6805 hurdle, multiple levels around 0.6820 and 0.6850 could probe the advances before highlighting the monthly peak of 0.6893 and the 0.6900 round figure. On the flip side, pullback moves remain elusive unless the quote stays beyond the 0.6700 key support comprising the 200-Exponential Moving Average (EMA) and bottom line of the stated channel. Should that happen, a quick fall to the monthly low marked in the last week around 0.6630 can’t be ruled out. Though, the 61.8% Fibonacci retracement level around 0.6580, also known as the “Golden Ratio”, appears a tough nut to crack for the AUD/USD bears. AUD/USD: Four-hour chart Trend: Bullish

The dollar weakens on Thursday after gaining in the previous session, and investors were nervous towards the end of the year as initial optimism about China reopening has faded. China's reopening was initially met with applause in global markets, giving a boost to the commodity complex and risk assets in general, however, the rising number of COVID cases flooded local Chinese hospitals, adding to the level of concern for a positive reopening. What's more, the Asian stock market is also influenced by information from China. Asian stocks weakened slightly on Thursday as soaring COVID cases in China alarmed investors and cast doubt on the chances of a quick recovery for the world's second-largest economy after the easing of stringent COVID-related restrictions. From the USD's perspective, labor market data is scheduled for later today. Weekly initial jobless claims will be the only data appearing in the US economic report. Although expectations are slightly weaker than the previous reading, if the actual data is in line with these forecasts, the impact on the dollar breakout should be minimal given the minor changes. USD/JPY The Bank of Japan announced an unplanned bond purchase operation for the second time during the day, trying to limit yields. The Central Bank offered purchases of unlimited amounts of 2- and 5-year bills and a daily offer to buy 10-year debt at 0.5%. The BoJ faces an increasing challenge as it plans to increase its planned bond purchases in Q1 2023 by 23%. Although yesterday during the US session USD/JPY exceeded 134, today it is trading well below 133.80. Read next: The First Technical Problems Of Twitter Under The Leadership Of Elon Musk, Tesla Shares Worst Of The Year| FXMAG.COM AUD/USD The uplifting Australian dollar has danced to the rhythm of global factors recently. The Australian and New Zealand dollars struggled to recover on Thursday after failing to sustain overnight gains as concerns over the global interest rate outlook outweighed optimism over China easing COVID-19 restrictions. Faced with a scarcity of major market catalysts, the Australian pair (AUD/USD) lay flat. Thus, the Aussie failed to break the resistance at around 68. Today, the pair is trading above 0.6710 The futures market now suggests the Reserve Bank of Australia may be more aggressive than previously thought as traders price in a higher peak of around 4% by September next year, down from 3.6% just a week ago. They also suspect the RBA will not cut rates until 2024. EUR/USD The EUR/USD pair traded mostly in the range of 1.0620-1.0630 in the morning, sometimes falling below the lower limit. Currently, the pair is trading around 1.0640. EUR/USD fell below 1.0650 in the second half of the week as the risk aversion of the market environment helped the US dollar find demand. However, the pair remains within its horizontal trading range and the technical outlook offers no directional guidance for now. GBP/USD GBP/USD managed to rebound and climb towards 1.2050 early Thursday after falling to the 1.2000 area late Wednesday. The pair's short-term technical picture suggests buyers are still hesitant to commit to a steady recovery. The cable pair trades below $1.21. Mostly trading on the daily chart is below 1.2050. Source: investing.com, dailyfx.com, finance.yahoo.com

AUD/USD fades bounce off 50-HMA amid failures to cross three-day-old descending resistance line. Looming bear cross on MACD keeps sellers hopeful but 200-HMA is a tough nut to crack for sellers. Bulls need validation from 0.6800 to retake control. AUD/USD snaps a two-day uptrend as it retreats from a short-term downward-sloping resistance line during early Friday. Even so, the sluggish MACD and holiday mood in the market restricts the Aussie pair’s downside and hence the quote remains mildly offered near 0.6770 by the press time. It should be observed that the MACD is likely teasing the bears, despite being sidelined of late, which in turn joins the quote’s failure to cross the immediate hurdle to keep the sellers hopeful. However, the 50-HMA level surrounding 0.6755 restricts the AUD/USD pair’s immediate downside. Should the quote breaks the immediate HMA support, traders will pay attention to the key downside level of 0.6718, comprising the 200-HMA, a break of which could quickly drag the Aussie pair towards the monthly low of 0.6629 marked in the last week. Alternatively, recovery moves need to cross the descending trend line from Wednesday, around 0.6785, to push back the bearish bias. Even so, the weekly top surrounding the 0.6800 round figure acts as an extra filter to the north before welcoming the AUD/USD bulls. Overall, AUD/USD remains sidelined even as the bears struggle to retake control. AUD/USD: Hourly chart Trend: Sidelined

As we enter the final trading day of 2022, the rebound in the dollar index can be attributed in part to investor repositioning as markets remain cautious ahead of the long weekend. The lack of data this week left markets fueled by renewed tension between Russia and Ukraine, as well as mixed sentiment around rising Covid numbers in China. EUR/USD The EUR/USD pair in the European session exceeded the level of 1.0680. It is currently trading just below that level - 1.0679 EUR/USD surged towards 1.0700 during European trading hours before pulling back slightly. The renewed weakness of the US dollar on the last trading day of the year seems to be helping the pair stay in the red in the absence of fundamentals. In the absence of high-impact macroeconomic releases, investors are unlikely to take large positions on the last trading day of the year. Data from the euro zone showed Spain's Harmonized Index of Consumer Prices fell to 5.6% on an annualized basis in its preliminary December reading from 6.7% in November. However, these data did not have a noticeable impact on the behavior of the euro against rivals. The ISM Chigao Purchasing Managers Index for December will be the only data to appear in the US Economic Report. GBP/USD The Cable pair is trading at 1.2050 now. GBP/USD managed to climb above 1.2050 early Friday after breaking a two-day streak on Thursday. As trading conditions remain weak on the last trading day of the year, the pair may struggle to make a firm move in either direction. Despite cautious market sentiment, the US dollar is struggling to find demand on Friday and is helping the pair limit their losses. Fears of recession in the UK are likely to limit sterling growth in Q1 2023, especially if the housing market continues to deteriorate. In theory, the impact on the GBP should be negative, with lower housing demand resulting in softer inflation and a more dovish Bank of England (BoE). Read next: TC Energy Corp Has Announced That It Is Aiming To Fully Reactivate The Keystone Oil Pipeline System After The Largest Reported Spill In The Pipeline's History| FXMAG.COM AUD/USD The Aussie pair was heading above 0.68 today and it managed to do so, but failed to maintain the level. At the time of writing, the AUD/USD pair is trading below 0.68 at 0.6794. The Australian dollar is set to fall in 2022, falling for a second consecutive year as the US Federal Reserve's aggressive monetary tightening, China's economic woes and slowing global growth have affected the currency. The Reserve Bank of Australia has also made a radical policy change after committing late last year to keeping the cash rate at a record low of 0.1% in 2022. The RBA has now raised the cash rate to 3.1%, its highest since November 2012, and said it expects further tightening as part of ongoing efforts to bring down inflation. USD/JPY USD/JPY is trading below 132 on the last trading day. In October, the yen fell to a 32-year low of nearly 152 per dollar as the Bank of Japan maintained its ultra-low interest rate policy while the US Federal Reserve began an aggressive monetary policy tightening campaign to curb rising inflation. However, the currency recovered about half of those losses as Japanese authorities intervened in the FX markets and defended the yen in the last quarter of 2022, while the BOJ unexpectedly raised the upper end of its 10-year government bond tolerance range to 0.5% from 0.25 % in December. Source: investing.com, dailyfx.com, finance.yahoo.com

The Fed and central banks around the world have been raising interest rates to fight soaring inflation stemming from supply chain problems related to the COVID-19 pandemic and an energy crisis related to oil producer Russia's Ukraine invasion. As a result, all three major averages registered their biggest one-year percentage declines since the 2008 financial crisis. Along with domestic worries, investors around the world have also been monitoring China, the world's second biggest economy, for signs of weakness. The dollar was on track to record its best year since 2015 on Friday on the last trading day of the year, dominated by Federal Reserve rate hikes and fears of a sharp slowdown in global growth. Since March, the Fed has raised interest rates by a total of 425 basis points in an attempt to stem rising inflation. The last trading week of the year is behind us. How the major currency pairs fared. GBP/USD The cable pair ended the last week of the year in bullish sentiment. The week the GBP/USD pair started trading below $1.21 at 1.2050. The pair traded mostly in the 1.20-1.21 range. The highest level of the pair reached the level above the upper limit of the crossbody, i.e. 1.2113. The highest was at 1.2003 and came before the weekly high. The British pound ended 2022 nearly 11% lower at $1.2, its worst year since the Brexit vote in 2016, amid a general cautious mood regarding the economic outlook for 2023, political uncertainty, and as a hawkish Fed sent the USD higher. The pound recovered since then after Rishi Sunak became the new prime minister but remains under heavy pressure, as the recession is looming while the Bank of England appears more dovish compared with its peers. Read next: ESG - Business Management For The Common Good| FXMAG.COM  EUR/USD EUR/USD traded above 1.06 but below 1.07. The pair started the week at 1.0630 and ended at 1.0712. The highest level reached at the end of the trade exceeding 1.07. The lowest level was still above 1.06 - 1.0611. AUD/USD The Australian pair, similarly to the euro pair, managed to break the upper level of resistance, which was at the level of 0.67. Thus, the couple ended the week on the highest level. The lowest level was at the beginning of the week (0.6699). Then the pair received support from information from China and thus grew above 0.67. USD/JPY The USD/JPY pair traded mostly around 132. It peaked above 132 at 134.420 and the low was below 131 (130.8210). The pair ended the last week of the year at 131.1050 The Bank of Japan (BOJ) is considering raising its January inflation forecast to show price growth close to its 2% target for fiscal years 2023 and 2024, the Nikkei reported on Saturday. This month, the BOJ launches an extension of its 10-year yield caps, which is officially intended to straighten out bond market disruptions, but some analysts see them as a way out of ultra-loose monetary easing. Japan's core consumer prices excluding fresh food in November hit their highest since 1981, according to last week's government data. The BOJ will release its latest quarterly growth and price forecasts after its next policy meeting on Jan. 17-18. Source: finance.yahoo.com, investing.com, dailyfx.com

AUD/USD is aiming to recapture the 0.6850 barrier as US Dollar Index has shifted into a bearish trajectory. Higher interest rate hikes by the Federal Reserve might impact the ISM Manufacturing PMI. The release of the FOMC minutes on Thursday will provide a detailed explanation of December’s policy. AUD/USD is hoping for a continuation of a six-day winning streak after sustaining above 0.6800. AUD/USD settled the last trading session of CY2022 on a promising note after the US Dollar Index (DXY) faced immense pressure. The Aussie asset continued its winning spree for the sixth day despite less trading activity due to the festive week. Usually, the overall trading activity gets reduced sharply amid a holiday-truncated week as investors prefer to save themselves from unexpected wild gyrations. The Australian Dollar managed to remain in a positive trajectory despite the vulnerable Covid-19 situation in China. Covid-19 cases have spiked sharply and the situation is beyond the control of medical facilities. This has triggered short-term pain in the extent of economic activities. Risk-perceived assets like S&P500 ended 2022 on a cautious note as analysts have mixed responses over economic projections. On contrary, the risk-sensitive currencies witnessed firmer demand from the market participants. The US Dollar Index (DXY) delivered a downside break of the consolidation formed in a 103.37-104.57 range. While the return on 10-year US Treasury bonds continued their strength and rose to near 3.88%. US ISM PMI seems crucial amid higher interest rates by the Federal Reserve Investors are keenly waiting for the release of the United States ISM Manufacturing PMI data, which will release on Wednesday. It is crucial to understand the change in the extent of economic activities as the Federal Reserve is continuously hiking interest rates. In December’s monetary policy meeting, Fed chair Jerome Powell hiked interest rates by 50 basis points (bps) to 4.25-4.50%. This has compelled firms to skip their expansion plans as interest obligations could be extremely higher in the current period of time. According to the estimates, the US ISM Manufacturing PMI data is expected to improve to 49.6 from the former release of 49.0. Apart from that, investors will focus on New Orders Index data that provide cues about the forward demand in the United States economy. The economic data is seen higher at 48.1 vs. the former release of 47.2. Federal Open Market Committee hogs limelight This week, the event of Federal Open Market Committee (FOMC) minutes will remain in the spotlight. The release of the FOMC minutes on Thursday will provide a detailed explanation of December’s monetary policy decision. Apart from that, the market participants will keep an eye on cues about economic projections and likely monetary policy action by Fed chair Jerome Powell ahead. A scrutiny of Federal Reserve chair Jerome Powell’s speech in December’s monetary policy meeting clears that the central bank sees interest rate peak around 5.1%. Considering opinions from various Federal Reserve policymakers, the central bank will keep interest rates at their peak and continue for the entire CY2023 to achieve price stability. Caixin Manufacturing PMI seems crucial amid China’s vulnerable Covid situation The Chinese economy has attracted a significant decline in economic projections by think tanks after adopting a sheer pace in reopening the economy. After a firm protest by households for the rollback of lockdown restrictions, it seems necessary to check out the deviation in the figures from the prior release. As per the consensus, the Caixin Manufacturing PMI data is expected to drop marginally to 49.3 from the prior release of 49.4. Observation from the Chinese official Manufacturing PMI shows a downbeat expression. Official China’s Manufacturing PMI data dropped to 47.0 vs. the expectations of 49.2 and the former release of 48.0. AUD/USD technical outlook On a four-hour scale, the Aussie asset is auctioning in a Rising Channel chart pattern, which is highly neutral as it has formed after a sell-off move from December 13 high around 0.6900. The round-level resistance of 0.6800 has remained a critical barrier for the Australian Dollar for the past 15 trading sessions. A recovery move in the Aussie asset has pushed it above the 20-period Exponential Moving Average (EMA) around 0.6747. Also, the 200-EMA at 0.6700 is still solid, which indicates that the long-term trend is still bullish. The Relative Strength Index (RSI) (14) is struggling to shift into the bullish range of 60.00-80.00. An occurrence of the same will trigger bullish momentum

Central banks and inflation remain the focus of the markets, as well as signals indicating how long and deep the recession may turn out to be. The Euro area economy also heading into recession, concerns over winter gas supplies have eased meaning the slowdown may not be as severe as feared just a few months ago. The first trading day of the year was subdued with many countries, including major shopping malls such as the UK and Japan, closed for the holidays. The dollar strengthened on Monday, moving away from its recent six-month lows against a basket of major currencies for the time being. This week, the critical event that will support the USD Index in gauging a decisive move will be the release of the Federal Open Market Committee (FOMC) minutes. The FOMC minutes will provide a detailed explanation of December’s monetary policy decision. Once trading conditions normalize and major markets return to operation on Tuesday, safe harbor flows could begin to dominate financial markets. In this scenario, the US dollar is likely to hold its ground against its risk-sensitive rivals. USD/JPY The USD/JPY pair is trading below 131 on the daily chart. It is trading in a narrow range of 130.75-130.80. On the Tokyo front, clear inflation projections for the next two years by the Bank of Japan (BOJ) are supporting the Japanese Yen. GBP/USD The cable pair is trading at 1.2051 at the time of writing. On the daily chart, the pair is moving in a narrow range. Following the modest rebound witnessed on the last trading day of 2022, GBP/USD came under subtle bearish pressure and declined toward 1.2050 on the first trading day of 2023. Nevertheless, trading action remains relatively subdued in the absence of data releases. Read next: Twitter Did Not Pay $136,260 Rent, Microsoft Reported Its Worst Quarterly Results In Years| FXMAG.COM EUR/USD After falling towards 1.0650 in the early morning hours in Europe on Monday, EUR/USD managed to rebound towards 1.0700. Thanks to Friday's increases, the pair closed the previous six weeks in the black. Currently, the pair is trading in a range below 1.07, to be precise 1.0686 Meanwhile, the S&P Global manufacturing PMI for the Eurozone was 47.8, in line with market expectations and preliminary estimates.  On the negative side, Germany's S&P Global Manufacturing PMI was 47.1, slightly below the initial estimate of 47.4. In the rest of the day there will be no publication of important macroeconomic data. Eurozone and US bond and equity markets will be closed for the New Year holiday, suggesting EUR/USD is likely to trade in a narrow channel in the second half of the day. AUD/USD Similarly to the euro, the Australian failed to maintain the high level seen at the end of the year. Today, it mostly traded above 0.68, but has now fallen below that level. Trading just below 0.68, at 0.6798 Source: investing.com, finance.yahoo.com

China's Caixin Manufacturing PMI for December dropped to 49.0 vs. 48.8 expected and 49.4 previous, showing that the country’s covid containment continued to negatively impact the output at the end of 2022. While output fell at a softer rate compared to November, total new orders fell at a quicker pace. Wang Zhe, Senior Economist at Caixin Insight Group said, “Both manufacturing supply and demand continued to shrink last month. Fallout from the pandemic was a drag on production and sales, with the subindexes for output and total new orders staying below 50 for the fourth and fifth straight months, respectively.” “Due to the economic downturn and weak demand overseas, the reading for new export orders also remained in contraction for the fifth straight month,” Wang added. AUD/USD holds lower ground below 0.6800 The upbeat print of the Chinese Manufacturing PMI fails to lift the Aussie Dollar, as AUD/USD is testing lows near 0.6775, down 0.41% on the day, at the time of writing.  

AUD/USD has climbed above 0.6830 as the risk-on profile has rebounded firmly. Better-than-projected release of the Caixin Manufacturing PMI data has supported the Australian Dollar. The RSI (14) has shifted into the bullish range of 60.00-80.00, which indicates that the bullish momentum has been activated. The AUD/USD pair has got immense strength after the release of better-than-anticipated Caixin Manufacturing PMI data. The economic data landed at 49.0 higher than the former release of 48.8 despite a spike in Covid-19 infections after the Chinese administration adopted a sheer pace for reopening the economy. The US Dollar Index (DXY) has dropped below 103.20 despite a recovery move in the opening session. Meanwhile, S&P500 futures have recovered their entire losses displayed in early Asia, portraying a firmer rebound in the risk-appetite theme. On a four-hour scale, the Aussie asset is marching towards the horizontal resistance, which is a three-month high, placed from December 13 high at 0.6893. The Australian Dollar has picked strength after a mild correction to near the 20-period Exponential Moving Average (EMA) at 0.6792. Also, the 50-period EMA at 0.6765 is advancing, which indicates that the upside bias is still solid. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 40.00-60.00, which indicates that the bullish momentum has been triggered. Going forward, a break above December 5 high around 0.6850 will drive the Aussie asset towards a three-month high around 0.6900. A breach of the latter will confirm more upside towards August 30 high at 0.6956. On the contrary, a downside move below December 29 low at 0.6710 will drag the major further towards December 22 low at 0.6650 followed by November 21 low at 0.6585. AUD/USD four-hour chart  

The US dollar appreciated, mainly due to the minutes from the December meeting of the Federal Reserve. The U.S. central bank raised interest rates by 50 basis points last month after four consecutive increases of 75 basis points in a year, but said it may have to keep interest rates higher for longer to bring inflation under control. Minutes from the December Fed meeting are due to be released on Wednesday, with investors looking for clues as to what rate path is likely to be taken in 2023. The market seems to be struggling to interpret the change in China's Covid-19 strategy. On the one hand, it is predicted that it is likely to unleash the world's second largest economy and its associated supply chains. The Chinese data remains soft and the Caixin manufacturing PMI released today came in with a narrow miss. In December it was 49.0 instead of 49.1 forecast and 49.4 earlier. Moreover, there was a desire from the Chinese side for better relations with the US after their foreign minister said they would look for more open channels of communication. It is worth noting, however, that the exchanges point to a risky market environment, which usually makes it difficult for the US dollar to find demand. USD/JPY The Japanese yen continued to strengthen today with USD/JPY dipping below 130 for the first time since June last year. It has now returned to trading above 130 and is close to 131. The yen, which hit a seven-month high during the Asian trading hours, was recently trading low at 130.45 to the dollar. The pair's decline was mainly driven by a new Japanese yen buying spurt as US equities futures fell at the open and bolstered safe-haven inflows into the yen. Speculation that the BoJ was about to start moving away from its very lax policy flared up in December when the central bank extended the yield cap on 10-year Japanese government bonds (JGB). This was further reinforced by the Nikkei report on Saturday. Read next: The Korea Fair Trade Commission (KFTC) Will Impose A Fine Of $2.2 Million On Tesla Inc| FXMAG.COM GBP/USD GBP/USD drops below the key 1.2000 level for the first time in 4 weeks as the dollar index recovers. Today's morning drop in GBPUSD is due to the recovering dollar index. The risk-positive market environment does not appear to be helping sterling find support so far. As noted above, the decline is attributable to the stronger dollar and not to UK-specific factors, which may also have exaggerated the impact. The UK economy is weighed down by recession fears, high inflation and the cost of living crisis. The Bank of England has raised interest rates nine times since December 2021 to try to bring down inflation, which remains close to a 41-year high. EUR/USD EUR/USD lost traction and fell towards 1.0550 early Tuesday after climbing above 1.0700 on Monday. It's hard to stop the driving force of the pair's recent actions as the market recovers with the US dollar strengthening again. Nevertheless, technical forecasts point to a bearish slope after the sharp decline seen during the European session. Euro still awaits German CPI data release, which may help EUR/USD move towards 1.06. Source: investing.com Read next: New Record For Electric Car Manufacturer - Tesla Deliveries Increased By 40% Year-On-Year| FXMAG.COM AUD/USD The Australian pair fell from above 0.68 to 0.6695 Weaker than expected official Chinese PMI data released over the weekend may have contributed to the decline. The Australian remains supported by expectations that the Reserve Bank of Australia will raise interest rates later this year as part of its ongoing effort to bring down inflation. Markets are currently divided on whether the RBA will deliver another rate hike in February. Australia's trade balance remains at a record high and the AUD/USD exchange rate weakens due to interest rate differentials, and the domestic economy continues to benefit from this. Source: investing.com Source: dailyfx.com, investing.com, finance.yahoo.com

Problems of tech companies in the US appeared again, causing the local market to fall. Similarly, the European market fell because right after a significant increase, shares of TESLA and APPLE collapsed by more than 14% and 4% respectively, resulting in a negative closing of stock indices. This shattered all hopes of a rise in demand for equities, which had been expected at the start of the new year. The forex market could not stay away from the situation of the stock market either as dollar began to rise before the opening of the US trading session. The driver was the growing expectations of lower inflation in Europe, which was influenced by the CPI data from Germany. This increased the likelihood that other global central banks will follow the Fed in taking a pause in raising interest rates. The oil market also came under pressure, showing a strong local drop in prices. Most likely, the negative sentiment will continue if the minutes of the December Fed meeting, which is due out today, do not hint at a pause in rate hikes in the 1st quarter of the new fiscal year. The labor market data not showing a slowdown in growth will give a similar effect. The turning point could be the upcoming US consumer inflation figures as markets will surely shift from bearish to bullish once the data shows a slowdown. This could be accompanied by a marked weakening of dollar. Many remain optimistic on a global reversal in markets. Forecasts for today: USD/JPY The pair is trading below 131.40. If market sentiment improves today, there will be a local recovery towards 132.50. AUD/USD The pair is trading below 0.6825. Again, if the situation in the markets stabilizes and investor sentiment improves, the pair will rise above 0.6825 and surge to 0.6900 Relevance up to 06:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331411

The dollar fell on Wednesday, losing against currencies such as the Australian dollar and against the euro, which gained ground on the data series. The dollar was already under pressure from investors becoming more optimistic about the prospect that China's easing of strict COVID restrictions would breathe life into the world's second-largest economy. Wednesday's data showed that consumer price pressure in France fell much more than expected in December, while the previous day's data from Germany also showed that inflation fell much more than expected. Last week's Spanish inflation data painted a similar picture. The Fed meeting minutes from the last Federal Open Market Committee (FOMC) meeting are due to be released later and may shed more light on the board's outlook for the monetary policy tightening cycle. Perhaps more importantly, the market will also be watching employment and inflation figures ahead of the next FOMC meeting in early February. EUR/USD The euro saw its biggest one-day fall against the dollar on Tuesday. Today, the EUR/USD pair is trading above 1.06 again. The breakout took place during the European session, in the asia session the pair stayed below 1.06 The Eurozone showed resilience in late 2022 with plenty of positive data, which so far looks set to continue into 2023. Yesterday brought more positive data as German inflation figures came in at -0.8% vs. forecast - 0.3% with unemployment rate beating estimates. French flash inflation figures were released earlier today, further strengthening the narrative. The S&P Global Eurozone PMI Composite Output Index remains below 50 and is down for the sixth consecutive month at 49.3, up from 47.8 in November. The data signaled the slowest decline since July last year, when activity levels began to decline. This decline has moderated in each of the last two periods of the study. Eurozone Services PMI business activity index rose to 49.8 in December from 48.5 in November. Source: investing.com Read next: Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM USD/JPY The yen pair in the European session is heading towards 131. Japan's manufacturing PMI declined slightly in December. AUD/USD The Australian dollar surged towards 0.68 on Wednesday. Moreover, some experts believe that AUD/USD is moving towards 0.69. The current level of the pair shows that it is further than close to this level. The Australian was driven by optimism that . China considers partial lifting of Australia's coal mining ban Read next: How Dream Sports Built Its Value, High Inflation And Its Impact On The Hedge Fund| FXMAG.COM GBP/USD Sterling rose against the weakening dollar and was slightly higher against the euro as the easing of COVID rules in China prompted investors to bid on risky currencies. The cable market in the morning session stayed below 1.20, in the European session there was a breakout and the pair returned to htrading around 1.2050. ING analysts warned of a potential bearish sentiment in the pound against the US dollar. ING analysts believe that sterling's performance against the euro this year will likely depend on how quickly the Bank of England (BoE) can stop tightening monetary policy. Investors see potential bullish signals for the single currency against the pound if the ECB continues to raise interest rates while the BoE sends mixed messages. Source: investing.com, dailyfx.com, finance.yahoo.com

AUD/USD comes under some selling pressure on Thursday, though the downside seems cushioned. Looming recession fears cap the optimism in the markets and undermine the risk-sensitive Aussie. Rising bets for smaller Fed rate hikes weigh on the USD and help limit deeper losses for the major. The AUD/USD pair finds decent support near the 0.6800 mark and climbs to the top boundary of its daily trading range during the early European session. The pair is currently placed around the 0.6830-0.6835 region, nearly unchanged for the day, still well below the multi-month high retested on Wednesday. Despite the reopening of the Chinese economy, growing recession fears keep a lid on any optimism in the markets and act as a headwind for the risk-sensitive Australian Dollar. The downside, meanwhile, seems cushioned, at least for the time being, amid a softer tone surrounding the US Dollar, which continues to be weighed down by the prospects for smaller rate hikes by the Fed. In fact, the minutes of the December FOMC monetary policy meeting released on Wednesday showed that officials unanimously supported raising borrowing costs at a slower pace. This, in turn, keeps the US Treasury bond yields depressed near a three-week low and is seen undermining the greenback. Traders, however, seem reluctant to place aggressive bets ahead of the US macro data. Read next: Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM Thursday's US economic docket features the release of the ADP report on private-sector employment and the usual Weekly Initial Jobless Claims. This, along with the US bond yields and the broader risk sentiment, will influence the USD dynamics and provide some impetus to the AUD/USD pair. The focus, however, will remain on the closely-watched US jobs report (NFP), scheduled for release on Friday.

The Australian dollar has posted limited losses on Thursday. In the European session, AUD/USD is trading at 0.6822, down 0.17%. Australian dollar soars as China mulls coal imports The Australian dollar rocketed higher on Wednesday, rising 1.6% and hitting a 3-week high. This followed reports that China was considering easing its ban on imports of Australian coal. The ban has been in place since 2020, but relations between Australia and China have improved since the new Australian government took office. The move would bolster the Australian economy, although the Australian government was surprisingly low-key, saying that the coal industry had found alternative markets. China is Australia’s number one trading partner, which means that developments in China have a significant impact on Australia and the direction of the Australian dollar. The sharp U-turn in China’s covid policy, from zero-covid to easing restrictions should give a boost to the Chinese economy in the long term. However, we can expect China’s economy to slow down and even contract in the first quarter, due to the surge in Covid cases which is dampening demand for services and also lowering production as many workers report in sick. This could pose a major headwind for the Australian dollar early in 2023. The Federal Reserve minutes reflected the hawkish message that Jerome Powell had for the markets at the December meeting. FOMC members committed to maintaining a restrictive policy while inflation remained unacceptably high, saying that more evidence was needed to show that inflation was on a “sustained downward path to 2 per cent”. The minutes noted that several members warned against “prematurely loosening monetary policy”. Despite the Fed’s hawkish stance, there is still a dissonance between the Fed’s message and market pricing. The minutes noted that no FOMC members expect any rate cuts this year, while the markets have priced in a possible small reduction by the end of 2023 and have forecast a funds rate peak at 4.5%-4.75%. The Fed, on the other hand, expects rates to hit 5% or higher. Minneapolis Fed President Kashkari said on Wednesday that rates could rise to 5.4% or even higher if inflation doesn’t head lower. Read next: Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000| FXMAG.COM AUD/USD Technical AUD/USD has support at 0.6703 and 0.6620 There is resistance at 0.6841 and 0.6969 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The dollar was more or less flat in choppy trading on Thursday after the Federal Reserve's closing minutes were released. The FOMC minutes repeated the message of a critical fight against inflation, more rate hikes ahead and no forecasts for 2023. The Fed publication reminded markets that policymakers do not anticipate a rate cut in 2023 and want to see "much more evidence" of progress to conclude that inflation is on a downward path. Analysts said the protocols were broadly in line with expectations, explaining the markets' relatively subdued reaction. A higher-than-expected JOLT reading of 10.45 million job vacancies in November and the ISM Manufacturing PMI survey triggered a rebound in the US dollar (DXY) index. Although the headline PMI fell slightly in December, the employment index in the PNI report unexpectedly rose to 51.4 from 48.4 in November. Meanwhile, the hawkish tone in the minutes of the December Federal Reserve meeting provided additional support for DXY. Looking ahead, the market will be watching the US employment data today to decipher the potential implications for the Fed at its next meeting in February. It's worth watching future reports. Private ADP employment figures will be released tomorrow ahead of NFP figures and on the EU side EU inflation figures will be released tomorrow after Italy showed slightly lower inflation readings in monthly and yearly comparisons. Next week, the US inflation data for December will be watched closely as the Fed continued to stress the impact of inflation on market disbelief as another lower printout would mean a sixth consecutive cooler printout for the headline and third for the core indicator. USD/JPY The Japanese yen trimmed losses from the previous session against the US dollar. On the Tokyo front, the Japanese yen witnessed a sharp decline after BJ Governor Haruhiko Kuroda advocated further policy easing to push the wage price index to meet elevated inflation projections for 2023 and 2024. The currency and commodity markets started the year with a break in volatility. Japan relies heavily on imports for most of its energy, and with crude oil down about 9% in the last few days, the yen could be the beneficiary of this move. In addition to the yen, the US dollar was weakened during the New York close but has since recovered some of those losses. The USD/JPY pair managed to exceed the level of 132 in the Asian session. It looks like the pair will be headed in the direction of 133 in the near future. GBP/USD GBP/USD traded slightly lower in the early hours of Europe on Thursday and fell towards 1.2000. The UK services PMI rose close to breakeven in December, suggesting little change in activity this month. Read next: Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000| FXMAG.COM EUR/USD EUR/USD keeps trading above 1.0600, but a drop below is still possible. The fundamental landscape surrounding the euro area economy has changed slightly compared to the first three quarters of 2022 and this is largely due to the significant reduction in oil and gas prices, which has brought a huge relief to the bulk importer of these commodities. From today's data from europe, the PPI report is expected. The European Economic Report will include a Producer Price Index (PPI), but that data is unlikely to trigger a significant reaction, especially ahead of Friday's Eurozone Inflation Report. AUD/USD The Aussie Pair keeps its trade above 0.68 despite being closer to 0.68 than 0.69. The Australian dollar soars as traders boost economic confidence in China Most of the AUD's gain took place during Wednesday's trading session in the Asia-Pacific region. At the time, investors likely priced in the potential economic impact of future trade flows between Australia and China due to several developments. Read next: Harvard Business Review Research Shows That Education Is No Longer So Important On The Labor Market, The Ban On The Import Of Hamsters Has Been Lifted, 60/40 Portfolio Is Ended?| FXMAG.COM Source: dailyfx.com, finance.yahoo.com, investing.com

The dollar offset earlier gains after US employment data showed employers created 223,000 jobs in December, more than economists had forecast, while wage growth slowed this month. Fed futures traders have raised bets that the Fed will raise interest rates by 25 basis points at the end of its two-day meeting on February 1 after Friday's data. An increase of 25 basis points is now seen as a 67% probability, up from 54% before, and an increase of 50 basis points is now seen as a 33% probability. USD/JPY USD/JPY started the week at 130.92, ended the week much higher at 132.0540. The week's high was even higher than the last reading and the pair crossed 134 at that point. The low was shockingly low compared to the high as it was below 130, 129.53 to be exact. EUR/USD The EUR/USD pair started the week and the new year at a high level of 1.07. It ended the week trading at 1.0648. It was a tumultuous week for the pair as they had to struggle many times to keep their trade above 1.06 and thus their low was read below that level. The lowest level was even below 1.05 at 1.0491, the highest later was at the level from the beginning of the trading week, i.e. at 1.0709. Unsurprisingly, drastically lower energy prices in the Eurozone helped to soften the headline measure of inflation, where it improved year-on-year and month-on-month - highlighting the trend of lower prices for EU consumers. EU headline inflation drops from 10.1% to 9.2% YoY. Core inflation rises from 5% to 5.2% YoY. According to estimates, energy price growth, although still the largest contributor to the overall index, fell from 41.5% in October to 25.7% in December. By contrast, price pressures on non-energy or food items are higher, suggesting that high inflation remains quite common. GBP/USD Similarly for the euro, the cable pair also had a difficult week. The pound was exceptionally weak and fell below 1.20. They will start the week at 1.2111 and thus it is the highest reading in this trading week, and the end of the week was at 1.2093. The lowest level of the GBP/USD pair was below 1.1850 (1.1848). AUD/USD The Aussie pair was the best among the major pairs of valises. Throughout the week, AUD/USD traded in a tight range compared to other pairs. The pair's weekly range was 0.6700-0.6875. The pair started the year trading at 0.6821 and finished at 0.6879. The end of the week was close to the week's high at 0.6888. The pair dropped the lowest in the week at 0.6690. The factors contributing to the pair's volatility appear to have been largely external, with Chinese politics, Federal Reserve meeting minutes and US employment figures playing a role. China's efforts to break out of its economically stifling zero-case Covid-19 policy appear to come with several challenges. While official figures show a situation that is under control, anecdotal evidence from hospitals and morgues suggests a more problematic transition. At the moment, Australia's trade surplus remains at record highs and the November figure will be known this Thursday. Source: finance.yahoo.com, investing.com

Pacific currencies have taken the lead in volatility since the beginning of the year. The New Zealand dollar closed Friday up 2.09% and the Australian dollar up 1.96%. The US dollar index lost 1.15%. On the daily chart, the Marlin oscillator has already moved into the bulls' territory; now it is the price's turn to move above the resistance at 0.6917. In case it succeeds, which is quite probable due to the growth in commodities (China has resumed buying Australian coal after a two-year break due to the political circumstances), the AUD/USD pair may continue rising to the target level of 0.7048, which is the high on August 1. Then we might see the formation of a divergence (dashed lines on the chart) and a reversal of the price into a medium-term decline for a few months. On the four-hour chart, the price continues to rise, fearlessly approaching resistance at 0.6917 (the September 13 peak). There is a high probability that it will cross this level. We are cautiously waiting for the continuation of growth. Relevance up to 03:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331696

Summary:  Volatility back in focus this week with US CPI on the radar, after jobs report showed a strong headline but softening wage growth. Economic concerns in the US are increasing but it still isn’t enough for the Fed to shift focus from inflation which is likely to remain about three times the Fed’s 2% target, and Fed Chair Powell’s comments this week will also be key. China’s December CPI is expected to come in modestly higher, with PPI less negative as well. Australia’s November CPI will key for further direction in AUDUSD. UK’s November GDP will likely signal the start of an incoming official recession, and Q4 earnings season kicks off with bank earnings in focus this week.         US CPI remains the most key data point to watch, Fed Chair Powell speaks as well There is enough reason to believe that we can get some further disinflationary pressures in the coming weeks. Economic momentum has been weakening, as highlighted by the plunge in ISM services last week into contraction territory, particularly with the forward-looking new orders subcomponent. An unusually warm winter has also helped to provide some reprieve from inflation pains. Bloomberg consensus forecasts are pointing to a softening in headline inflation to 6.5% YoY, 0.0% MoM (from 7.1% YoY, 0.1% MoM prev) while core inflation remains firmer at 5.7% YoY, 0.3% MoM (from 6.0% YoY, 0.2% MoM). Still, these inflation prints remain more than three times faster than the Federal Reserve’s 2% target. Fed officials have made it clear they expect goods price inflation to continue to ease, expecting another big drop in used car prices. But officials are seemingly focused on services ex-housing which remains high. So even a softer inflation print is unlikely to provide enough ammunition for the Fed to further slow down its pace of rate hikes. Fed Chair Jerome Powell this week as well, and his tone will be key to watch. Volatility on watch if US CPI sees a big surprise The last two months have shown that big swings in US CPI can spark significant volatility in the equity markets, given the large amounts of hedging flows and short-term options covering. With a big focus on CPI numbers again this week, similar volatility cannot be ruled out. Volume might be thin still this week as many are still on holidays, so moves in equities could be amplified in either direction. Meanwhile, FX reaction to CPI has been far more muted, but some key levels remain on watch this week. A higher-than-expected CPI print could keep expectations tilted towards a 50bps rate hike again in February, while a miss could mean expectations of further slowdown in Fed’s tightening pace to 25bps in February could pick up which can be yield and dollar negative. EURUSD looks stretched above 1.0650 and key levels to watch will be 1.0500, while USDJPY needs to close below 130.38 to extend the downturn further. USDCNH remains key to watch as well as it gets closer to test 6.8000 amid China reopening and easing in property sector. AUDUSD is also flashing a bullish signal after breaking above the key 0.69 this morning with China reopening momentum underpinning. The Aussie dollar flags a bullish signal, crossing a key level. Could inflation add to the rally? After the US dollar suffered its longest streak of weekly falls in two months, the commodity currency - the Aussie dollar broke above its 200-day moving average, which is seen by some as a bullish sign with the Aussie dollar (AUDUSD) trading at two-month high of 0.69 US cents. What's also supporting the currency is that China’s reopening is expected to add considerably to Australia’s GDP. There’s a potential 0.5% addition to GDP in a year once Chinese students and tourists return. Plus there is likely to be an extra boost to GDP from the anticipated pick up in commodity buying from China. Extra hot sauce could even come from China potentially buying Australian coal again. JPMorgan thinks over the next two years, Aussie GDP will grow 1% alone thanks to inbound Chinese students and holiday makers likely returning. The next catalyst for the currency is inflation, CPI data out on Wednesday Jan 11. Core or trimmed CPI is expected to have risen from 5.3% YoY to 5.5% YoY. If CPI come in line with expectations, or above 5.3% YoY, you might also think the AUD rally could be supported.  China’s CPI expected modestly higher, PPI less negative Economists surveyed by Bloomberg had a median forecast of China’s December CPI at an increase of 1.8% Y/Y, edging up from 1.6% in November, mainly due to base effects, as food prices are likely to be stable and higher outprices in the manufacturing sector might be offset by a fall in services prices. PPI in December is expected to be -0.1% Y/Y, a smaller decline from -1.3% Y/Y in November, benefiting from base effects. The decline in coal prices was likely to be offset by an increase in steel prices. Growth in new RMB loan and aggregate financing expected to slow in China The Bloomberg survey consensus is forecasting a modest decline in new RMB loans to RMB1,200 billion in December from RMB1,210 billion in November despite the Chinese authorities have been urging banks to lend to the real estate sector. New aggregate financing is expected to slow to RMB1,850 billion from RMB1,990 billion, primarily dragged by a decline in bond issuance from local governments. UK November GDP to signal an incoming recession UK’s monthly GDP numbers are due this week, and consensus expects a contraction of 0.3% MoM in November from +0.5% MoM previously which was boosted by the favourable M/M comparison vs. September, which was impacted by the extra bank holiday for the Queen’s funeral. The economy is clearly weakening, and another quarter of negative GDP print remains likely which will mark the official start of a recession in the UK. Start of the US earnings season The Q4 earnings season starts next week with major US banking earnings most notably from Bank of America, JPMorgan Chase, and Citigroup. Analysts remain muted on US banks with earnings expected to show another quarter of negative earnings growth compared to a year ago. For the overall Q4 earnings season we expect to see more industries experiencing margin compression than industries experiencing expanding margins. This will continue to be a headwind for earnings growth. Analysts did not see the margin compression coming in Q3 and judging from current estimates they have not materially revised down their expectations. That means that the Q4 earnings season and beyond could be paved with more disappointments. The list below shows the most important earnings releases next week. Tuesday: Albertsons Thursday: Fast Retailing, Seven & I Friday: DiDi Global, Aeon, Bank of New York Mellon, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, UnitedHealth, BlackRock, Delta Air Lines, First Republic Read next: The U.K. Economy Is In Trouble, Fall Of GDP Is Expected!| FXMAG.COM Key economic releases & central bank meetings this week Monday 9 January U.S. Manheim used vehicle index (Dec) Germany Industrial production (Nov) Eurozone Sentix Investor Confidence (Jan) Eurozone Unemployment rate (Nov) Japan: market closed for holiday Tuesday 10 January France Industrial production (Nov) Japan Tokyo-area CPI (Dec) Fed's Bostic speaks in a moderated discussion Fed's Daly interviewed in WSJ Live event Fed Chair Powell speaks at Riksbank event Wednesday 11 January Australia retail sales (Nov) Australia CPI (Nov) U.S. MBA mortgage applications (Jan 6) Thursday 12 January Australia trade (Nov) U.S. CPI (Dec) China CPI & PPI (Dec) Fed's Harker discusses the economic outlook Friday 13 January U.S. U of Michigan Consumer Sentiment (Jan, preliminary) Eurozone: Industrial production (Nov) UK: Monthly GDP (Nov) Japan: Money supply (Dec) China: Imports, exports and trade balance During the week: China: Aggregate financing, new RMB loans, money supply (Dec) Source: Saxo Spotlight: What’s on the radar for investors & traders for the week of 9-13 Jan? US/China/Australia inflation, UK GDP and the start of Q4 earnings season | Saxo Group (home.saxo)

A cheerful market mood has strengthened the Australian Dollar. North-side sloping 20-and 50-EMAs add to the upside filters. The RSI (14) has shifted into the bullish range of 60.00-80.00, which indicates that bullish momentum is active now. The AUD/USD pair is displaying a sideways auction around the immediate hurdle of 0.6930 in the Asian session. The Aussie asset is expected to continue its upside journey amid sheer volatility in the US Dollar Index (DXY). The USD Index has dropped below 103.25, at the time of writing, and is expected to refresh its six-month low below the critical support of 103.00 amid a risk-appetite theme. S&P500 futures have carry-forwarded Friday’s strength as investors see a slowdown in the policy tightening pace by the Federal Reserve (Fed) ahead. Meanwhile, the 10-year US Treasury yields dropped to 3.56%. On a four-hour scale, the Aussie asset has delivered an upside break of the horizontal resistance plotted from December 13 high around 0.6880, which has turned into support now. Also, the breakout of the Rising Channel chart pattern indicates the strength of the Australian Dollar. Upward-sloping 20-and 50-period Exponential Moving Averages (EMAs) at 0.6833 and 0.6800 respectively add to the upside filters. Also, the Relative Strength Index (RSI) (14) has delivered a breakout into the bullish range of 60.00-80.00, which indicates that the upside momentum has been triggered. After a juggernaut rally, a corrective to near December 13 high around 0.6880 would be an optimal buy for investors, which will drive the major towards Monday’s high at 0.6930, followed by the psychological resistance at 0.7000. On the contrary, a downside move below December 29 low at 0.6710 will drag the major further toward December 22 low at 0.6650 followed by November 21 low at 0.6585. AUD/USD four-hour chart  

Summary:  Markets jumped higher on Friday after a mixed December jobs report from the US, mostly reacting a bit later in the session to the very weak December ISM Services survey, which suggests a rapidly decelerating services sector. US rates plunged all along the curve and the USD tanked as the market lowered Fed rate hike expectations, and risk assets rallied, with a further tailwind from China’s huge policy shifts in recent weeks.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) On Friday, it seems the market was looking past the strong labour market data focusing on the miss on the ISM Services Index in December at 49.6 vs 55. This bolsters the view that bad news is good news as it will cause the Fed to halt its monetary tightening sooner rather than later. Our view is still the same that inflation will remain stickier than what the market expects and thus even a mild slowdown in the economy will not lead to substantially lower interest rates. When the market recognizes this, it will begin to price equities more on slowing growth not offset by lower interest rates. Nevertheless, the US equity market is picking up momentum with S&P 500 futures extending their gains up 0.2% trading around the 3,924 level and above the upper level of the recent trading range. If momentum extends and the news flow remains supportive then the 3,950 level could quickly come into play. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Alibaba (09988:xhkg), surging 7.6%, was the best performing stock within the Hang Seng Index on Monday, following Ant Group announcing a new arrangement in which Alibaba’s founder Jack Ma cedes his indirect control of Ant Group. The new arrangement, which apparently has the blessing of the Chinese authorities, signals that Alibaba and its affiliates may be close to an end of the government-imposed reorganization and return to relative normal business.  Separately, Chairman of the China Banking and Insurance Regulatory Commission said that the rectification of the financial arms of internet platform companies had basically finished. Hang Seng Index surged 1.4% as of writing. China’s CSI300 gained 0.7% with non-ferrous metal, education services, and poultry farming leading. FX: USD sells off on weak ISM Services survey The US dollar sold off after a mixed jobs report delivered not signal, but then a shocking drop in the December ISM Services (more below) took down US treasury yields sharply all along the curve. By this morning’s trade, the move sent EURUSD back above 1.0675 and within reach of the 1.0700+ highs from December, while AUDUSD jumped to new cycle highs above 0.6900 on the weaker greenback together with surging metals prices on China’s policy shift (more below.). Despite the big drop in yields, USDJPY reacted less than other USD pairs as the strong rally in risk sentiment saw flows focusing on more pro-cyclical currencies, like AUD, NZD and NOK. Crude oil (CLG3 & LCOH3) remains volatile amid China’s chaotic reopening The first week of 2023 was tough for crude oil, driven by global growth concerns, a very mild winter across the Northern Hemisphere dampening demand, and a mixed outlook for China. Despite removing most virus-related restrictions, a surge in cases across the country has hit the short-term demand outlook while at the same time setting the economy on a path to recovery. Meanwhile, the IMF warned that a third of the global economy could be in recession in 2023. Supply side concerns are also seen with European sanctions on Russian oil having kicked in, while OPEC has reiterated that it is willing to step in with further production cuts. Short-term resistance being the 21-day moving at $75.65 in WTI and $81.15 in Brent. Gold (XAUUSD) surged higher on weak US ISM Gold’s already positive start to 2023 received a further boost on Friday after the mixed jobs report and very weak ISM services (see below) triggered a plunge in yields and the dollar. Total ETF holdings reached a one-month high while central banks remain active with the PBoC saying that it bought another 30 tonnes of gold in December 2022, following 32 tonnes in November, boosting the country's stash of gold to 2,010 tonnes. Speculators started the new year by boosting their net futures long to a seven-month high, supported by the current strong momentum and a general gold friendly outlook for 2023 driven by recession risks and peak dollar and yields. The next major hurdle for gold being $1896, the 61.8% retracement of the 2022 correction, with a break above confirming the change in direction that has been under way since November. Copper trades near key $4 level as China stimulus continues Copper jumped to a six-month high in Asia on Monday, driven by a general rebound in base metals as China looked to support its property sector. Beijing may allow some firms to add leverage by easing borrowing caps and push back the grace period for meeting debt targets. These were part of the “three red lines” policy that contributed to the downturn in recent years. Copper has advanced since November after lockdown protests led to an abrupt change in direction towards reopening the economy following months of fruitless lockdowns. The change in direction set by the government has bolstered the outlook for demand beyond the first quarter. Having broken above its 200-day moving average on Friday, now support at $3.8475, HG copper almost touched the key $4 level overnight. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) soared with yields on the 10-year notes 16bps richer to 3.56% Treasuries were bid Friday following the news of slowing average hourly earnings. Yields oscillated for a while as investors weighed the soft wage growth against the solid payrolls and fall in unemployment rates. Decisive declines in yields came after the release of the shockingly wevak December ISM Services Index (more below on the ISM and US jobs report), indicating contracting activities in the service sector. Two-year yields fell 21bps to 4.25% and those on the 10-year notes dropped some 16 bps to 3.56%. What is going on? Asian and EM equities enter bull market The leading MSCI indices tracking these two segments of the global equity market have entered a bull market up 20% since their lows in October fueled a more positive narrative. The market is betting on a shallow recession in some parts of the world, while inflation keeps coming down, and on top of a successful kickstart of the Chinese economy. All three wishes may not be able to be fulfilled simultaneously and our view is that the market is getting too excited about growth too early as a lot of uncertainty persists. Eurozone inflation is cooling off It was largely expected that the eurozone inflation would cool in December. But the first estimate was much lower than forecasted, at 9.2 % versus 10.1 % in November. This is a positive development and goes in the right direction, but this is still a high number. Looking at the main components, energy had (without surprise) the highest annual rate in December at 25.7 %), followed by food, alcohol and tobacco (13.8 %), non-energy industrial goods (6.4%) and services (4.4%). What is worrying is that core CPI continues to increase at 5.2 % versus prior 5.0 % and expected 5.1 %. This will push the European Central Bank (ECB) to keep hiking interest rates in the short term. But the peak in interest rates is getting closer (Mario Centeno) and the Eurozone macroeconomic outlook is not as bad as feared (if there is a recession underway, it is at the mild end according to the ECB chief Philip Lane). US macro: big miss in ISM services overshadows NFP gains The ADP report from last week had set up expectations for a stronger NFP print on Friday, and while the headline came in stronger than expected at ´+223k and the unemployment rate dropped back to the cycle low of 3.5%, the market instead focused on significantly slower wage growth than expected. The Average Hourly Earnings in December slowed to 4.6% YoY (0.3% MoM) from a revised 4.8% YoY November, keeping the market reaction to the overall jobs report mixed. Ninety minutes later, the December ISM services survey saw a shocking drop into contraction for the first time since May 2020 at 49.6 vs. expected 55 and 56.5 in November. The forward-looking New Orders sub-index fell over 10 points to 45.2 but details were still mixed with 11 of the 18 services sectors remaining in expansion. AUDUSD jumps to new 4-month high, clears 200-day moving average With the US dollar suffering its longest streak of weekly drops in two months, the Aussie dollar broke above its 200-day moving average for the first time since last April, and traded above 0.6900 for the first time since last August. Also supporting the currency is that China’s reopening is expected to add considerably to Australia’s GDP. There’s a potential 0.5% addition to GDP in a year once Chinese students and tourists return, and an anticipated rise in commodity exports to China, especially coal after a prior ban, could add an extra boost to GDP. JPMorgan thinks that over the next two years, Aussie GDP will grow 1% alone thanks to inbound Chinese students and holiday makers likely returning. The next catalyst for the currency is inflation (CPI) data out on Wednesday Jan 11. Core or trimmed CPI is expected to have risen from 5.3% YoY to 5.5% YoY. Fed speakers continue to highlight inflation concerns A host of Fed speakers were on the wires on Friday, and key message was the need for more rate hikes still despite signs of price pressures cooling. Cook (voter) said inflation is "far too high" and "of great concern" despite recent encouraging signs, while Bostic (non-voter) said the Fed needs a target rate above 5% and he expects Fed to hold at a peak policy rate for an extended period, "well into 2024". Barkin, another non-voter, touched more on inflation saying that that the Fed is still resolute on inflation, and needs to stay on the case until inflation is sustainably back to the 2% goal. Retiring member Evans however called for a slower pace of rate hikes. Read next: Plans To Sell FTX Assets Met With Opposition From US Trustee Andrew Vara| FXMAG.COM What are we watching next? How long will market celebrate any additional signs of a slowing US economy? The market’s primary focus on Friday after a very weak US ISM Services survey was the celebration of lower US treasury yields as weak data drives expectations that the Fed can ease its policy tightening more quickly than previously expected, but typically, a weaker economy would mean falling earnings and a credit crunch, which drives markets lower. Only hopes for a benign “soft landing” can continue to see the market celebrating signs of a weakening economy, if that is indeed what we get. This week includes very little in the way of important US data outside of Thursday’s December CPI (perhaps less focus there than previously, given we have seen a number of softer inflation-related data of late). Q4 Earnings season begins this Friday with the largest US financial institutions reporting and the reports and guidance coming over the following couple of weeks will bear close watching. Earnings to watch The Q4 earnings season kicks off this Friday with banking earnings from Bank of America, JPMorgan Chase, and Citigroup with consensus expecting earnings to continue contracting among US banks before coming back to growth this year. The key uncertainty is credit quality in 2023 as it is linked to the degree of a recession or maybe no recession at all in the US economy. With higher interest rates level expectations are that banking revenue will slowly begin to accelerate and if high interest rates persist for an extended period, the longer-term growth for banks could be quite attractive. Overall, the Q4 earnings season is likely going to see an extension of value and tangible companies performing better than intangible-driven companies. Tuesday: Albertsons Thursday: Fast Retailing, Seven & I Friday: DiDi Global, Aeon, Bank of New York Mellon, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, UnitedHealth, BlackRock, Delta Air Lines, First Republic Economic calendar highlights for today (times GMT) 1000 – Eurozone Nov. Unemployment Rate 1200 – Mexico Dec. CPI 1330 – Canada Nov. Building Permits 1530 – UK Bank of England Chief Economist Huw Pill to speak 1730 – US Fed’s Bostic (non-voter) to speak 1730 – US Fed’s Daly (non-voter) to speak 2000 – US Nov. Consumer Credit 2330 – Japan Dec. Tokyo CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 9, 2023 | Saxo Group (home.saxo)

Technical analysis: AUD/USD has been trading upside and I found breakout of the multi-week defined trading range, which is good sign that buyers are in control and that there is chance for further upside movement. Trading recommendation: Due to the strong upside pressure and short-term trend in the background, I see potential for further upside movement towards next upside objectives. Watch for the potential buying opportunities with the upside objectives at 0.7020, 0.7125 and 0.7265. MACD oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 0.6850 Read next:After The Correction, Jacek Ma's Share In Shareholder Votes Will Fall To 6.2%| FXMAG.COM   Relevance up to 09:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307818

The US dollar on Monday approached a seven-month low against other major currencies after data suggested the Federal Reserve could slow the pace of rate hikes. The dollar suffered its biggest quarterly loss in 12 years in the last three months of 2022, driven mainly by investor confidence that the Fed would not raise interest rates above 5%. The probability of a 25 basis point Fed rate hike in early February rose above 70% after the release of this data, reflecting the return of dovish Fed betting. The US economic report will not contain any important macro data on Monday. Later in the day, Atlanta Federal Reserve Bank Chairman Raphael Bostic will give a speech, and he said on Friday that he expects the Fed to keep interest rates at peak levels until 2024. Friday's monthly employment report showed an increase in non-farm payrolls and a slowdown in wage growth. The US employment data hit the US dollar hard. USD/JPY The Japanese yen strengthened above 132 to the dollar, returning to its highest level in seven months. The yen is building on December gains amid mounting speculation that the Bank of Japan may soon move away from ultra-easy policy after it unexpectedly raised the upper end of its 10-year government bond tolerance band to 0.5% from 0.25% last month . However, BJ Governor Haruhiko Kuroda clarified that the move was not a sign of starting a massive stimulus exit, but was intended to improve the functionality of the bond market. AUD/USD The AUD/USD pair builds on Friday's strong rally and gains strong traction on the first day of the new week. This marks the second day in a row of positive movement. The Aussie pair broke through the 0.69 level in the Zajati session. China's hopes of reopening may have contributed to the strengthening of the commodity currency. The world's second largest economy has lifted quarantine requirements for visitors, taking another step towards reconnecting to the world in the post-Covid era. Over the weekend, China finally reopened its sea and land border crossings with Hong Kong, the last pillar of its zero-covid policy, after three years. On the monetary policy front, the currency remains supported by expectations that the Reserve Bank of Australia will raise interest rates further this year in an ongoing effort to bring down inflation. Otherhand, markets are currently split on whether the RBA will deliver another rate increase at its Feb. GBP/USD The British pound hit a two-and-a-half-week high on Monday against a fundamentally weak dollar. GBP/USD entered a consolidation phase and pulled back towards 1.2100 after hitting a two-week high at 1.2175 earlier in the day. The US dollar came under strong selling pressure before the weekend. Traders are fully pricing in a 25bps rate hike at the February BoE meeting with around a 65% chance of a larger 50bps hike. The money markets predict that the bank rate will peak at around 4.5% in the middle of this year. EUR/USD EUR/USD is on a strong gain for the second day in a row. After Friday's rally before the weekly close, EUR/USD rose to 1.0699 on Monday. The euro benefited from better market sentiment. Today the EUR/USD pair climbed towards 1.0700. Unemployment in the EU shows a downward trend and November's print jobs reached 6.5% . Lower gas prices are also contributing to optimism in the eurozone and a better economic outlook for the eurozone, but the main driver of the euro appears to be a sell-off of the dollar along with flows into risky assets. Source: investing.com, finance.yahoo.com, dailyfx.com

AUD/USD remains sidelined around four-month high, snaps two-day uptrend. Eight-week-long ascending trend channel, sustained breakout of 200-DMA favor bulls. Multiple Fibonacci retracement levels add to the downside filters. AUD/USD struggles to defend the 0.6900 round figure as bulls retreat after poking the highest levels since late May the previous day. Even so, the Aussie pair keeps Friday’s upside break of the 200-DMA inside a two-month-old bullish chart formation, namely ascending trend channel. Also keeping the AUD/USD buyers hopeful are the bullish MACD signals. That said, the quote’s latest pullback could aim for the 61.8% Fibonacci retracement level of its June-October 2022 downside, near 0.6860, before challenging the 200-DMA support of 0.6838. Should the AUD/USD prices drop back below the key moving average, a convergence of the 50% Fibonacci retracement level and lower line of the stated bullish channel could challenge the bears around 0.6730-25 before giving them control. Following that, a slump toward the 38.2% Fibonacci retracement near 0.6600 can’t be ruled out. Alternatively, the recent high near 0.6950 and the stated channel’s upper line, close to 0.6990 could challenge short-term AUD/USD buyers. It’s worth noting that the 0.7000 psychological magnet and late August 2022 swing high near 0.7010 act as additional resistances to test the pair’s upside momentum. In a case where the AUD/USD price remains firmer past the 0.7010 threshold, the August 2022 peak of 0.7136 should return to the charts. AUD/USD: Daily chart Trend: Bullish

The US dollar improved slightly against its major trading partners early on Tuesday. The National Federation of Independent Business's monthly small business sentiment reading fell further in December as small businesses continue to struggle with high inflation that is dragging down profits. The economic outlook has deteriorated further this year. Markets are increasingly doubting whether the Fed will need to raise interest rates above 5% to cool down inflation as the effects of its aggressive rate hikes last year are already being felt in the economy. The focus for today will be Fed Chair Powell’s comments. USD/JPY So far, the Japanese yen has changed little against the dollar this week. USD/JPY was little changed on the news, but the Bank of Japan’s ability to maintain a loose monetary policy setting may come under closer scrutiny. USD/JPY is currently bullish and trading at 132.2600. In the earlier trading hours, the pair was even below 132. Japanese inflation appears to be accelerating after the headline Tokyo CPI hit a 40-year high at 4.0% year-on-year to the end of December. This was in line with forecasts, but core CPI was also 4.0% for the same period, above the 3.8% anticipated and 3.6% prior. EUR/USD EUR/USD has lost its traction and declined toward 1.0700 in the early American session on Tuesday. The EUR/USD was even above 1.0750 today. But the current level shows that the pair failed to break through the 1.0740 level, and the daily chart shows that the pair is barely down. It is possible that the EUR/USD pair will drop below 1.0700. While the US dollar remains under pressure from lower rate expectations, the Euro continues to be bolstered by the ECB’s insistence that rates will need to go higher to dampen ongoing price pressures. With the Fed coming to the end of its rate hike cycle, and with the ECB still in full flow, rate differentials between the two will continue to favor Euro strength. The EUR/USD pair as focus shifts to FOMC Chairman Powell's speech. GBP/USD The British pound traded above to $1.2, near a two-and-a-half-week high against the dollar, which hit Monday, The Cable Market is currently below that level, far from it. Trading is at the time of writing around 1.2120. The Bank of England's chief economist, Huw Pill, warned of the risk of continued inflationary pressures from a tight labor market, even if natural gas prices stabilize or fall. The UK central bank is likely to raise interest rates again to 4% next month. Meanwhile, markets are divided as to how much more interest rates will rise. On the data front, all eyes are on the monthly UK GDP figures. AUD/USD The Aussie pair stayed above 0.69 in the early hours of trading, but failed to maintain that level and found itself below it again. Currently, the Australian pair is trading around 0.6860. In addition, the market is also slightly favoring a quarter point hike from the Reserve Bank of Australia (RBA) to 3.35%. The probabilities may change data on monthly prices of consumer goods and services and retail sales for November, which will be published on Wednesday. After a surprise dip in October, inflation picked up again to an annualized 7.3%, while retail spending is expected to rise by a solid 0.7% thanks to major sales this month. Source: finance.yahoo.com, investing.com

The Australian dollar was down 22 points on Tuesday, unfortunately, not clearly correlated with the commodity markets as we had hoped for in our last review of the currency pair in question. Copper was up 1.26% yesterday, while gas was down 6.9%. There was no qualitative price breakthrough above the resistance at 0.6917 (the high on August 1, 2022). Divergence with the oscillator has already formed (lilac line), but there is still a risk of its upgrade to a less steep slope (the blue dotted line). The limit of growth is the target level of 0.7048. This issue will probably be resolved tomorrow, with the release of the US inflation report. On the four-hour chart, the price has settled under 0.6917, but the price is still above the indicator lines and the Marlin oscillator is in the growth zone. The price can go above the resistance line without any noticeable difficulties. The first sign of the reversal is when the price crosses the MACD indicator line, going below the 0.6845 mark. Relevance up to 03:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331912

On the 4-hour chart of the AUD/USD currency pair, you can see the corrective movement of the upward rally of the commodity currency pair being stuck in the weekly Resistance area (Weekly Bearish Orderblock) 0.6951 coupled with the appearance of deviations between price movements and the Awesome Oscillator indicator, so there is a high probability of AUD/USD The USD will depreciate down to the level of 0.6630 but if on its way to the target level AUD/USD suddenly reverses upwards and penetrates above the 0.6951 level then the downside scenario described earlier will become invalid and cancel itself. Relevance up to 03:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117345

A move above 0.6950 should allow AUD/USD to have another chance to revisit the 0.7000 mark in the near term, suggest Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group. Read next: The EUR/USD Pair Is Still Above 1.0700$, The USD/JPY Pair Was Little Changed| FXMAG.COM Key Quotes 24-hour view: “Yesterday, we highlighted that AUD ‘is unlikely to advance much further’ and we expected it to ‘trade between 0.6870 and 0.6950’. While AUD did not advance further, it traded within a range of 0.6860/0.6930. The price actions are likely part of a consolidation phase and AUD is likely to trade between 0.6855 and 0.6925 today.” Next 1-3 weeks: “Yesterday (10 Jan, spot at 0.6910), we indicated that while momentum continues to point to a higher AUD, it must break and stay above 0.6950 before a move to 0.7000 is likely. We continue to hold the same view. Overall, only a breach of 0.6825 (no change in ‘strong support’ level from yesterday) would indicate the current upward pressure has eased.”

The Australian dollar is trading quietly on Wednesday. AUD/USD is at 0.6904, up 0.14%. Australian CPI climbs to 7.3% Australian inflation pushed higher in November, rising to 7.3% following a 6.9% gain in October. This matched the forecast. The trimmed mean rate, a key gauge of core inflation, rose to 5.6% in November, up from 5.4% a month earlier and its highest level since 2018. The drivers behind the increase were higher jet fuel prices as well as accommodation prices. The drop in inflation in October (6.9%, down from 7.3% prior) had raised hopes that inflation might have peaked, but the rise in the November release has dampened such hopes. Retail sales for November jumped 1.4%, buoyed by Black Friday sales. This was much higher than the forecast of 0.6% and the October read of 0.4%. Consumer spending remains strong despite the double-whammy of rising interest rates and high inflation. What will be the RBA’s take on this data? The trimmed mean rate indicates that the rise in inflation is broad-based, a reminder that the RBA has more work to do as it tackles high inflation. The strong retail sales data shows that the economy can still bear further hikes, and the markets have priced in a 25-basis point increase at the February 7th meeting. The RBA rate policy is data-dependent, which means that the quarterly CPI release on January 25th could determine what decision the central bank takes at the meeting. The minutes of the December meeting indicated that the RBA considered three options at that meeting – a 25 bp hike, a 50-bp hike and a pause. In the end, RBA members opted for the 25-bp increase. I would expect the RBA to show similar flexibility at the February meeting. Fed Chair Powell finds himself under constant scrutiny, not just for his comments but also for what he doesn’t say. Powell participated on a panel at a symposium of the Swedish central bank on Tuesday. The topic was central bank independence, and Powell did not touch upon the economy or monetary policy. The markets took this as a dovish sign and the US dollar pared gains as a result. Read next:Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM AUD/USD Technical 0.6931 remains a weak resistance line, followed by 0.7044 0.6817 and 0.6747 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

Fed Chairman Jerome Powell gave no policy guidance at Tuesday's panel discussion in Stockholm, and with other Fed officials saying their next moves will depend on the data, investors are very focused on the US CPI data. The dollar has weakened sharply in recent months on hopes that U.S. inflation is declining, which, along with some signs of pressure on the U.S. economy, is fueling expectations that the Fed is nearing the end of its rate hike program. In terms of energy, both the UK and the Eurozone have benefited from the fall in oil and gas prices, but with sanctions and price caps tightening on Russia, Russian retaliation could push energy costs up again. USD/JPY The USD/JPY pair is rising today and trading above 132.7500. What's more, the pair keeps its trade above 132.0000 for second day The current term of BoJ Governor Haruhiko Kuroda ends in April, and former Bank of Japan (BoJ) board member Sayuri Shirai has called for a review of the Bank's policies over the past 10 years in light of the changing inflation landscape. Moreover, the generally positive tone in the equity markets is weakening the safe haven of the Japanese yen and providing some support for the USD/JPY pair. In addition, broader risk sentiment will be taken into account for short-term trading opportunities around the USD/JPY pair. Read next: Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM AUD/USD The AUD/USD pair traded above the $0.69 level in the Asian and European sessions. Currently the Aussie pair is below 0.69, trading above 0.6880 at the time of writing The Australian dollar remains high, continuing to push towards the five-month high seen on Monday near 0.6950. Today's retail sales were 1.4% month-on-month in November, well above the forecast of 0.6% and -0.2% previously. The year-on-year figure to the end of November was 7.4%, not the expected 7.2% and 6.9% earlier. The data shows a downward correction in retail sales in early 2021, but an acceleration in November. Today, the monthly CPI for November was also released, with the headline CPI year-on-year printed at 7.4%, above estimates of 7.2% and 6.9% earlier. Markets are currently divided over whether the RBA will deliver another rate hike in February. China changed its Covid-19 policy in December and the reopening of the world's second largest economy could provide further opportunities for Australian exports. Frosty relations between Australia and China appear to be thawing, which could provide additional stimulus to the Australian economy. Source: investing.com EUR/USD The EUR/USD exchange rate maintains a steady upward trend after reaching a 20-year low of 0.9535 in September. EUR/USD regained traction and turned positive during the day near 1.0750. Currently, the pair is trading just below this level (1.0743) European Central Bank (ECB) Governing Council member Mario Centeno said late Tuesday that the current process of interest rate hikes may be coming to an end. As for the inflation outlook, Centeno noted that inflation may encounter some resistance in January and February before starting to decline in March. Nevertheless, these comments had no noticeable impact on the euro's valuation. The hawkish narrative was reinforced by one of the more aggressive officials in Isabel Schnabel, while ECB's Villeroy spoke in today's speech, stating the need for additional rate hikes in the coming months. Given this, higher relative rate hikes could support the strength of the euro over the next few months. Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM GBP/USD GBP/USD extended its downward correction towards 1.2100 during European trading hours on Wednesday. Improving market sentiment seems to be helping GBP/USD to contain losses for now. The Bank of England (BoE) is projected to move slightly slower than other central banks (e.g. ECB), given that the rate hike cycle started much earlier than the ECB. Source: finance.yahoo.com, investing.com, dailyfx.com

Australia's inflation report was released on Wednesday, which exceeded expectations of most experts. The consumer price index rose 7.3% in Q4 2022, with a forecast of 6.8% growth. Notably, in the third quarter, inflation showed signs of slowing (when the growth forecast was 7.4%, the indicator turned out to be at 6.9%). And in the fourth quarter analysts expected further development of this trend - but in fact the CPI returned to the level of the second quarter, thereby puzzling market participants. In addition, on Wednesday another equally important report was published in Australia, which reflected a significant increase in consumer activity. We are talking about retail sales, which rose by 1.4% month-on-month in November (with a modest forecast of 0.6%). This is the strongest growth rate since last March. For comparison, in the previous month the figure increased by only 0.4%. The data added to the fundamental picture for the pair, which is shaping up quite positively. The relevant news flow is mainly related to China, which abandoned its "zero-Covid" policy and resumed imports of coal from Australia. The reset in relations between Beijing and Canberra was appreciated by AUD/USD traders: in the first week and a half of 2023, the pair rose more than 200 pips to settle at the 69th figure area. Interest rate  Wednesday's inflation report, which is important in and of itself, also suggests that the Reserve Bank of Australia will continue to "quietly" tighten monetary policy parameters. The RBA has cut the rate of interest rate hikes to 25 points since last October, but assures markets that it is not going to pause the tightening of monetary policy. The resumed growth of inflation in the fourth quarter suggests that the issue of a pause is now finally off the agenda (at least in the perspective of the next meetings). Following the December meeting, RBA head Philip Lowe said that the central bank does not pursue a pre-planned course: in his words, the size and timing of future rate hikes "will be determined by incoming data and the outlook for inflation and the labor market. Another noteworthy phrase from the head of the RBA is that the Board's priority remains restoring low inflation and getting inflation back into the 2-3% range over time. Inflation report is unlikely to prompt the RBA to be more aggressive As we can see, so far inflation in Australia is moving in the opposite direction. Therefore, the likelihood of any pause at this point is close to zero. On the other hand, the latest inflation report is unlikely to prompt the RBA to be more aggressive (in the context of a return to the 50-point rate). Most likely, the Australian central bank will continue to raise the rate in 25-point increments, without risking to increase the rate due to possible side effects (relevant concerns were repeatedly voiced by the RBA representatives). In other words, the aforementioned report will not lead to any "revolutionary" changes, despite its greenback color. At the same time, this release has reduced to zero the probability of a pause in the RBA rate hike. That's enough for the aussie to keep trying to climb back up to the 70s. But so far the bulls' attempts to get closer to the main price barrier at 0.7000 are failing. During the two days the pair's bulls were assaulting the intermediate resistance level at 0.6930 (the upper line of the Bollinger Bands indicator on the daily chart), but each time they were back to their previous positions, to the base of the 69th figure. The reason for such indecisiveness is also caused by the inflationary report, only now it is the American one. US data Let me remind you that the US Consumer Price Index will be released at the beginning of the US session. According to most experts, the release will reflect a further slowdown in US inflation, reinforcing the discussion that the Fed may move to a 25-point rate hike. The likelihood of such a scenario materializing (at least in the context of the February meeting) has risen to 76% after last Friday's Nonfarm data. If inflation also disappoints traders, the probability of a 25-point rate hike in February will probably rise to 85-90%. The greenback will again come under pressure and bulls will have an excuse to make a march to the 70s. The alternative scenario But the alternative scenario (though unlikely, of course) is that inflation in the US will show growth contrary to what most experts predicted. In that case, the dollar bulls will assert themselves all over the market, especially in the light of the latest statements of the Fed representatives. Mary Daly and Raphael Bostick made some very hawkish remarks this week. Specifically, Daly said that the rate could be raised "by either 25 or 50 points" at the next meeting. Also, in her opinion, the final point of the current cycle would be in the 5.1%-5.25% range (that is, she was against lowering the upper bound). Bostick took a similar stance. Fed All this suggests that it is too early to write off the hawkishness of the Fed: if the inflation report surprises market participants with its greenback, the US currency will strengthen its position considerably. Again, this option is unlikely, but judging by the dynamics of the dollar pairs, traders do not risk to play against the greenback on the threshold of this release. AUD/USD Thus, at the moment the best option for the pair is to take a wait-and-see stand, because the key macro report of Thursday is hypothetically able to "redraw" the fundamental picture for all the dollar pairs.   Relevance up to 23:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332040

AUD/USD surrenders modest intraday gains and retreats below the 0.6900 mark in the last hour. The cautious market mood lends some support to the safe-haven buck and acts as a headwind. Bets for an additional RBA rate hike in February should limit losses ahead of the key US CPI. The AUD/USD pair struggles to capitalize on its modest intraday gains and fails near the 0.6925-0.6930 supply zone for the third straight day on Thursday. Spot prices retreat below the 0.6900 mark during the early part of the European session and refresh the daily low in the last hour, though the downside seems limited. The Australian Dollar might draw support from rising bets for an additional interest rate hike by the Reserve Bank of Australia (RBA) in February, bolstered by Wednesday's hotter domestic inflation data. In fact, the Australian Bureau of Statistics reported that the headline Consumer Price Index (CPI) re-accelerated to the 7.3% YoY rate - a 32-year-high - in November from the 6.9% in the previous month. Apart from this, subdued US Dollar price action could act as a tailwind for the AUD/USD pair, at least for the time being. The USD Index, which measures the greenback's performance against a basket of currencies, languishes near a multi-month low amid diminishing odds for a more aggressive tightening by the Fed. A slowdown in the US wage growth was seen as the initial sign of easing inflationary pressures, which could allow the US central bank to soften its hawkish stance. This leads to a further decline in the US Treasury bond yields and weighs on the buck. That said, the cautious mood helps limit any further losses for the safe-haven USD. Read next:Discussion Of Bank Representatives On Financing The Ecological Transformation | FXMAG.COM The anxiety ahead of Thursday's release of the latest US consumer inflation figures tempers investors' appetite for perceived riskier assets. This is evident from a softer tone around the equity markets, which is seen benefitting the greenback's relative safe-haven status and capping the upside for the risk-sensitive Aussie. Hence, the focus remains on the crucial US CPI report, due later during the early North American session.

Financial markets started Thursday with optimism putting some pressure on the US dollar, although activity remained subdued ahead of the release of the US Consumer Price Index (CPI). Traders, meanwhile, seem reluctant to place aggressive bets and prefer to wait for the release of US consumer inflation data on Thursday. The headline CPI is expected to rise by 6.5% in the 12 months to December, much better than previously at 7.1%, and further decline from a multi-year high of 9.1% recorded in June. Investors will pay particular attention to the underlying reading, which excludes fluctuations in food and energy prices. Core inflation peaked at 6.6% y/y in September, falling to 6% in November. A key US CPI report should clarify whether the Fed will need to raise its interest rate target above 5% to curb stubbornly high inflation. December inflation data from the US may significantly affect the valuation of the US dollar. Apart from inflation data, the US will publish preliminary jobless claims data for the week. USD/JPY The yen gained ground on Thursday amid expectations that the Bank of Japan will review the side effects of monetary easing. Due to the strengthening of the yen, USD/JPY fell to the level of 130.7030. Overall, the yen also indirectly benefited from the more dovish move markets are pricing in for the Federal Reserve. Markets are clearly pricing in a Fed turnaround that will come early after weaker US economic data earlier this month. The upcoming BOJ meeting, expectations of an upward revision of the bank's inflation forecast, and the imminent announcement of a new BOJ chairman are also likely to fuel expectations for a change in policy. Read next: The New Disney Drama: Disney Is Opposing Activist-Investor Nelson Peltz| FXMAG.COM EUR/USD The EUR/USD daily chart has seen an impressive series of green candles this year, extending its rally from deep below par that started in September 2022. EUR/USD keeps trading above 1.0750. On the “EUR” side, further interest rate hikes from the European Central Bank are expected. The bottom line is that expectations for future interest rate support will continue to favor the euro. GBP/USD The GBP/USD Pair lost the momentum of its rebound and dropped below 1.2150 ahead of Thursday's US session amid cautious market sentiment. The short-term technical outlook suggests that GBP/USD's bullish bias remains intact. What's more, the pound fell to its lowest level since late September on Wednesday as the rising euro hit a seven-month high amid hawkish messages from European Central Bank officials. AUD/USD In the Asian session, the pair traded above 0.69, only in the European session did it drop below this level. Currently, the pair of the Australian has regained strength and again trades above $0.6910 The Australian and New Zealand dollars rose on Thursday as markets assumed incoming US data would confirm a cooling in inflation, while Australia boasted a surprisingly large trade surplus amid falling imports. Local data showed how Australia continued to benefit from being a net exporter of resources when commodity prices were still relatively high. The country's trade surplus rose to A$13.2bn ($9.13bn) in November, well above forecasts. Source: dailyfx.com, finance.yahoo.com, investing.com

The latest inflation data in the US prompted a rally on Thursday, but it did not lead to a strong rise in stock indices. This is because market players remain worried of the Fed's monetary policy, which continues to be tight and is likely to end with interest rates above 5% this year. The report showed that consumer inflation continued to slow down in the US, with the year-on-year figure falling to 6.5% and the month-over-month data declining to -0.1%. Although Fed Chairman Jerome Powell did his best not to comment on the issue, some members of the bank showed hawkish rhetoric in their speeches, arguing for continued increases in interest rates. This is unclear stance is the reason why investors are holding back in markets. But there is another reason for the moderate market reaction, that is, the Q4 earnings reports from companies. Big US banks will release their data on this, which is likely to set the direction for markets. If they show good earnings and performance reports, yesterday's rally in the stock markets will continue, accompanied with a weakening of dollar. Of course, the uncertainty will remain in markets until the outcome of the Fed meeting on February 1. This means that until then, players will continue to debate on whether the Fed will go for a 0.25% rate hike and then pause or not. Forecasts for today: AUD/USD The pair is declining towards 0.6920. If this level holds, an attempt to rise to 0.7030 will happen. XAU/USD Gold tested the level of 1900.00 for the first time since May 2022. It could correct down to 1885.60, then return to 1915.80. Relevance up to 07:00 2023-01-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332206

The data from the US revealed that the Consumer Price Index declined by 0.1% on a monthly basis in December. The Core CPI, which strips volatile energy and food prices, was up 0.3% in the same period. Finally, annual Core CPI arrived at 5.7%, down from 6% in November, as expected. Although the US Dollar struggled to find direction with the initial reaction to the US inflation report, dovish comments from Fed officials triggered a sharp decline in the US T-bond yields and weighed heavily on the currency. Atlanta Federal Reserve Bank President Raphael Bostic said that he was comfortable with a 25 basis points (bps) increase at the next meeting. On the same note, Philadelphia Fed President Patrick Harker noted that it was time for future Fed rate hikes to shift to 25 bps increments. Dovish comments from Fed officials, however, made sure that investors continued to move away from the US Dollar. The latest Michigan Consumer Sentiment report showed consumer sentiment remaining low. Year-ahead inflation expectations fell to 4% from 4.4% while the five-year reading nudged a touch higher to 3% from 2.9% in December. USD/JPY USD/JPY started the week trading at 130.8020. Over the next days, trading was in the range of 131.50-132.50. The USD/JPY pair reached its highest level on Wednesday, a record high was set at 132.8370. After that, the pair began to fall below 130. The pair recorded a low just before the end of the trading week at 127.53, and ended the week just above the weekly low of 127.8340. The Japanese Yen ended last week on the front foot from both USD weakness driven by softening inflation in the U.S. as well as market hopefulness around a more aggressive Bank of Japan (BoJ). A change from the current ultra-loose monetary policy due to elevated inflationary pressures could be something that can take place next week. The Bank of Japan meets on January 18. EUR/USD For the EUR/USD pair, this week was in an uptrend. The pair started the week at 1.0669. And around 1.0660 it recorded its lowest weekly level. In the following days it was growing, exceeding the level of 1.07. On Thursday, the EUR/USD pair crossed the threshold of 1.08 and above this level reached the weekly maximum - 1.0870. The trade for the pair ended above 1.08 at 1.0828. European Central Bank (ECB) policymaker Martins Kazaks said there was no reason for markets to be betting on an interest rate cut. While the Fed is now widely expected to ease further policy tightening, ECB policymakers are scrambling to ensure markets understand their commitment to the hawkish outlook. GBP/USD The cable pair started the week at 1.2114 and finished much higher at 1.2234. GBP/USD traded the low for the week at 1.2097. The record high level in the week was reached by the pair at the level of 1.2242. GBP/USD has benefited from the broad-based selling pressure surrounding the US Dollar and reached its highest level since December 15 at 1.2250. The pair's near-term technical outlook suggests that the bullish stays intact. Gross Domestic Product Growth was 0.1% when the markets had been looking for a 0.2% contraction. However, as manufacturing and industrial production missed expectations. Interest rate support for sterling is likely to remain fitful as the economic numbers trickle out. Continued poor labor relations and the prospect of recession, possibly accompanied by a degree of ‘stagflation’ will keep the Pound a nervous bullish bet. AUD/USD The Australian pair started the week at 0.6901. In the following days, trading was in the range of 0.6865-0.6950. The lower border of the range was also the weekly low of the AUD/USD pair. The Aussie Pair's weekly peak traded close to the 0.70-0.6984 level. The pair finished trading near 0.70 at 0.6980 Source: finance.yahoo.com, investing.com

AUD/USD gains some follow-through traction on Monday and climbs to a fresh five-month high. Bets for smaller Fed rate hikes, a positive risk tone undermines the USD and offers some support. Looming recession fears cap the optimism and act as a headwind for the risk-sensitive Aussie. The AUD/USD pair kicks off the new week on a positive note and climbs to its highest level since mid-August during the Asian session. The pair, however, trim a part of its intraday gains and retreat below the 0.7000 psychological mark in the last hour. A combination of factors drags the US Dollar to a fresh seven-month low on Monday, which, in turn, acts as a tailwind for the AUD/USD pair. The US consumer inflation figures released last week showed that the headline CPI fell for the first time in more than 2-1/2 years in December. The data fueled speculations that the Fed may be nearing the end of its rate-hiking cycle and lifted bets for smaller rate hikes in February. This, along with a generally positive tone around the equity markets, continues to weigh on the safe-haven buck and benefits the risk-sensitive Aussie. The Australian Dollar draws additional support from rising odds for a further interest rate hike by the Reserve Bank of Australia (RBA) in February, bolstered by the upbeat domestic data released last week. In fact, the Australian Bureau of Statistics reported that the headline Consumer Price Index (CPI) re-accelerated to the 7.3% YoY rate - a 32-year-high - in November from the 6.9% in the previous month. Furthermore, Australian Retail Sales surpassed the most optimistic estimates and jumped 1.4% in November, while October's reading was also revised up to show a 0.4% growth. Read next: The Swedish Real Estate Market Will See Significant Price Drops| FXMAG.COM Market participants, however, remain worried about the economic headwinds stemming from the COVID-19 outbreak in China. Apart from this, the protracted Russia-Ukraine war has been fueling concerns about a deeper global economic downturn, which keeps a lid on the optimism in the markets. Traders also seem reluctant to place aggressive bullish bets around the AUD/USD pair amid a holiday in the US and ahead of the Chinese economic release, including the Q3 GDP print, on Tuesday.  

The dollar started the week on the back foot to a seven-month low against a basket of major competitors in Asian trading, with the yen in particular, as investors increased bets that the Bank of Japan would further improve its yield control policy. USD/JPY Year-on-year PPI by the end of December amounted to 10.2%, above the previous forecasts of 9.5% and 9.7%. The month-on-month figure for December was 0.5%, above 0.3% expected and 0.8% earlier. The data revealed upward revisions. From a macro perspective, the soaring PPI is problematic for corporate Japan, with companies facing a dilemma related to rising production costs. The upcoming central bank meeting, expectations of an upward revision of the bank's inflation forecast, and the imminent announcement of a new BOJ chairman are also likely to fuel expectations for a policy change. A generally positive tone around the equity markets undermines the safe-haven Japanese Yen and lends some support to the USD/JPY pair. Now the pair is above 128.20. Source: investing.com Source: finance.yahoo.com AUD/USD The AUD/USD pair started the new week on a positive note and climbed to its highest level since mid-August during the Asian session, surpassing the 0.70 level. Unfortunately, the Australian pair failed to hold above 0.70 and is now trading above 0.6970. Iron ore, Australia's main export, fell slightly on Monday but remains well above its low of last October. Tomorrow, China's GDP data will be watched closely for clues on the health of the world's second-largest economy. Higher commodity prices and China's quick re-opening from Covid restrictions have also supported the currency, with Australia's main trading partner partially lifting restrictions on Australian coal exports after an unofficial ban in 2020. Markets are currently divided over whether the RBA will make another rate hike in February. Read next: McDonald's Will Be Replaced In Kazakhstan By The Russian Vkusno & Tochka| FXMAG.COM EUR/USD EUR/USD showed a decent gain after breaking the critical resistance of 1.0840 in the Asian session. Although the EUR/USD pair failed to hold above 1.0840 and then dropped significantly, it has recovered and is trading above 1.0830. The publication of the expected decline in the US consumer price index (CPI) for December increased the chances of further slowing down the pace of policy tightening by the Fed. It is worth noting that in December the Fed announced a less hawkish monetary policy. The Fed raised interest rates by 75 basis points (bp), but after observing a significant decrease in inflation, it may change the scope of the increase. In the euro area, the European Central Bank (ECB) wants to reach the final interest rate faster. ECB Governing Council member and French central bank governor Francois Villeroy de Galhau, quoted last week, said the central bank should aim to reach its final interest rate by the summer. GBP/USD GBP/USD halted the correction, recovering to 1.2200 in the European session on Monday. The US dollar continues to rebound despite betting on smaller rate hikes by the Fed. Furthermore, a bank holiday in the US market could also keep volatility high around the GBP/USD pair with limited liquidity. Attention is now focused on the testimony of Bank of England (BoE) Governor Andrew Bailey before the Treasury Select Committee of the UK Parliament. Source: investing.com, finance.yahoo.com

AUD/USD is displaying topsy-turvy moves in a 0.6960-0.6978 range amid caution in the market mood. The formation of a Rising Channel indicates an upside trend in a limited territory. The Aussie asset has been overlapped by the 20-EMA, which indicates a consolidation added. The AUD/USD pair is displaying topsy-turvy moves in a tad wider range of 0.6960-0.6978 in the Asian session. The Aussie asset has turned sideways following the footprints of the US Dollar Index (DXY). The USD Index is showing a sideways profile amid uncertainty in the market after a stretched weekend. Also, strengthening US Treasury yields has trimmed investors’ risk appetite. The 10-year US Treasury yields have climbed to near 3.54%. Meanwhile, S&P500 futures are displaying a subdued performance amid caution in the market mood. AUD/USD is auctioning in a Rising Channel chart pattern on an hourly scale, which signals a continuation of the north-side trend in a marked boundary. On Monday, the Australian Dollar failed to keep the Aussie asset on the escalated levels after a failed breakout. The asset has been overlapped by the 20-period Exponential Moving Average (EMA) at 0.6964, which indicates a sideways auction ahead. Also, the Relative Strength Index (RSI) (14) is hovering in the 40.00-60.00 range, which adds to the volatility contraction filters. A decisive move above Monday’s high at 0.7019 will drive the Aussie towards August high at 0.7137. A break above August high will send the major toward June 9 high around 0.7200. On the contrary, a downside move below December 29 low at 0.6710 will drag the major further toward December 22 low at 0.6650 followed by November 21 low at 0.6585. AUD/USD hourly chart  

The US dollar is under pressure as the market seems to expect the Federal Reserve to ease its aggressive monetary policy later this year. USD/JPY The yen was close to a seven-month high as investors took a breather ahead of a potential change in policy at the Bank (BOJ). At the last meeting, the Yield Curve Control (YCC) program was changed, setting a range of +/- 0.50% around zero for Japanese government bonds (JGB) for up to 10 years. They previously targeted +/- 0.25% around zero. While they are not expected to change their prime interest rate, which currently stands at -0.10%, another change to the long-term yield target range is being discussed. Today, USD/JPY managed to break above 129 but failed to hold. The USD/JPY pair stabilized above 128.50. AUD/USD The Australian dollar jumped towards yesterday's six-month high against the US dollar, with China's GDP much better than forecast. China's GDP printed at 2.9% year-on-year in the fourth quarter versus expectations of 1.6% and 3.9% previously. At the same time, other Chinese data were released, and industrial production for the year to end-December was 1.3% instead of the expected 0.1%. On the monetary policy side, the local market favors a quarter-point hike from the Reserve Bank of Australia (RBA) to 3.35% in February, with some chance it could stop at its first meeting since May. Australian government bond yields remained stable, albeit close to last week's one-month lows. Monday's drop in the AUD/USD pair did not affect the prevailing uptrend. The pair of the Australian in the morning session was approaching the key level of 0.6975, the pair managed to exceed this level, but did not hold it and fell in the European session. Currently the Aussie Pair is trading above 0.6955. Read next: Alibaba And Its Share Buyback Program Which Is Supported By Ryan Cohen, Microsoft Corp. Plans To Incorporate AI Tools| FXMAG.COM GBP/USD The British pound edged higher on Tuesday after data showed a tight labour market and accelerating pay growth. GBP/USD trades above 1.2200, bouncing back from daily lows after the UK jobs report. The UK unemployment rate stabilized at 3.7% in November, while average hourly earnings rose more than expected. GBP/USD raises bids to reverse early-week pullback from monthly high. Broad US dollar pullback lays foundation for cable pair recovery ahead of key jobs report. Talks of Brexit labor shortages, UK labor strikes and British Prime Minister Sunak's difficulties are being explored by the GBP/USD bulls. The Bank of England is expected to raise interest rates at its tenth consecutive meeting on February 2 in an attempt to bring inflation down further. Today's UK employment data becomes more important for GBP/USD traders. The pair traded close to 1.2200 in both the Asian and European sessions and also fell below 1.2200. Currently, the cable pair is rising and trading above 1.2260 EUR/USD The latest German economic sentiment index, ZEW, rose in January, beating both last month's reading and market forecasts. The positive reading, the first since February 2022, points to "a notable improvement in the economic situation over the next six months" Today's ZEW release had little or no impact on the euro, which has been treading water against the US dollar so far. EUR/USD remains above 1.0800. The euro is expected to take center stage as the European Central Bank (ECB) aims to peak interest rates by the summer. The EUR/USD pair started Tuesday trading around 1.0830. In the European session it fell below this level. It managed to cross 1.0840 but dropped to around 1.0835 Source: investing.com, dailyfx.com, finance.yahoo.com

In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, extra upside remains likely in AUD/USD in the next weeks. Key Quotes 24-hour view: “AUD traded within a range of 0.6931/0.6997 yesterday, slightly narrower than our expected range of 0.6930/0.7000. Upward momentum has improved a tad and while the bias for AUD is to the upside today, a sustained advance above 0.7025 is unlikely. Support is at 0.6965, a breach of 0.6940 would indicate the current mild upward pressure has faded.” Next 1-3 weeks: “There is not much to add to our update from yesterday (17 Jan, spot at 0.6965). As highlighted, while the bias for AUD is still on the upside but without improvement in momentum, we continue to think that 0.7070 is unlikely to come into view so soon. On the downside, a break of 0.6915 (‘strong support’ level previously at 0.6890) would indicate that the AUD strength from more than a week ago has ended.”

Today the US releases data on retail sales and PMI indices, which are supposed to show support for inflation fading. USD/JPY At the two-day meeting, the BOJ unanimously maintained its YCC targets, set at -0.1% for short-term interest rates and around 0% for 10-year yields. The Japanese yen weakened by more than 2 percent in the wake of the Bank of Japan's monetary policy announcement in January. If the losses continue, this will be the best one-day performance for the USD/JPY pair. To understand why the yen weakened so quickly here, one has to go back to what happened in December. Last month, the central bank shocked the markets by widening the yield curve band around 0% to plus/minus 50 basis points. It was from +/- 25 bp. The central bank also increased asset purchases to 9 trillion yen each month from 7.3 trillion previously. The markets saw this as a move by the central bank towards normalizing policy. Therefore, investors were strongly focused on further corrections today. When this did not happen, these bets were voided. The USD/JPY pair strengthened and traded above 131. After this recovery, the pair began to fall to a level around 129.10. AUD/USD The Australian and New Zealand dollars gained on Wednesday on the retreating yen. The Australian jumped 2.0% to 91.36 yen. For now, the BJ's pledge to keep yields low has provided relief to global bond markets and the Australian 10-year yield fell 8 basis points to 3.57%. The main event of the week in the country will be data from the Australian labor market, which will be released on Thursday. The Austrailan pair (AUD/USD) has broken through the 0.70 level and is trading at 0.7020 at the time of writing Read next: Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM GBP/USD The British pound received support this morning after mixed inflation data. UK headline inflation fell as expected to 10.5%. UK consumer price inflation fell to a three-month low of 10.5% in December but remains close to 40-year highs. The core CPI reading, which excludes food and energy from the calculations, underscores the tense labor market conditions seen in yesterday's UK employment data, while the recent fall in energy prices has contributed to the decline in the headline figures. The BoE has raised interest rates nine times since December 2021 to try to bring down inflation, with markets currently evaluating an 82% chance of a 50 bp rate hike at its next meeting, scheduled for February 2. GBP/USD holds its gains above 1.2300 again, undisturbed by mixed UK CPI data amid fresh US dollar weakness. Today's UK employment data becomes more important for GBP/USD traders given the recent comments from Bank of England (BoE) governor Andrew Bailey, as well as the worsening conditions of the UK labor strikes. EUR/USD The EUR is one of the weakest contenders against the US Dollar, with EUR/USD pulling back sharply after testing the 1.0870 level. The rest of this week is quite sunny on the economic calendar, which tends to support existing trends. The EUR/USD pair fell sharply mid-session in the US despite significant US dollar weakness. The euro fell after market talks suggesting that representatives of the European Central Bank (ECB) are considering slowing down the pace of monetary policy tightening. Rumors suggest that CEO Christine Lagarde and company will decide to raise interest rates by 50 basis points in February. The comments of the European Central Bank's chief economist Philip Lane also influenced the euro, who said that in order to bring interest rates back to their target levels and bring inflation back to the desired level, it will be necessary to stop the tightening of monetary policy by the central bank. At the World Economic Forum EU officials have announced their intention to accelerate the energy transition with a series of fiscal measures that support technological innovation in the green energy space. The support is expected to include a state aid mobilization as well as a sovereignty fund to stop companies relocating to the US. Source: finance.yahoo.com, investing.com, dailyfx.com

The Australian dollar is taking the lead after markets collapsed yesterday due to the disappointing U.S. retail sales report - December sales were down 1.1%. And a divergence with the Marlin oscillator has formed on the aussie's daily chart. The price has already crossed the support level of 0.6917 and the signal line of the oscillator is about to move into negative territory. The nearest target is 0.6800. In case the price crosses 0.6730 and the MACD line, the decline will develop in the medium term. On the four-hour chart, the price settled under the MACD line, Marlin forcefully penetrated into the territory of the downtrend. The aussie's in a downtrend.   Relevance up to 03:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332695

On the daily chart for the AUD/USD commodity pair, two interesting things can be seen: 1. The appearence of Ascending Broadening Wedge pattern. 2.The deviation between price movement with Awesome Oscillator indicator. Based on the two things above, in the next few days AUD/USD has the potential to depreciate to the level of the area of 0.6750-0.6684 unless on its way to the level of that area AUD/USD suddenly reverses upwards and penetrates the level of 0.7127, then the downside scenario that has been described it will cancel by itself. Relevance up to 02:00 2023-01-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117911

AUD/USD bears poke previous monthly top during a two-day downtrend from five-month high. Australia jobs report bolstered case for slower rate hike from the RBA. US Treasury bond yields renew multi-day low even as downbeat data, hawkish Fedspeak renew recession fears. AUD/USD holds lower ground near the intraday low near 0.6890 as the previous monthly top probes the bears during the second loss-making day amid early Thursday in Europe. In doing so, the Aussie pair extends the previous day’s pullback from the highest levels since August 2022 amid a downbeat Australian employment report for August, as well as growing fears of recession. Australia’s headline Employment Change turned negative on a seasonally adjusted basis, printing -14.6K figure versus 22.5K expected and 64K prior. Further, the Unemployment Rate also rose to 3.5% compared to the market consensus of witnessing no change in the 3.4% previous readings. Elsewhere, softer prints of the US data and hawkish Fed talks renew economic slowdown fears and weigh on the sentiment, which in turn exert downside pressure on the risk-barometer AUD/USD pair. That said, US Retail Sales marked the biggest slump in a year while the Producer Price Index also dropped to the lowest level in six months during December. Further, St. Louis Federal Reserve's President James Bullard said US interest rates have to rise further to ensure that inflationary pressures recede. On the same line, President of the Federal Reserve Bank of Cleveland Loretta Mester praised the Fed’s actions to tame inflation. Further, Kansas City Fed President Esther George mentioned that the central bank must restore price stability, "that means returning to 2% inflation." Recently, Dallas Federal Reserve President Lorie Logan supported a slower rate hike pace but also mentioned possibly a higher stopping point. As the AUD/USD bears cheer the recession woes in the US, as well as fears of a less hawkish Reserve Bank of Australia (RBA) due to the downbeat Aussie jobs report, the pair traders ignore upbeat concerns surrounding China. Recently, Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF) said, “China could see a sharp recovery in economic growth from the second quarter onwards based on current infection trends after the dismantling of most COVID-19 restrictions.” Amid these plays, the S&P 500 Futures and Australia’s ASX 200 print mild losses while the US 10-year Treasury yields refresh a four-month low and the two-year counterpart drops to the lowest levels since early October at the latest. Looking forward, AUD/USD traders should pay attention to the risk catalysts, mainly the central bank speakers amid a light calendar, for clear directions as bears struggle to retake control.

Concerns about US growth due to recent shortages in US PPI and retail sales cast a shadow over the dollar. The Fed's hawkish speakers are being largely shunned by the markets at this point. USD/JPY The Japanese yen, long favored as a safe haven and funding currency, has become so embroiled in market speculation over central bank policy in recent weeks that Wednesday's status quo decision triggered the yen's biggest fall in nearly three years. In a bond market where the central bank battled bond bears to defend its yield cap, the BoJ bought up so many of the issued 10-year Japanese government bonds that market liquidity virtually dried up. Speculators focused on the yen instead. Until late last year, BJ's dovish stance in the face of aggressive rate hikes by the Federal Reserve and other major central banks meant the yen was cheap and weak, making it an ideal currency to borrow for investment. Today USD/JPY started the day at 128.55 but then dropped below 128. USD/JPY is now trading back at the level from the start of the day, above 128.50 AUD/USD The Australian dollar falls after the unemployment rate in December was 3.5% from 3.4%. The figures show that the labor market remains robust, even as the Reserve Bank of Australia raised the cash rate by 3% from its pandemic low. The bank has rolled back large rate hikes and the futures market has a 50-50 chance of a 25 basis point hike priced at the February 7 monetary policy meeting. Ahead of this meeting, the key CPI data for the fourth quarter will be released on Wednesday next week, January 25. The RBA said it expects growth to 8% later this year The AUD/USD pair extended an overnight sharp pullback from the 0.7060-0.7065 area, its highest level since Aug. 16, and remains under strong selling pressure for a second consecutive day on Thursday. The downward trajectory remains uninterrupted throughout the European session. The Australian pair is currently trading below $0.70 but above $0.6850. Read next: Elon Musk Is Facing Trial In Fraud Trial Over 2018 Tweets| FXMAG.COM GBP/USD GBP/USD consolidates losses below 1.2350 during Thursday's European session. GBP/USD pair is currently above 1.2330. On the UK front, inflationary pressures have eased, according to the December Consumer Price Index (CPI) report published on Wednesday. Headline inflation was lowered to 10.5% on an annualized basis and the core CPI, which excludes oil and food prices, remained stable at 6.3%. The magnitude of the drop in the inflation rate is not enough to convince market participants that inflation in the UK is falling in a promising way. Therefore, investors should prepare for the continuation of the extremely hawkish monetary policy of the Bank of England (BoE). The UK data schedule is empty on Thursday, however, and traders will have to content themselves with looking ahead until Friday, when consumer confidence figures for January and retail sales figures for December are released. Consumers are expected to be a little less optimistic than they were. EUR/USD European Central Bank (ECB) President Christine Lagarde's speech on Thursday will point investors to the likely monetary policy actions in February. Falling energy prices in the euro area have moderated inflation, but the current rate of inflation is still far from the median. Therefore, investors should prepare for a hawkish comment by Lagarde from the European Central Bank. European Central Bank (ECB) policymaker Francois Villeroy de Galhau said on Wednesday it was "too early to speculate what we will do in March". However, he believes that Lagarde's earlier forecast of 50 bp is still valid. EUR/USD holds gains above 1.0800 in European trading. The pair is supported by falling US Treasury yields. Source: investing.com, finance.yahoo.com

The Australian dollar has extended its slide on Thursday. AUD/USD is trading at 0.6884 in Europe, down 0.82%. Australian employment data disappoints Australia’s December employment report was weaker than expected, sending the Australian dollar sharply lower. The headline reading showed a loss of 14,600 in total employment, which may have soured investors. The release wasn’t all that bad, as full-time jobs showed gains of 17,600, with part-time positions falling by 32,200. The unemployment rate remained at 3.5%, but this was a notch higher than the forecast of 3.4%. On the inflation front, recent releases point to inflation moving higher. November CPI rose to 7.3%, up from 6.9%, and the Melbourne Institute Inflation Expectations climbed to 5.6%, up from 5.2%. We’ll get a look at the all-important quarterly inflation reading next week. Inflation came in at 1.8% q/q in Q3, and an acceleration in Q4 would force the Reserve Bank of Australia to consider raising rates higher and for longer than it had anticipated. The cash rate is currently at 3.10%, and I expect the RBA will raise it to 3.50% or a bit higher, which means we are looking at further rate hikes early in the year. The US dollar seems to take a hit every time there is a soft US release, and this week has had its share of weak data. The Empire State Manufacturing Index sank to -32.9, while headline and core retail sales both fell by -1.1%. PPI came in at -0.5%. All three releases were weaker than the November readings and missed the forecasts, indicating that cracks are appearing across the US economy, as the bite of higher rates is being felt. The markets are clinging to the belief that softer numbers will force the Fed to ease up on its pace of rate hikes and possibly end the current rate-cycle after a 25-bp increase in February. The Fed has done its best to dispel speculation that it will pivot, but I expect the US dollar to lose ground if key releases are weaker than expected.   AUD/USD Technical AUD/USD is testing support at 0.6893. Below, there is support at 0.6810 0.6944 and 0.7027 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

AUD/USD gains some positive traction on Friday, though lacks follow-through. The USD benefits from rebounding US bond yields and caps gains for the pair. A mildly positive risk tone might act as a tailwind for the risk-sensitive Aussie. The AUD/USD pair edges higher during the Asian session on Friday and recovers further from over a one-week low, around the 0.6870 region touched the previous day. The pair, however, trims a part of its modest intraday gains and is currently placed around the 0.6920-0.6915 area, up less than 0.15% for the day. The US Treasury bond yields build on the overnight recovery from a four-month low and lend some support to the US Dollar, which, in turn, acts as a headwind for the AUD/USD pair. The upbeat US macro data released on Thursday, along with fresh hawkish rhetoric from Fed officials, is seen pushing the US Treasury bond yields higher and underpinning the greenback. The markets, however, continue to price in a greater chance of a smaller 25 bps Fed rate hike in February. This should keep a lid on any meaningful upside for the US bond yields and the USD. Apart from this, a generally positive tone around the Asian equity markets could benefit the risk-sensitive Aussie and help limit the downside for the AUD/USD pair. Investors turn optimistic over a recovery in the world's second-largest economy after China kept its key lending rates at historic lows for a fifth straight month. The move indicates that the government plans to keep liquidity conditions loose in order to spur an economic recovery. This might hold back traders from placing bearish bets around the AUD/USD pair. Hence, it will be prudent to wait for strong follow-through selling before positioning for an extension of this week's sharp retracement slide from the highest level since mid-August. Market participants now look to the US Existing Homes Sales data, which, along with speeches by influential FOMC members, will drive the USD and provide some impetus to the AUD/USD pair

The dollar traded around seven-month lows on Friday as a plethora of data worries investors that an economic slowdown may be inevitable. Today's day in the economic calendar is quite calm, apart from the events from the economic forum in Davos and statements of the Fed (Waller, Harker). Next week, however, we'll get our first look at the US GDP figures, which are crucial to the outcome of the "soft landing" the Fed hoped for as it continued to tighten financial conditions to bring down inflation. Markets expected a smaller tightening from the Fed after US retail sales revealed their lowest level of activity in the last 12 months. USD/JPY The Japanese yen fell today despite the December CPI data. Further selling pressure around the Japanese yen lifts USD/JPY Pair to fresh daily highs. On the daily chart, USD/JPY is in an uptrend and is approaching 130.00. The 10-year Japanese government bond (JGB) yield fell below 0.40% today, well below the Bank of Japan's 0.50% ceiling that remained unchanged at its meeting earlier this week. GBP/USD The pound fell on Friday after weak retail sales data reminded investors about the gloomy outlook for the British economy. The cable pair started the day close to 1.24, but reports caused a weakening and a change of direction. The pair is currently trading below 1.2360. UK CPI data showed yesterday that there was an increase in inflation in services and an acceleration in food/beverage prices, which will be a cause for concern for decision makers at the Bank of England. The poor economic outlook in the UK fuels speculation that the BoE may be less hawkish on policy than previously expected. Retail volumes are down 1% since November, pointing to a challenging environment for consumers as the cost of living continues to be reduced. EUR/USD EUR/USD holds slight gains while trading above 1.0800 in European trading. The US dollar is trying to rebound alongside US Treasury yields, despite an improved risk profile. Looking ahead, EUR/USD traders should pay attention to ECB President Lagarde's speech and recent speeches from Fed policy makers. ECB's Lagarde reiterates that the central bank will continue to raise rates. The recent gains of the major currency pair can be linked to the broad weakness of the US dollar, as well as the optimism surrounding the old continent, namely the Eurozone. Today, the major currency pair EUR/USD traded mostly in the range of 1.0830-1.0847. Currently, the EUR/USD pair is below this range at 1.0820. Read next: $1 Million In Sanctions Against Former President Donald Trump, Netflix Co-Founder Reed Hastings Has Stepped Down As CEO| FXMAG.COM AUD/USD AUD/USD is down sharply for the second day in a row, and the risk of continued decline has increased with the pair below 0.6930. The sentiment-linked Australian dollar has underperformed its major counterparts over the past 24 hours. The Australian was weighed down by local data on Thursday, which showed Australian employment unexpectedly fell in December, spurring a bond rally as markets priced in a lower interest rate peak from the Reserve Bank of Australia. The focus is now on the quarterly inflation report next Wednesday. Economists expect consumer prices to increase by 7.5% in the fourth quarter of last year compared to last year. Source: investing.com, finance.yahoo.com, dailyfx.com

During the week we heard from a chorus of speakers at the Fed who raised the alarm about an interest rate hike and didn't wait for weaker and disinflationary data, the dollar could have been stronger. In the last trade, st. Louis Federal Reserve Chairman James Bullard spoke for the second time this week and said US interest rates must continue to rise to ensure inflationary pressures subside. USD/JPY The USD/JPY pair started the trading week at 128.07. On Monday, the pair was falling, so the pair recorded its weekly low on that day, below 128.00 at 127.2530. In the following days, the USD/JPY pair rose until it reached a weekly high of 131.45. USD/JPY did not stay above 130.00 and in the following days the pair fell. The pair closed the week at 129.5390. The Bank of Japan met this week remains unchanged. The governor of the Bank of Japan reiterated that the central bank will maintain its very loose monetary policy. The next meeting of the Bank of Japan is scheduled for March 9-10. GBP/USD It was a good week for the cable pair. The pound gained strength which helped the GBP/USD pair to rise. GBP/USD started the week at 1.2226. The weekly minimum at 1.2175 appeared at the beginning of the week on Monday and Tuesday. The cable pair peaked above 1.24 (1.2428), and the GBP/USD pair ended the week above this level (1.2401). UK retail sales figures revealed a monthly decline in both the report's "volume" and "value" metrics. After alcohol fueled the World Cup's economic recovery in November, British consumers decided to tighten their belts in December as the cost of living remained low. In the strike-hit month of December, consumers not only spent less but also bought fewer goods, which had negative readings on both accounts compared to November. Bank of England Governor Andrew Bailey had further comments on inflation and the market's view of where the final rate will be. Bailey reiterates earlier forecasts that inflation will fall significantly in 2023, but still well above the 2% target. Big Sterling impact events are few and far between next week and mostly include manufacturing PMI data. EUR/USD The main currency pair EUR/USD is holding steady in the week despite falls above 1.08. Also above this level it started and ended the trading week. The EUR/USD trading week started at 1.0828 and ended at 1.0858. The pair recorded a weekly low well below the 1.08 level at 1.0774, and the week's high came close to the 1.09 level at 1.0884. The next meeting of the European Central Bank is scheduled for February 2. ECB President Christine Lagarde said on Friday that the ECB will "keep the course" on raising rates as inflation remains too high. AUD/USD The Australian's pair started the week at .6979. Over the next few days, the AUD/USD pair traded above 0.6950 and rose until it reached a weekly high of 0.7059. It then declined until reaching a weekly low of 0.6875. At the end of the trading week, the Aussie Pair rebounded from the low to end the week at 0.6973. Source: investing.com, finance.yahoo.com

The AUD/USD pair has come under heavy pressure this week, following the release of the Australian labor market report. The release unexpectedly came out in the red zone, and the aussie made a new weekly low, sliding to 0.6876. However, we can say by the end of the week the bears couldn't take their successes, on Friday, the aussie regained some of the lost ground and got back to the 69th figure area. I note that the main "test" for the Aussie is yet to come – key data on inflation growth in Australia in the 4th quarter of 2022 will be published next week. If this report disappoints the AUD/USD bulls, then the implementation of bullish ambitions will have to wait: further growth of the pair will be possible only due to the weakening of the greenback. But today, all is not lost for bulls, although the "Australian Nonfarm" has significantly spoiled the fundamental background for aud/usd. Aussie lost an rally It should be noted that the Australian labor market has been a staunch ally of the aussie over the past few months. The unemployment rate gradually decreased during the first half of last year, and since June it has fluctuated in the range of 3.4% -3.5% (for comparison, we can say that the peak was recorded in October 2021 at around 5.2%). The growth rate of the number of employed has recently shown a positive trend (October and November should be especially noted in this context). Given the trends of recent months, no "trick" was expected from the December report: experts predicted a decrease in unemployment and an increase in the number of employed. However, the published release was, to put it mildly, controversial, and it is not at all surprising that the market interpreted it against the aussie. Traders focused their attention on the fact that unemployment remained at 3.5%, while according to forecasts, it should have fallen to 3.4%. The proportion of the economically active population unexpectedly dropped to 66.6% (although an upward trend was observed over the past three months). But most of all, the indicator of the increase in the number of employees was disappointing: the indicator came out at -14,600, despite the fact that experts expected to see a 27,000 increase. However, one point needs to be clarified here. The structure of this component indicates that in December the level of part-time employment significantly decreased (-32.200). While the number of full-time employees increased by 17,600, it is known that full-time positions offer a higher level of wages and a higher level of social security, compared to temporary part-time jobs. And yet, the "overall result" was against the aussie (especially since the 17,000th increase in full employment did not impress investors). Australian Nonfarm put a lot of pressure on AUD/USD. Bulls were forced to retreat from the key resistance level of 0.7000. All is not lost yet As a result of the trading week, bulls still managed to return to the area of the 69th figure. Therefore, the 0.7000 price barrier is still on the horizon. The inflation report, which will be published in Australia next week, can play a decisive role here. According to preliminary forecasts, the consumer price index in the 4th quarter will come out at around 1.8% in quarterly terms (in the 3rd and 2nd quarters, an increase of 1.8% was recorded). While in annual terms, an increasing trend can be recorded - experts predict growth to a record 7.5%. If both components of the release come out in the green zone, the Australian dollar paired with the US currency will again try to gain a foothold in the area of the 70th figure. Let me remind you that the Reserve Bank of Australia slowed down the pace of rate hikes to 25 points last fall - earlier than many central banks of the world's leading countries. Therefore, this issue was removed from the agenda a few months ago. However, in December, there were rumors on the market that the RBA might even pause in tightening monetary policy. And although representatives of the Australian central bank have repeatedly denied such intentions, the relevant rumors do not subside. And if inflation indicators in Australia show a downward trend next week, talk of a "dovish character" will again be on the agenda, especially against the backdrop of weak "Australian Nonfarm". Findings Despite the disappointing data in the labor market, it is still too early to write off the Australian dollar. A strong inflation report may well bring the aussie back to life, especially against the backdrop of a weakening greenback. If Australian inflation disappoints, then the bullish outlook for AUD/USD will depend solely on the US dollar. Given the high degree of uncertainty, before the release of the above-mentioned inflation report (Wednesday, January 25) for the pair, it is advisable to take a wait-and-see attitude.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332913

The Australian dollar is leading gains in the currency market. On Friday, it rose by 59 pips and this morning it has already gained 25 pips. A divergence is about to be broken on the daily chart. Visually, the price will overcome the divergence with growth above 0.7000. There is a 70% probability of success, but there is still a 30% probability of price reversal from the current levels. The growth target is the 0.7090-0.7130 range, a strong reversal and consolidation range from 2021. On the four-hour chart, the price is above the balance and MACD line, the Marlin oscillator is in the positive area. Cautiously expect growth to the specified target range.   Relevance up to 03:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332927

AUD/USD clings to mild gains after snapping four-week uptrend. Risk appetite remains positive amid talks of soft landing, policy pivot in the US. China’s week-long Lunar New Year holidays, pre-Fed blackout restrict immediate moves. Australia CPI, US Q4 GDP will be crucial for fresh impulse. AUD/USD seesaws around 0.6980-85 as it defends the week-start gains amid a sluggish Monday morning in Europe. In doing so, the Aussie pair remains mildly bid amid week-long holidays in China and the US Federal Reserve (Fed) policymakers’ stipulated off from the public appearances ahead of early February’s Federal Open Market Committee (FOMC) meeting. It’s worth noting that the receding hopes of the global recession, as well as growing chatters surrounding the Fed’s policy pivot, seems to underpin the bullish bias surrounding the risk barometer pair AUD/USD. Late the last week, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said that the global “outlook is less bad than we feared a couple of months ago.” On the same line, JP Morgan Chase & Co. spotted seven indicators to suggest easing economic slowdown fears. Further, the US National Association of Business Economics (NABE) recently released a survey saying, “The likelihood that the United States is already in recession or will fall into one this year has dropped over the past three months to 56% from a nearly two-thirds possibility,” per Reuters. Elsewhere, the Fed policymakers’ inability to convince of their hawkish bias, mainly due to the downbeat US data, joins optimism surrounding China to keep the AUD/USD buyers hopeful. Amid these plays, the US Treasury yields remain pressured around multi-day, fading the last few days’ corrective bounces, while the US stock futures print mild losses and the Asia-Pacific equities trade mixed. Given the lack of major data/events during the rest of the day, the AUD/USD pair may witness further grinding. However, Australia’s quarterly Consumer Price Index (CPI), up for publishing on Wednesday, will precede the US four-quarter (Q4) Gross Domestic Product (GDP) to entertain the pair traders. Technical analysis Bearish Doji on the weekly chart, that too exactly below the 200-SMA, teases AUD/USD bears.

USD/JPY takes the bids to refresh intraday high near 130.00 during early Monday in Europe as buyers keep the reins after taking positions at the eight-month low in the last week. In doing so, the Yen pair traces upbeat signals from the options market to lure buyers. That said, the one-month risk reversal (RR), the gauge of call options versus the put options, prints the strongest RR figures since late October 2022. That said, the one-month RR rose to the +0.820 level on the weekly basis at the latest, testing the highest bullish level since October 28, 2022. On the daily format, the RR printed mild gains around +0.185. Hence, the major options market players are bullish on the USD/JPY prices even if the pair is yet to portray a confirmatory rebound from the multi-day top. Also read: USD/JPY bears eye 129.00 on BoJ Minutes, focus on US GDP, Tokyo inflation

The US dollar fell today on the possibility of less aggressiveness from the Fed. Poor trading conditions are likely to continue as many major hubs in Asia are closed for Lunar New Year celebrations. Two very important data will be published in the US this week: first look at US GDP in Q4 on Thursday followed by Core PCE on Friday. USD/JPY The Japanese yen fell towards 130 to the dollar, moving further back from multi-month highs as the Bank of Japan remains committed to its ultra-low interest rate policy despite rising inflation and increasing market pressure. Last week, the central bank countered speculation about another policy adjustment by keeping interest rates very low and leaving its yield control policy unchanged. Meanwhile, traders are eyeing the BOJ meeting in March for a potential move as well as April when a new BOJ governor will step in. The USD/JPY pair started the week below 129.50, but rose quickly and passed the 130.00 level. At the time of writing, USD/JPY is trading at 130.3640. EUR/USD The euro hit a nine-month peak against the dollar on Monday as comments on European interest rates signalling additional jumbo rate rises contrasted with market pricing for a less aggressive Federal Reserve. The euro is also being supported by an easing of recession fears amid a fall in natural gas prices. ECB Governing Council member Klaas Knot said on Sunday: "expect us to raise rates by 0.5% in February and March, and that we will not be done by then, and the next steps will be taken in May and June." His colleague Olli Rehn he noted that he saw grounds for significant interest rate hikes. The ECB's hawkish expectations coupled with increased bets on a slowdown in the pace of US Federal Reserve (Fed) tightening are helping to reduce the monetary policy divergence between the two central banks, which in turn favors the EUR/USD pair's rally. EUR/USD pair has lost its traction and pulled away from the multi-month it set above 1.0900 earlier in the day. Read next: British Pub Earnings Will Suffer Significantly| FXMAG.COM GBP/USD Economic affairs in the UK are somewhat calmer with attention being paid to the current round of industrial action hitting the UK and the perceived unfreezing of UK-EU relations. The British currency recently fell 0.32% to $1.2359 and lost more against the euro. The core CPI, which excludes energy, food, alcohol and tobacco and which some economists consider a better guide to inflation trends, remained unchanged at 6.3%. Market prices point to a 70% chance of a 50 basis point rate hike at the Bank of England's February meeting. Sterling pulled back from a seven-month high against the dollar on Monday, which hit during the Asian hours. GBP/USD turned and fell towards 1.2350 during the European trading hours on Monday. AUD/USD The RBA did not rule out another rate hike at its February meeting as mentioned in previous minutes and remains divided between no change and a 25 basis point increase, Wednesday's inflation printout could bring more clarity. On a positive note for the Australian dollar, commodity prices are projected to remain elevated throughout 2023, mainly based on China reopening and coal exports to European countries. AUD/USD is hovering around 0.6980-85, defending early week gains on a weak Monday morning in Europe. The pair of the Australian failed to stay above $0.70, but is trading close to this level, so a re-breakout cannot be ruled out. Source: investing.com, finance.yahoo.com

The dollar traded near a nine-month low against the euro and lost its recent gains against the yen on Tuesday as investors weighed the risk of a US recession with the Federal Reserve's monetary policy outlook. USD/JPY The Japanese yen gained slightly against the US dollar today after Jibun Bank's composite PMI was 50.8 in January from 49.7 previously. The manufacturing component was the same as last month's 48.9, but the services component was 52.4, above the previous reading of 51.1. These are diffusion ratios, and an index above 50 is seen as positive for the economy. The dollar fell to 127,215 yen last week, the weakest since May, before the Bank of Japan's policy review, as investors assumed the BoJ would begin to end its stimulus program. However, the BJ left the policy unchanged, giving the dollar some respite. Analysts believe BOJ change will come sooner rather than later as policy makers make tweaks to their yield curve control mechanism. USD/JPY drops towards 129.00 but rebounded and trades above 130.00 again. EUR/USD The eurozone showed resilience in late 2022 with plenty of positive data that so far seemed to carry over to 2023. The hawkish rhetoric of ECB policymakers continues to strengthen the euro while optimism about avoiding recession is growing. The euro, on the other hand, gained almost 0.8% last week, which was boosted by a wave of officials from the European Central Bank. ECB President Christine Lagarde also reiterated on Monday that the central bank will continue to raise interest rates rapidly to curb inflation, which is still more than five times higher than the 2% target rate. PMIs in the euro zone were higher than expected. Only Germany's Manufacturing PMI fell from 47.1 to 47.0. EUR/USD lost grip and fell towards 1.0850 after the release of mixed PMI data from Germany and the euro zone. Ahead of the US S&P Global PMI survey, the US dollar index has been stable above 102.00. The EUR/USD pair is trading close to 1.0870 at the time of writing. Source: investing.com GBP/USD The British pound was lower on Tuesday after data showed economic activity weakened further in January, underlining the risk that Britain could slip into a recession in 2023. After an impressive December services PMI report, markets were hoping for another encouraging reading in January given a slightly brighter outlook now that inflation seems to be headed in the right direction. This was not to be the case as the new year brought with it a sustained decline in private sector business activity in the UK. The flash UK PMI Composite was 47.8 (December: 49.0). lowest in 24 months. In contrast, the UK industrial production index was 46.6 (December: 44.4). The highest in 6 months. UK Services PMI Business Activity Index at 48.0 (December: 49.9). The Bank of England is still expected to raise its key interest rate for the tenth consecutive time on Feb. 2 after its next scheduled meeting. The cable pair also lost amid emerging reports. GBP/USD pair trades below 1.2400 again and is now at 1.2318 AUD/USD The Australian dollar was nearing a five-month high from last week at 0.7063 as the US dollar comes under increasing pressure. While the CPI is the main target of the RBA's mandate of targeting 2-3% over the business cycle, the Producer Price Index (PPI) may also play a role. The PPI will be released this Friday and if it accelerates in the fourth quarter, it could be a problem for CPI this quarter. Companies face higher costs. It's also worth noting that the Australian and New Zealand dollars hit multi-month highs on Tuesday as investors refocused on risky assets, easing recession fears and a less aggressive Federal Reserve. The pair of the Australian Dollar, despite not maintaining previous imports, remains above 0.70. The Aussie Pair is currently trading at 0.7023. Source: investing.com, fiance.yahoo.com, dailyfx.com

The Australian dollar successfully maintains its role as the market leader. Yesterday, it rose 17 pips, this morning the aussie gained 46 pips to reach the bottom of the target range at 1.7090-0.7130. A consolidation above the target range will open the target at 0.7284 (June 2022 high), so now there is a tussle at the current levels, and the bears may lose another two figures. The divergence on the daily chart is already broken, so it's up to the price. There is an uptrend at the four-hour chart: the price is rising above both indicator lines, the Marlin oscillator is rising in the uptrend area, there are no early signs of a reversal. Perhaps such signs will appear in the 1.7090-0.7130 range.   Relevance up to 03:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333159

Summary:  Equity markets lose steam and trade cautiously ahead of the Fed’s preferred inflation gauge. The S&P500 closes above it 200-day average for the second day - a sign there are more bulls in the market than bears, but Tesla's results could rock the boat. Australian and NZ CPI blow hotter than expected. Gold is on the cusp of a bull market. Oil slides, investors buy the dip ahead of the EU ban on Russian oil. Oil prices make their biggest drop in 3 weeks; some investors see this as opportunity Equity markets lose steam and trade cautiously ahead of the Fed’s preferred inflation gauge   US equity markets were a bit dull on Tuesday with investors weighing up mostly stronger than expected Microsoft earnings results, vs a weaker than expected earnings from chipmaker giant, Texas Instruments. The S&P500(US500.I) fell 0.1% but closed above it 200-day average for the second day (a sign there are more bulls in the market than bears), while the Nasdaq 100 (NAS100.I) lost 0.2%. Still markets are waiting for the next major catalysts; Tesla’s results on Wednesday, then later in the week the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) price index for December to gauge if the Nasdaq’s rally of 11% from its low can be sustained, especially as the PE for the Nasdaq is about 54.6 times earnings; meaning tech stocks are still quite expensive compared to their averages. The risk is if Core PCE doesn’t fall as expected from 4.7% QoQ to 3.9%, then we could see a selloff in equity markets, while the US dollar would be bought as hotter inflation supports the Fed keeping rates higher for longer. However, the S&P500 is seemingly bullish for now, until the next tests (some of which we mentioned), click for an in depth Technical Analysis on what the next levels could be for the S&P500. Mixed Microsoft (MSFT) result has shareholders relived as cloud sales rise more than forecast; a sign the business could stand tall amid the murky year ahead After hours Microsoft (MSFT) shares gained 4.3% with investors relieved its revenue in constant currency rose 7% in the quarter, versus the 6.59% estimate. Microsoft’s closely watched Azure cloud-computing business, sales gained 38%, compared with predictions for a 37% increase, excluding the impact of currency fluctuations. This underscores Azure’s ability to help drive the company forth, even as sales of Windows software to PC makers plummeted amid a slumping market. Adjusted earnings per share came in at $2.32, slightly better than the $2.30 estimate, thanks to the cost cutting. Capital expenditure was $6.27 billion, less than Bloomberg estimated ($6.63 billion), while revenue slightly missed expectations hitting $52.75 billion vs the $52.93 billion estimate. Commodities see red on profit taking, while gold nudges up on the cusp of a bull market   Oil dropped, with WTI falling $1.8% below $81 after as OPEC+ are expected to keeping oil production unchanged when they meet next week as they await clarity on Chinese demand and the impact of EU’s ban on Russian supply (from Feb 5). Copper declined 0.2% with investors booking profits after the copper prices gained 32% from their low. Traders bought into Wheat, lifting the Wheat price up 2% as its trades at year lows. While Gold nudged up 0.4%, taking its total rally off its low to 19.5%, meaning gold is on the cusp of a bull market. Be mindful that we also think gold could also face profit taking, or a consolidation. Ole Hansen, head of commodity strategy discusses that here.  Australia CPI came out hotter than expected. Focus is on oil’s biggest drop in 3 weeks with some investors buying the dip  After Australia’s ASX200(ASXSP200.I) rallied for five straight days, the market fell like a knife on Wednesday after CPI came out hotter than expected supporting the notion that the RBA can keep rates higher for longer, despite the services sector remaining in contractionary phase. You have to remember Australian CPI has now on numerous occasions been hotter than expected. So given the market is up 16% from its low, we are seeing traders and investors book in profits ahead of the public holiday tomorrow and ahead of next week's RBA decision. Oil stocks such as Santos, Woodside, WorleyParsons, Ampol trade lower but some longer term investors would be seeing this pull back as an opportunity to buy the dip. Why? Oil prices remain supported ahead of EU’s ban on Russian oil coming up (Feb 5), which will restrict oil supply, plus we’re seeing APAC air travel rev up and this is expected to continue over the medium term; which is also driving demand for diesel and underpinning oil demand. In FX the Aussie dollar is on the cusp of a key event   The Aussie dollar vs the US (AUDUSD) trades at its highest levels since August, 70.64 US, after AU CPI came out showing prices are up 7.8% YoY, vs 7.6% expected. Core mean CPI rose 6.9% YoY, also hotter than the 6.5% expected. This means the RBA has more fire power to keep rising rates, despite the services sector remaining in a contraction (with a reading of under 50). If the AUDUSD's 50 day simple moving average crosses above the 200 day, marking a ‘golden cross’, we could see a quick run up to 0.7137, the August peak. It’s also worth watching the AUDEUR as bullish momentum could see the pair on the weekly chart cross over its 100-day moving average. - Stay tuned to Saxo's inspiration page for trading and investing ideas, as news breaks.  For a global look at markets – tune into our Podcast. Source: Video: Oil prices drop, some investors buy the oil dip. AU & NZ CPI hotter than expected | Saxo Group (home.saxo)  

AUD/USD takes the bids to rise to a fresh high since August 2022. A clear upside break of previous resistance from November, bullish MACD signals favor buyers. Nearly overbought RSI (14), multiple hurdle since June 2022 challenge immediate upside. AUD/USD bulls cheer the strong Aussie inflation data as the quote renews the five-month peak near 0.7115 during early Wednesday. In addition to the upbeat prints of the quarterly Australia Consumer Price Index (CPI) and Reserve Bank of Australia Trimmed Mean CPI, the Aussie pair’s ability to successfully cross an ascending trend line from November 15, around 0.7095 at the latest, also favor the bulls. It’s worth noting that the bullish MACD signals add strength to the upside move. However, a horizontal area comprising multiple levels marked since June 2022, around 0.7130-40 restricts appears a strong resistance for the AUD/USD pair traders. Adding strength to the stated hurdle is the overbought condition of the RSI (14). Should the Aussie pair stays comfortably beyond 0.7140, the odds of witnessing the pair’s run-up toward the mid-2022 peak surrounding 0.7285 can’t be ruled out. Alternatively, intraday sellers could take entries in case the AUD/USD price drops below the resistance-turned-support line near 0.7095. Read next: The Aussie Pair Is Above 0.70$, GBP/USD Pair Lost Its Level Of 1.24$| FXMAG.COM Even so, the previous weekly high near 0.7065 and the last Thursday’s low near 0.6870 may test the AUD/USD bears. It should be noted that the 61.8% Fibonacci retracement level of the pair’s June-October 2022 downside and the 200-DMA, respectively near 0.6855 and 0.6815, appear the last defense of the pair buyers as a clear of the same might confirm the bearish trend. AUD/USD: Daily chart Trend: Limited upside expected

The dollar gained on Wednesday during limited trading. Traders broadly expect the Fed to raise interest rates by 25 basis points next Wednesday, down from the 50 bp hike in December. Earlier, investors will look at the US economic growth data for the fourth quarter, which will be released on Thursday. Moreover, a drop in global energy prices and a resulting slowdown in inflation in advanced economies has spurred speculation the Fed and other central banks might soon stop raising interest rates. USD/JPY Spot prices struggle to capitalize on the move and held steady at 130.00 through the early European session. USD/JPY is trading below this level. EUR/USD The chances of a bigger interest rate hike by the ECB are growing rapidly. As reported by Bloomberg, ECB policymaker Gediminas Simkus reiterated on Tuesday that the ECB should continue raising interest rates by 50 basis points in the face of mounting wage pressure. The euro gained thanks to optimism about the euro zone's economic prospects. As for the future of the euro, economists at CIBC Capital Markets said the improving macroeconomic situation and further policy tightening by the ECB herald the strength of the euro in 2023. During the Asian trading hours, the EUR/USD pair rose until it broke above the 1.0900 level. The momentum fails to sustain and the pair trades below that level at around 1.0870. Read next: The Department Of Justice's Lawsuit Against Google | FXMAG.COM AUD/USD The Aussie pair is gaining strong positive traction for the fourth day in a row and is recovering from 0.7100 for the first time since mid-August during the Asian session on Wednesday. The Australian dollar rose to a more than five-month high on Wednesday after higher-than-expected inflation data, bolstering the case for further interest rate hikes. Australian headline inflation (CPI) continues to pick up, as does the preferred trimmed CPI, on both a month-on-month and year-on-year basis. Australia is set to benefit from the Chinese reopening now that the Chinese government has stated that the nation has already reached a peak in infections and hospitalization rates. The reopening has resulted in increased purchases of Australia’s top export, iron ore, as prices have trended higher. The daily AUD/USD chart shows this pair in an uptrend. The pair managed to record gains over the course of three consecutive days. The AUD/USD pair performed well in the early stages of 2023, driven in large part by the continued downtrend of the dollar. Today, the pair gained above 0.7100, but failed to hold and is below this level again. GBP/USD Details of the UK Producer Price Index (PPI) for January may be of interest to GBP/USD investors ahead of Thursday's key US Q4 GDP and next week's Fed meeting. Sterling fell against the dollar and euro on Wednesday after data showed British manufacturers unexpectedly lowered prices in December, suggesting inflation could be easing ahead of next week's Bank of England policy meeting. The news that UK factories have lowered prices is likely to ease the burden on Bank of England policymakers who need to consider how far to raise interest rates in the fight to bring down inflation. The market expects the BoE to raise interest rates for the tenth time since late 2021 as it fights inflation. Markets are currently evaluating a 75% chance of a 50 point rate hike. The cable pair is still trading below 1.2400, close to the 1.2300 level. Source: finance.yahoo.com, investing.com

AUD/USD seesaws around five-month high, up for the fifth consecutive day. Hong Kong’s upbeat return after five-day holidays, Tesla earnings underpin favor firmer sentiment. Strong Aussie inflation renewed talks of RBA’s 0.25% rate hike versus previous chatters of policy pivot. US Q4 GDP, PCE Price data will be crucial for clear directions ahead of next week’s FOMC. AUD/USD clings to mild gains above 0.7100 as bulls take a breather after refreshing the five-month high during early Thursday in Europe. That said, the Aussie pair traders cheer Hong Kong’s resumption of trading after five days, as well as hawkish hopes of the Reserve Bank of Australia (RBA) after the previous day’s strong Aussie inflation data. However, a cautious mood ahead of the first readings of the US fourth quarter (Q4) Gross Domestic Product (GDP) seems to challenge the quote’s upside. Additionally probing the AUD/USD buyers is the Australia Day holiday. Hong Kong’s equity benchmark Hang Seng leads the Asia-Pacific gainers with above 2.0% gains by the press time even if markets in Australia, India and China are closed. The reason for the upbeat sentiment could be linked to the market chatters suggesting strong holiday spending in China. Elsewhere, the reversal in the previous talks of the RBA’s policy pivot, especially after the upbeat Aussie Q4 and monthly Consumer Price Index (CPI) data, also underpins the AUD/USD pair’s upside moves. As per the latest market chatters, the odds favoring the RBA’s 0.25% hike are back on the table after a brief absence. It should be noted that the upbeat performance of Tesla jostles with Microsoft’s risk-negative headlines to offer a mixed move to the S&P 500 Futures and challenge the risk-barometer AUD/USD pair. However, the downbeat US Treasury bond yields and the broad US dollar weakness ahead of the key data keep the buyers hopeful. Looking forward, the US Q4 GDP and Personal Consumption Expenditure (PCE) Price data will be important for the immediate direction. Also crucial will be the US Durable Goods Orders and trade data for December. That said, the downbeat expectations from the scheduled US data keep the pair buyers in the driver’s seat but a positive surprise could trigger a notable reaction ahead of the next week’s Federal Open Market Committee (FOMC) meeting. Also read: US Gross Domestic Product Preview: Three reasons to expect a US Dollar-boosting outcome Technical analysis Higher highs on RSI (14) contrast with the lower high on AUD/USD prices and challenge the current bullish trend. As a result, multiple highs marked since June 2022, near 0.7140 will be the key to watch. Also read: AUD/USD Price Analysis: Steadies around 0.7100 amid hidden bearish RSI divergence

The Bank of Canada's interest rate decision appears to have put sentiment risk back as markets hope other central banks will follow suit. The BoC announced a pause in interest rate hikes to assess the impact of the recent hikes on the Canadian economy. Given that the BoC was the first major central bank to raise interest rates, market participants seem to see yesterday's announcement as a sign that the Federal Reserve and the ECB may follow suit. The dollar fell to an eight-month low against its peers on Thursday as a dismal US corporate earnings season fueled recession fears ahead of many central bank meetings next week. The Fed's policy-setting committee will begin a two-day meeting next week and markets have priced in a 25 basis point (bp) rate hike, down from the central bank's 50bp and 75bp hikes recorded last year. USD/JPY The Japanese yen gained against the US dollar on Wednesday, taking advantage of the US dollar's significant weakness. Despite minor recent changes by the Bank of Japan towards policy normalization, the BoJ remains the most dovish developed central bank. USD/JPY is down for the third day in a row and touches a new weekly low around 129.00 during the Asian session on Thursday. Fresh speculation that high inflation could lead the Bank of Japan (BoJ) to be more hawkish later this year continues to support the JPY. Bets were lifted by data released last week that showed Japan's nationwide core inflation hit 4% in December - its highest annual print since December 1981. Although USD/JPY fell in the Asian session, in the European session the pair gained and traded close to 129.90. AUD/USD Trade was a bit weak as Australia was closed for the holidays. The Australian dollar's rally against the US dollar is gaining momentum on the back of rising optimism over China's reopening and rising commodity prices. AUD/USD has been trading nicely in an uptrend since October. Earlier this month, the pair rose above a key resistance. The Australian pair is doing quite well and trading above 0.7100 during the European trading session. EUR/USD EUR/USD continued its gains from yesterday, holding above 1.09 after opening in Europe. The euro gained strength against the dollar yesterday as the domino effects of the Bank of Canada's interest rate decision swept through the market. ECB Governing Council member Gabriel Makhlouf said on Wednesday: "We must continue to raise interest rates at our meeting next week - taking a similar step to our December decisions," and added that the same should happen at the next March meeting. EUR/USD remains stable at around 1.0900 during the European session. Traders refrain from placing new EUR/USD bets ahead of critical US GDP releases. Read next: Musk Intends To Cut Costs In Tesla On Everything| FXMAG.COM GBP/USD The Bank of England is set to raise interest rates by half a point to 4.0% to tackle double-digit inflation, while markets are split on how much further rates will rise beyond that. Britain's inflation rate moved further away from October's 41-year high. Meanwhile, the risk of the UK slipping into recession continued to weigh on sentiment after the latest PMI survey showed the UK business economic activity fell. GBP/USD is struggling to extend previous highs at around 1.2400 during European trading hours. The US dollar is licking its wounds with weaker US Treasury yields amid dovish Fed betting. Source: investing.com, finance.yahoo.com, dailyfx.com

AUD/USD has initially consolidated in the 0.7090-0.7130 range - the body of Thursday's daily candle is fully within this range. The signal line of the Marlin oscillator starts to turn down. It is quite possible that the Australian dollar, the leader of the current week, is tired of growth and turns down from the current levels. It is possible that the price will go above the reached range, but the Federal Reserve meeting will be held on Wednesday, and in case this meeting has a hawkish tone, the US dollar will attack on all the financial fronts, and the AUD/USD pair will not reach the target level. In fact, we will get a typical false price exit above the technical resistance. On the four-hour chart, the price consolidates in the 0.7090-0.7130 range, the Marlin oscillator is in a position of having two interpretations: the formation of a small divergence (possible decline, a small correction), the decrease in the signal line of the oscillator as a discharge of the oscillator before its further growth. Further price growth as development of the current uptrend is possible once the price settles above 0.7130. The reversal may occur only when the price crosses the MACD indicator line (0.7063). This mark coincides with the local low of January 25 (gray oval).     Relevance up to 03:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333405

Investors have turned risk-averse ahead of the US PCE Price Index data. The formation of an Ascending Triangle indicates sheer volatility contraction. The RSI (14) has shifted into the 40.00-60.. range, which indicates an exhaustion in the upside momentum. The AUD/USD pair has corrected sharply to near 0.7100 in the early European session. The Aussie asset has sensed selling pressure as investors have turned risk averse ahead of the release of the United States Personal Consumption Expenditure (PCE) Price Index data. Meanwhile, an improvement in the safe-haven’s appeal has strengthened the US Dollar Index (DXY). S&P500 futures has demonstrated a sell-off as further interest rate hikes by the Federal Reserve (Fed) might accelerate recession fears. The 10-year US Treasury yields has added gains further to near 3.53%. On an hourly scale, AUD/USD is oscillating in an Ascending Triangle chart pattern that indicates a sheer contraction in volatility. The upward-sloping trendline of the chart pattern is plotted from January 25 average price at 0.7061 while the horizontal resistance is placed from January 26 high around 0.7140. The 20-period Exponential Moving Average (EMA) at 0.7110 has overlapped the asset, which indicates a rangebound acution profile. Read next: Trump Returns To Social Media, Meta Will Restore The Former President's Account| FXMAG.COM It is observed that the Relative Strength Index (RSI) (14) has shifted into the 40.00-60.00 range from the bullish range of 60.00-80.00, which conveys that the bullish momentum has faded now. Should the asset breaks above January 26 high at 0.7142, Aussie asset will deliver a breakout the Ascending Triangle, which will drive the major towards the round-level resistance of 0.7200. A breach of the latter will expose the asset for more upside toward June 3 high at 0.7283. On the contrary, a downside move below December 29 low at 0.6710 will drag the major further toward December 22 low at 0.6650 followed by November 21 low at 0.6585. AUD/USD hourly chart

The dollar strengthened on Friday, moving away from multi-month lows against the euro and sterling as investors began to focus on the many important central bank meetings next week. The US Federal Reserve, European Central Bank and Bank of England are due to make interest rate decisions next week as they assess what policy adjustments may be needed to fight rampant inflation in a challenging global economic environment. In today's expected audience session, the core US PCE data for December will be released. This is the Fed's preferred measure of inflation and price pressures are expected to ease further. USD/JPY Annual inflation in Japan's largest city, Tokyo, continues to climb, with the base rate hitting 4.3% in January, the highest level in more than four decades. The USD/JPY pair in the European session is trading close to 130.00, at 129.96. Earlier, the couple managed to break the level of 130.00 but failed to maintain it. The couple is waiting for the publication of the US PCE report. EUR/USD The US dollar draws support from the mostly upbeat US macro data released on Thursday, which in turn is seen as a key factor putting some pressure on EUR/USD. Expectations for a more hawkish nature of the European Central Bank (ECB) should additionally contribute to limiting deeper losses. It is worth recalling that several ECB officials supported additional interest rate hikes in the coming months to fight stubbornly high inflation. Today European Central Bank (ECB) President Christine Lagarde is set to speach. The frequency of Lagarde's speeches in recent times has almost reduced her impact on the financial markets and the euro, which leads me to believe that today's forecasts may not have a significant impact. However, the market's attention will remain focused on key risks related to the central bank's events next week. The Fed will announce its policy decision at the end of its two-day meeting on Wednesday. This will be followed by the ECB monetary policy meeting on Thursday, which in turn will play a key role in determining the next stage of the EUR/USD directional move. The EUR/USD pair broke above 1.09 in the morning but fell again. Currently, the EUR/USD pair is trading in the range of 1.0875-1.0880. Read next: Ukraine Is Calling For More Sanctions Against Russia| FXMAG.COM GBP/USD Given the volatility of the market, the GBP/USD pair may witness a further sideways move ahead of the US PCE price index for December. British Finance Minister Jeremy Hunt's willingness to accelerate growth is unimpressive to GBP/USD buyers as the Chancellor defends his position on a tax hike despite heavy criticism from other Conservatives. Alternatively, the growing calls for Brexit solutions, at least from Irish diplomats, appear to be helping the GBP/USD pair bearish. Investors expect the British economy's slowdown to end the Bank of England (BoE) tightening cycle soon. The Cable pair (GBP/USD) broke above 1.24 at the beginning of the day, but similarly to the EUR/USD pair, it failed to hold and fell. Currently, the GBP/USD pair is trading in the range of 1.2360-1.2370. AUD/USD The Australian dollar, tied to sentiment, rose cautiously on Thursday after US GDP data boosted Wall Street's risk appetite. In the fourth quarter of 2022, the US economy grew by 2.9% q/q. This is more than the consensus of 2.6%. The Australian dollar traded at around $0.71, hovering near its highest in almost eight months as rising inflation in the country fueled bets on further central bank policy tightening. Annual inflation in Australia rose 7.8% in December, the largest increase since 1990 and above market forecasts of 7.5%. The Aussie pair is holding above 0.7100 despite having dropped earlier. Source: investing.com, finance.yahoo.com, dailyfx.com

eur to usd, eur usd, eur/usd, convert eur to usd, 1 eur to usd, eur vs usd, 100 eur to usd, euro to usd, what is euro?, what is dollar?, what is us dollar? US equities rallied on Thursday, boosted by a decent rally in Tesla and Chevron stocks, and a better-than-expected GDP read in the US.   The latest US GDP update was a strong beat. The US economy grew 2.9% in Q4, down from 3.2% printed a month earlier, but significantly better than the 2.6% penciled in by analysts.   But be careful! The US growth number was good, but not necessarily for good reasons.   Inventory adjustments and government spending were the main boosters of the GDP in the latest quarter, while domestic purchases increased just around 0.2%, down from 2% printed in Q1.   Plus, the housing sector took a massive 27% hit on annual basis, business inventories grew around 0.6% versus 6% printed a quarter earlier, and trade with other countries was good, but not because Americans exported more, but because they imported less.   In summary, the latest GDP data was boosted by government spending and inventory adjustments, but the growth engines, which are consumption and investment - that hint at the health of the future economy did quite poorly.   So what do you make of the data?  In one hand, slowing demand is great news for the Fed because their aggressive tightening policy hammers demand, and that should further ease inflation and further soften the Fed's policy. And all that, with the weekly jobless claims headed further down as a sign that the jobs market is still not feeling the pinch of the higher rates and the slower demand – although IBM announced it will cut 3900 jobs, and SAP 3000 this week. But oops, IBM is down 4.5% after the news. Too bad.  On the other hand, weaker demand is not great news, as it means that your favorite companies will be selling less stuff and will be making less money.   But there is always this hope that the Chinese could fill in the gap this year, thanks to the pandemic savings that will be flowing into the stuff that Chinese like to buy the most in the coming months. In this sense, Burberry and Swatch shares look nothing less exciting than the tech stocks during the pandemic. And that despite the war and a global cost-of-living crisis.  Focus on US PCE  The US will reveal another gauge of inflation, the PCE data, that is closely watched by the Federal Reserve (Fed). A slower than expected core PCE would be a cherry on top for closing a week where the S&P500 rallied past its 2022 bearish trend top, and which could soon confirm a cup and handle pattern above the 4100 mark.  But beware, Intel slumped 10% in the afterhours trading after revealing a worse-than-expected quarterly loss due to a steeper than expected fall in PC chip sales, and giving a weaker-than-expected forecast for the current quarter.  Aussie shines  The US dollar is better bid on the back of a strong GDP report, while gold is down from the $1950 resistance.   The EURUSD is again below the 1.09 mark, while Cable consolidates below 1.24, with a clear resistance forming into the 1.2450 mark.   The AUDUSD on the other hand extends gains above 71 cents level as the heated inflation report this week boosted the Reserve Bank of Australia (RBA) hawks. The 50-DMA crossed above the 200-DMA, confirming a golden cross formation on the daily chart, while the market remains strongly short the Aussie, meaning that if the Aussie gains further momentum to the upside, we could see a short covering that could further emphasize the bullish trend.   

The Australian dollar is almost unchanged on Friday, trading at 0.7112. Australia’s PPI slips Just a day after Australian CPI unexpectedly rose, the Producer Price Index went in the opposite direction. PPI in the fourth quarter slowed to 5.8% y/y, down from 6.4% in Q3 and below the consensus of 6.3%. On a monthly basis, PPI fell to 0.7%, much weaker than the gain of 1.9% in Q3 and the forecast of 1.9%. The RBA has raised rates sharply but inflation is yet to peak. The CPI release for Q4 was a shocker, rising to 8.4% after a 7.3% gain in Q3. The markets had priced in a peak rate of 3.6%, but with the cash rate currently at 3.1% and more rate hikes on the way, it appears that the market is underestimating the terminal rate. The Australian dollar has been on a tear, rising around 10% since Nov. 1. The outlook for the Aussie remains bright, both for domestic and global reasons. At home, the RBA will continue to raise rates in order to curb inflation. Abroad, China has reopened and that will increase demand for Australian exports. As well, commodity prices are high which is good news for the export sector and the Australian dollar. Will the US be able to avoid a recession? The answer isn’t clear, as the economic data shows a mixed picture. The employment market remains robust and overall growth has been positive, with GDP for Q4 coming in at 2.9%. Manufacturing and Services PMIs continue to show that these sectors are contracting and housing has been especially weak, as it lowered Q4 GDP by about 1.3%. Consumer spending, which accounts for some 68% of GDP, could determine whether the US economy tips into a recession or not. Consumer spending rose 2.1% in Q4, down slightly from 2.3% in the third quarter. However, the December release is worrying, as consumer spending declined by 1.1%. If the Fed is to guide the economy to a soft landing, retail sales will have to rebound strongly. Read next: The Aussie Pair Is Holding Above 0.7100, The Major Currency Pairs Are Waiting For US PCE Report| FXMAG.COM AUD/USD Technical There is resistance at 0.7160 and 0.7256 0.7064 and 0.6968 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The US dollar was flat in trading this week. Next week's economic calendar is filled with high-impact events such as the Fed on Wednesday or the BoE and ECB on Thursday. And if the major central banks aren't enough, there will be an NFP report on Friday, and given the stance taken by the Fed on Wednesday, this jobs report could be even more important than usual as the FOMC monitors the data for signs of a slowdown from massive rate hikes from last year. USD/JPY USD/JPY started the trading week at 129.2700. Then it increased and exceeded the level of 130.00. On Tuesday, USD/JPY crossed the 131.00 level and recorded the highest trading level of the week at 131.0650. The level above 131.00 was not maintained and the pair fell below 130.00 again. Following this decline, USD/JPY hit a week-high trading low close to 129.00, 129.0400 to be exact. The pair then increased and broke above 130.00 again, but USD/JPY failed to hold above that level and ended the week at 129.8000. GBP/USD The Cable pair (GBP/USD) started the week trading quite high at 1.2399 and rose to a week high of 1.2446. The GBP/USD pair then declined and hit a trading low of 1.2274 on Tuesday. After that, the GBP/USD pair rose and traded above 1.2350. The cable pair ended the week just below 1.2400 at 1.2395. The British pound is gearing up for the week ahead which includes the Bank of England (BoE) and Federal Reserve interest rate decisions respectively. The BoE suggested another hike of 50 basis points, which is confirmed by prices in the money market. At the last meeting the majority voted for 50 bp, but taking into account new economic data, votes may be divided between 50 bp and 25 bp. The BoE is likely to remain unchanged - this would likely cause a bearish reaction on the pound. EUR/USD The major pair (EUR/USD) is holding above 1.08 and this week's trade was extremely favorable for the pair. The EUR/USD pair started the week trading at 1.0874. The EUR/USD pair then rose. Weekly trading was mostly above the 1.0860 level. EUR/USD peaked above 1.09 at 1.0930. The week's trading low for the pair was below 1.0850, while the EUR/USD record low was at 1.0841. EUR/USD ended the week at 1.0874. The market's attention will remain focused on the key risks related to the central bank's events. The Fed will announce its policy decision at the end of its two-day meeting on Wednesday. This will be followed by the ECB monetary policy meeting on Thursday, which in turn will play a key role in determining the next stage of the EUR/USD directional move. AUD/USD The Australian pair (AUD/USD) performed best on Wednesday in the major currency pairs. AUD/USD started the week trading at 0.6971. Then the Aussie pair rose and passed the 0.70 level, maintaining this level in the following trading days. On the first day of trading, AUD/USD traded below 0.70 and thus recorded the lowest trading level of the week at 0.6965. The highest trading level of the Australian pair was above 0.7100, at the level of 0.7138. The Aussie Pair finished the week just above 0.7100. Australia’s annual inflation jumped 7.8% in the December quarter, the biggest increase since 1990 and above market forecasts of 7.5%. The strong reading was more than twice the pace of wage growth and cemented expectations that the Reserve Bank of Australia will hike interest rates by 25 basis points in February. Source: investing.com, finance.yahoo.com

AUD/USD comes under some selling pressure on Monday and hits a fresh daily low in the last hour. A weaker tone around the equity markets is seen exerting pressure on the risk-sensitive Aussie. Bets for smaller Fed rate hikes keep the USD depressed and should help limit losses for the major. The AUD/USD pair attracts some sellers following an early uptick to the 0.7120 area on Monday and remains on the defensive through the early European session on Monday. Spot prices drop to a three-day low, around the 0.7075 region in the last hour, though any meaningful downside still seems elusive. A softer risk tone - as depicted by a weaker trading sentiment around the equity markets - is seen as a key factor driving flows away from the risk-sensitive Aussie. Despite China's move to scale back its strict zero-COVID policy in December, the worst yet COVID-19 outbreak in the country has been fueling uncertainty about a strong economic recovery. This, in turn, tempers investors' appetite for riskier assets and keeps a lid on any optimism in the markets. The downside for the AUD/USD pair, meanwhile, is likely to remain cushioned, at least for now, amid subdued US Dollar price action. In fact, the USD Index, which tracks the Greenback against a basket of currencies, languishes near a nine-month low amid firming expectations for a less aggressive policy tightening by the Fed. The markets seem convinced that the US central bank will soften its hawkish stance and expect a smaller 25 bps rate hike on Wednesday. Read next: A Loss Of $48 Billion In Shares Of The Indian Group Adani As A Result Of The Hindenburg Research Report| FXMAG.COM The bets were lifted by Friday's release of the US Personal Consumption Expenditures (PCE) data, which showed that the Core PCE Price Index fell to the 4.4% YoY rate in December from the 4.7% previous. That said, other US macro data released recently pointed to a resilient economy and backed the case for the Fed to maintain its hawkish stance for longer. Hence, the focus will remain on the outcome of a two-day FOMC meeting, which might provide cues on future rate hikes. Heading into the key central bank event risk, traders might refrain from placing aggressive bets and prefer to move to the sidelines. Apart from this, rising odds for an additional rate hike by the Reserve Bank of Australia (RBA) in February could underpin the Australian dollar and help limit any meaningful corrective pullback for the AUD/USD pair. This makes it prudent to wait for strong follow-through selling before confirming that spot prices have topped out.

The dollar weakened on Monday to near an eight-month low ahead of a series of central bank meetings this week. The US Federal Reserve is likely to continue to ease the pace of monetary policy tightening at its upcoming meetings and plans to raise interest rates by 25 basis points at its next two policy meetings. USD/JPY USD/JPY pair struggled to hold significant gains above the psychological 130.00 level. The strength of the yen was limited by dovish comments from the BoJ president. BoJ Governor Kuroda continues to maintain his lenient stance on monetary policy. This comes as investors grow optimistic that rising inflation will result in a hawkish move away from the BoJ. Any further hawkish change from the BoJ seems unlikely with Governor Kuroda at the helm and could happen when the governor steps down in April. Driven by the risk associated with key central bank events, investors seem reluctant to bet on an aggressive bear market around the USD/JPY pair. In addition, comments from BoJ chairman Kuroda Haruhiko that the central bank must continue its easing policy and keep the inflation target at 2% limit the gains for the JPY. USD/JPY Pair started the week at 129.8040 and then increased. Currently, the pair is holding above 130.00. EUR/USD Higher Spanish inflation data supported the euro. The euro surged above $1.09 in late January, hovering around its highest level since April last year as investors awaited multiple central bank meetings this week as they digested stronger than expected Spanish inflation figures. The European Central Bank is due to raise interest rates by 50 basis points on Thursday, bringing borrowing costs to their highest level since 2008, while investors will also be on the lookout for signs of slowing the pace of monetary policy tightening at its March meeting. Read next: Glovo Planned To Lay Off 250 Workers Worldwide, The Middle East Is Already Suffering From A Water Shortage| FXMAG.COM EUR/USD pair gained traction and climbed above 1.0900 during the European session, but failed to hold and fell to 1.0893. GBP/USD The cable price (GBP/USD) was similar to the EUR/USD rate, i.e. it rose above 1.24 in the European session, but it did not hold and fell to 1.2384. The slight selling pressure around the US dollar ahead of key central bank policy announcements this week appears to be helping the pair push higher. GBP/USD traders can expect interest rate decisions from both sides of the pair this week, with the US Federal Reserve and Bank of England expected to make February moves on Wednesday and Thursday respectively. The Bank of England is to raise its base rates by half a percentage point. That would take them to 4%, the highest level since the 2008 financial crisis, with further increases expected. However, there have been some objections to the interest rate setting by the Monetary Policy Committee and it seems that a smaller hike is still on the table. AUD/USD AUD/USD prices have fallen to a three-day low of around 0.7075 in the last hour, although any significant drop still seems elusive. The Aussie pair has lost its momentum above 0.7100 but is not falling significantly and is trading at 0.7076. The Australian remains supported by expectations of further policy tightening from the Reserve Bank of Australia amid soaring inflation and China's swift reopening after Covid restrictions have boosted the global economic outlook. Australia's annual inflation rose 7.8% in December, the RBA has already raised the cash rate by a total of 300 basis points at eight consecutive meetings in 2022, bringing borrowing costs to a 10-year high of 3.1%. Source: investing.com, finance.yahoo.com, dailyfx.com

The Australian dollar lost 47 points yesterday, it led losses, but technically there are no signs of a trend reversal yet. We just assume that the price broke off from the MACD indicator line, and now it is about to do that. There is a chance that the price will meet the MACD line near its intersection with the support level of 0.6873 (low of January 19, low of August 5, 2022). The aussie fell this morning due to weak retail sales in December, which were down 3.9% vs. the forecast of -0.3%. A little later, the Chinese manufacturing activity index for January of 50.1 points against December's 47.0 points stopped the AUD/USD decline. On the four-hour chart, the price settled below the MACD line. Also, the price overcame the support of the local low of January 25 (gray oval). The Marlin oscillator is in the area of the downtrend. We wait for the results of tomorrow's Federal Reserve meeting.   Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333684

Summary:  Markets see red on concern FAANG’s will bite into markets, while there is worry the Fed won’t cut rates this year like the market expects, this has resulted in traders booking profits ahead of end of month. Commodities see short term pull back risks, with prices already down from fresh peaks; oil is down 5.6%, iron ore, copper and aluminium lose 2% ahead of the Fed meeting. While Australian shares hold steady, defying negative leads from Wall Street. In FX the US dollar picks up, pushing most currencies off course, with the Aussie dollar down 0.8%. What's the short vs long term narrative. Markets see red on concern FAANG’s will bite into markets, while there is worry the Fed won’t cut rates this year as markets has priced in Ahead of the Fed, ECB, and BOE meeting this week, for the first time in 2023, with the central banks potentially setting the course of interest rates for the year, risk management resulted in traders and investors booking profits ahead of end of month, which dragged the S&P500(US500.I) down 1.3% and the Nasdaq 100 (NAS100.I) 2.1%. The worry is that the market believes the Fed will only hike by 0.25% this week and 0.25% next month. Two and done, before cutting in July. There is also a risk the Fed says it has “more work to do”, which could send equities into a tailspin. Our view is given financial conditions have improved, and there is a 20% chance of a recession, the Fed can keep rates higher for longer. This is why we think there could be a short term potential correction, so potentially consider taking profits and buying downside optionality (puts), and consider tight stops. Secondly, the worry is that major tech company earnings will continue to slump, with average overall  earnings down 0.3% this quarter, across the 145 of the S&P500 companies. This is why profit taking in Facebook, Apple, Amazon and Google parent Alphabet is occurring ahead of them reporting results. Ultimately, we think their outlooks could set the tone for equities this year. Consider FAANG names like Facebook/Meta are up 61%, Apple is up 10%, Amazon is up 20% and Google’s parent Alphabet is up 12% from recent lows. Click here for more on US earnings. Read next: Major Currency Pairs Are Waiting For Central Banks Decisions, USD/JPY Pair Rose Above 130.00, | FXMAG.COM Commodity short term pull back risk – with prices already down from fresh peaks; oil down 5.6%, iron ore, copper and aluminium lose 2% ahead of the Fed   On Monday oil dropped 2.4%, while most commodities lost almost 1%, with the markets awaiting further evidence China is picking up demand - just as BHP, Rio and FMG alluded to in their quarterly results. It seems traders are torn between real demand physically rising, but awaiting the Fed’s decision this week, which could result in the US dollar spiking, that would ultimately pressure commodity prices down. So these factors raise the risk of a short-term correction across the board. That said, resources prices have been really strong up 17-70% on from their lows. In 2023 alone iron ore and copper are up 9%, Aluminium up 11%, spot gold up 5%. However, with commodity prices falling, it also raises the alarm that Aussie dollar and the Aussie share market could be at risk of a short term correction or consolidation as well. The key is to watch the US dollar index. However keep in mind, over the longer term, commodity prices are supported higher, underpinned by rising demand over course of the year, and lower physical supply. For more on commodities, see Saxo’s Commitments of Traders report, that highlights broad buying slowed in recent weeks. Australian shares hold steady, defying negative leads from Wall Street. Australian retail sales fall off a cliff, borrowing falls Australia’s share market, as measured by the ASX200(ASXSP200.I) opened 0.3% higher today at 7,501 defying the futures and US markets negative lead. Not only are Australia shares outperforming US shares this year, but also UK’s FTSE. However, given materials prices could be at risk of a shorter term pull-back, it’s worth pointing out the technical indicators suggest the ASX200’s uptrend is weakening. Our Technical Analyst suggests a possible short term correction down to 7,167 should not be ruled out. However, over the longer term, we think upside in the ASX200 is intact with mining companies to report some of the strongest earnings on record, and provide their strongest outlooks in several years amid China reopening. For stocks, ETFs and baskets to watch, click here.  In company news today, Gold Road Resources (GOR) reported a drop in production in the prior quarter and higher costs due to inflationary pressure, but guided for higher grades in 2023. This follows Oz Minerals (OZL) also guiding for higher costs, which paints a picture of what we can expect for full year earnings season next month. In economic news, retail sales fell 3.9% in December, shocking the market, which expected sales to only decline 0.3%. On top of that, borrowing data also missed expectations. Borrowing rose 0.3% in December, vs consensus expecting lending to rise 0.5%. Today’s data is telling as it shows interest rates have taken effect on the consumer, and supports the market thinking that the RBA could potentially pause and then cut rates later this year.   In FX the US dollar picks up, pushing most currencies off course The US dollar index has bounced up off it low and risen 0.5% and pressured most currencies lower, with the Aussie dollar (AUDUSD) falling 0.8% from its high, with the Aussie buying 0.7061 US. The Aussie against the US has fallen under its 200-day moving average, while there is caution the Fed’s Wednesday’s decision could cause the US dollar to rise. Should the Fed only hike by 0.25% as expected and guide for one more hike, or if the Fed mentions its hikes have been effective, or that it sees interest rates having a lag effect, then the AUDUSD could potentially rally back up. Supporting longer term upside in the Aussie is the rise of China’s economy and commodity buying. From a technical perspective, the bulls may like to hear the 50 day moving crossed above the 200, indicating the longer term rally could remain intact, despite the RSI indicating, there are currently more sellers right now, than buyers.  Stay tuned to Saxo's inspiration page for trading and investing ideas. For a global look at markets – tune into our Podcast.   Source: Video: Will FAANGs results bite into markets and what if the Fed says it won’t cut rates this year, like the market thinks | Saxo Group (home.saxo)

AUD/USD drops to a one-week low on Tuesday and is pressured by a combination of factors. Disappointing Australian Retail Sales figures weigh on the Aussie amid a modest USD strength. Bets for smaller Fed rate hikes keep a lid on the buck and might help limit losses for the major. The AUD/USD pair remains under some selling pressure for the second straight day on Tuesday and extends its recent pullback from the highest level since June 2022 touched last week. The downward trajectory drags spot prices to a one-week low, below mid-0.7000s during the early European session and is sponsored by a combination of factors. The Australian Dollar is weighed down by the disappointing domestic macro data, which showed that Retail Sales tumbled in December. Apart from this, a modest US dollar strength turns out to be another factor exerting some downward pressure on the AUD/USD pair. The prevalent cautious mood is seen driving some haven flows towards the greenback and undermining the risk-sensitive Aussie. The market sentiment remains fragile in the wake of the uncertainty about a strong recovery in the Chinese economy, amid the worst yet COVID-19 outbreak in the country. This, to a larger extent, offsets the better-than-expected Chinese PMI prints for January and does little to impress traders or provide any immediate respite to the China-proxy Australian Dollar, at least for the time being. Read next: Toyota's Transition To Electric Will Come With A Change In CEO| FXMAG.COM The USD uptick, meanwhile, lacks bullish conviction amid rising bets for a smaller 25 bps Fed rate hike move at the end of a two-day policy meeting on Wednesday. This, along with the flight to safety, leads to a modest downtick in the US Treasury bond yields and acts as a headwind for the buck. This, in turn, warrants some caution before positioning for any further downfall for the AUD/USD pair. Traders might also prefer to move to the sidelines ahead of the critical FOMC monetary policy decision on Wednesday. In the meantime, Tuesday's US economic docket, featuring Chicago PMI and the Conference Board's Consumer Confidence Index, will be looked upon for some impetus. This, along with the broader risk sentiment, could drive the USD and produce short-term opportunities around the AUD/USD pair.

The US dollar was on an upward trend against its major trading partners early Tuesday ahead of a busy schedule of data releases for markets. The Fed is coming soon. The US central bank is expected to raise interest rates again to fight inflation. However, fears seem to be growing that the price of victory here may be a recession. USD/JPY The Japanese yen (JPY) continues to be supported by fresh speculation that high inflation could lead the Bank of Japan to adopt a more hawkish stance later this year. Also, the overall weaker tone around stock markets further reinforces the safe haven for the JPY. This, along with the underlying bearish sentiment around the US dollar, puts some downward pressure on USD/JPY. The pair lost in the earlier trading hours but is trading above 130.10 again. EUR/USD The euro fell to USD 1.08 in the last session of January, but remains close to nine-month highs. Investors await the ECB's monetary policy decision on Thursday, with the central bank expected to raise interest rates by 50 basis points, bringing borrowing costs to their highest level since 2008. At the same time, data indicating an unexpected growth in the euro area in Q4 2022 by 0.1%, beating market forecasts of a decrease of 0.1%, and fresh CPI data for France and Spain, showing an increase in inflation in January, gave hope that The ECB will soon end its tightening cycle. On the negative side, retail sales in Germany fell by 5.3%MoM in December, much worse than expected. The EUR/USD pair has been falling since the morning, even significantly in the European session, but remains above 1.08 and trades at 1.0850. Read next: The Government Pension Fund Global Suffers Losses| FXMAG.COM GBP/USD The cable continued its decline in the early hours of the Asian session, falling below the 1.2350 level. GBP/USD saw a slight rebound to trade just above the 1.2350 level heading into the European open where the dollar bull returned pushing GBP/USD towards the 1.23000 handle. The GBP/USD pair remains under bearish pressure and is currently trading at 1.2321. The rally on the GBP/USD pair appears to have lost momentum, however, given the key risk events, the move could be due to market participants repositioning ahead of the storm. With the focus on central banks, there is still a real possibility of a policy divergence between the FED and the BoE, which should benefit the cable in some way. The Fed is expected to raise interest rates by 25 basis points while the Bank of England by 50 basis points as it fights persistent inflation. ING strategists said they expected BoE's decision to have a broadly neutral impact on the pound against the dollar. AUD/USD AUD/USD remains under strong selling pressure for the second day in a row on Tuesday and drops to more than a week low ahead of the North American session. The Australian dollar fell towards $0.70, retreating further from recent highs after data showed the country's retail sales fell much more than expected in December as heightened inflationary pressures and higher interest rates dampened consumer spending. Still, Australians are supported by expectations that the Reserve Bank of Australia will continue to fight inflation, expectations for a 25 basis point rate hike in February and China's swift reopening after Covid restrictions have boosted the global economic outlook. Source: investing.com, finance.yahoo.com, dailyfx.com

It has been a rough start to the week for the Australian dollar. AUD/USD has dropped 0.68% on Tuesday and is down 1.36% on the week. In the European session, the Australian dollar is trading just above the 0.70 line. Australia’s retail sales sink Retail sales for December were dismal, with a reading of -3.9% m/m, compared to the consensus of -0.3%. This was down from the 1.7% gain in November and marks the third decline in four months. It was the first decline in 2022 and the Australian dollar has responded with sharp losses. The silver lining is that retail sales are traditionally weak in December and the strong November read was a sign that consumers did their Christmas shopping early in order to take advantage of Black Friday discounts. The sharp drop in consumer spending is another sign that cost of living pressures are taking a toll on consumers. Strong consumer spending has enabled the Reserve Bank of Australia to continue raising rates in order to tame inflation. The RBA will not be pleased with the latest retail sales data but it still expected to go ahead next week with a modest 25-basis point increase. The cash rate is currently at 3.10% and the markets are estimating that the peak rate will rise to somewhere between 3.6%-3.85%. This means that more hikes are on the way after February, but the pace of the rates will be data-dependent, especially on inflation reports. The Federal Reserve concludes its 2-day meeting on Wednesday, and a 25-bp increase is priced at close to 100%. This doesn’t preclude volatility in the currency markets, as a hawkish stance from the Fed, either in the rate statement or in comments from Jerome Powell, could provide a boost to the US dollar. The markets continue to talk about a rate cut late in the year due to the weakening US economy, but the markets could be in for a nasty surprise if the Fed reiterates that high rates are here to stay and there are no plans to cut rates. Read next: AUD/USD Pair Remains Under Strong Selling Pressure, The EUR/USD Pair Has Been Falling But Remains Above 1.08$| FXMAG.COM AUD/USD Technical AUD/USD is putting pressure on support at 0.7000. The next support line is 0.6890 0.7071 and 0.7181 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

AUD/USD gains some follow-through traction on Wednesday amid a modest USD downtick. Bets for smaller rate hikes by the Fed continue to weigh on the buck and lend some support. The cautious market mood might cap gains for the risk-sensitive Aussie ahead of the FOMC. The AUD/USD pair builds on the previous day's goodish rebound from the 0.6985 area, or over a one-week low and gains some follow-through traction on Wednesday. Spot prices climb to the 0.7075 region during the early European session, though any subsequent move up is more likely to remain capped ahead of the key central bank event risk. The Federal Reserve (Fed) will announce its decision at the end of a two-day meeting on Wednesday and is expected to further moderate the pace of its rate-hiking cycle. Bets for a smaller 25 bps lift-off were cemented by the US wage growth data released on Tuesday, which showed that labor costs increased less than expected in the fourth quarter. The recent US macro data, however, point to a resilient economy and back the case for the Fed to stick to its hawkish stance for longer. Hence, the focus will remain glued to the accompanying policy statement and Fed Chair Jerome Powell's comments at the post-meeting press conference. Investors will look for cues about the Fed's future rate-hike path, which will play a key role in influencing the US Dollar price dynamics and determining the near-term trajectory for the AUD/USD pair. In the meantime, a modest USD downtick is seen acting as a tailwind for the major and contributing to the intraday positive move. That said, a softer risk tone - as depicted by a mildly negative sentiment around the equity markets - might hold back bulls from placing aggressive bets around the risk-sensitive Aussie. This makes it prudent to wait for a strong follow-through buying before confirming that the AUD/USD pair's pullback from the highest level since June 2022 has run its course. Traders now look to the US macro data - the ADP report, ISM Manufacturing PMI and JOLTS Job Openings - for some impetus.

As investors price the Fed nearing the end of its rate hike cycle, the dollar index is far from its 20-year high of 114.78. Investors said Fed Chairman Jerome Powell's words would be watched closely. Aside from the main event of the Fed meeting, investors will also focus on the ISM manufacturing and job vacancies data due for release on Wednesday for further guidance on the state of the US economy and labor market. Moreover, the ECB and the Bank of England are expected to raise interest rates by 50 basis points (bps) on Thursday. USD/JPY USD/JPY has struggled to gain any significant traction and has fluctuated between small gains and small losses throughout the early part of Wednesday's European session. Spot prices remain below mid 130.00 as investors appear reluctant and eagerly await outcome of two-day FOMC meeting. USD/JPY pair trades below 130.00, at 129.7970. Driven by the risk associated with key central bank events, investors seem reluctant to bet on an aggressive bear market around the USD/JPY pair. In addition, comments from BoJ chairman Kuroda Haruhiko that the central bank must continue its easing policy and keep the inflation target at 2% limit the gains for the JPY. EUR/USD On Tuesday, flash readings of gross domestic product (GDP) in the euro zone in the fourth quarter (Q4) increased by 0.1% q/q against 0.0% expected and 0.3% earlier. The year-over-year printouts also showed a rosy picture for the block as it surged above the 1.8% market consensus to 1.9%, down from 2.3% previously. However, retail sales in Germany fell by 5.3%MoM in December, much worse than expected. According to data from the European Union's statistical office, Eurostat, headline inflation in the euro area fell sharply in January, while the core index remained unchanged from the previous month. Investors said that data on inflation in the euro zone are unlikely to influence Thursday's monetary decision of the European Central Bank (ECB). On Thursday, the bloc's central bank will raise interest rates by 50 bps as traders look to see if officials signal they are likely to maintain a similar pace of hikes at the March meeting, or suggest a slowdown in policy tightening. EUR/USD was little changed after the release, with the pair finding and now stuck below 1.0900. Source: investing.com Read next: India's Adani Group May Have Passed A Key Test, Positive EU CPI Report| FXMAG.COM GBP/USD Fed policy makers emphasized the need to keep interest rates at a higher level for a longer period of time in order to lower inflation. This, in turn, suggests that the Fed will continue to sound hawkish, which in turn provides some support for the US dollar and acts as wind in the sails for the GBP/USD pair. As such, investors will look to the accompanying monetary policy statement and remarks by Fed Chairman Jerome Powell at the post-meeting press conference for clues on the path ahead of interest rate hikes. This will play a key role in influencing USD price dynamics and provide a significant boost to the GBP/USD pair. Then focus will shift to Thursday's Bank of England (BoE) meeting. The cable pair was trading close to 1.2300 during the morning trading hours. It then rose above 1.2330 before falling back and trading at 1.2325. AUD/USD The Aussie pair was rising today and traded above 0.7070 in the European session. The next upward move is likely to remain limited ahead of the key US central bank risk. Overall, the Australian dollar remains generally up. Source: finance.yahoo.com, investing.com

The Australian dollar managed to reverse the early signs of a reversal and got above the resistance range of 0.7090-0.7130. The Marlin oscillator is now pointing upwards and the price is aiming for 0.7284, the June 2022 high. Data on building permits for December just came out this morning, it showed 18.5% growth. Also, the Bank of England and the European Central Bank are raising rates by 0.50%, which will most likely be reflected in the aussie's growth as well. On the four-hour chart, the price settled above 0.7130 and above the balance and MACD indicator lines. The Marlin oscillator has consolidated in the positive area. I expect further upward price movement.   Relevance up to 03:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333946

AUD/USD clings to mild gains at multi-day top, sidelined of late. Australia Building Permits came in firmer during December. Market sentiment dwindles as traders lick Fed-induced wounds ahead of ECB, BoE. US Factory Orders, hints for Friday’s NFP could entertain Aussie pair traders. AUD/USD remains sidelined at the highest levels since June 2022, mildly bid near 0.7140 during early Thursday, as bulls take a breather after the biggest daily jump in a month. In doing so, the risk-barometer pair portrays the market’s inaction while keeping the Federal Reserve (Fed) inspired gains. Other than the Fed’s dovish rate hike, firmer prints of Aussie housing data also favor the AUD/USD buyers. That said, Australia’s Building Permits rose 18.5% MoM and improved to -3.8% YoY in December versus -9.0% and -15.1% respective priors. Elsewhere, the Fed announced a 0.25% rate hike and matched the market forecast. However, the interesting part was lying in the Monetary Policy Statement which stated that the inflation “has eased somewhat but remains elevated”. Following the initial Fed announcements, the US Dollar paused the early Wednesday’s rebound. However, major moves took place on Fed Chair Jerome Powell’s comments  as he said “We can declare that a deflationary process has begun.” The policymaker also accepts the need for rate cuts during late 2023 if inflation comes down much faster. It should be observed that Fed Chair suggested that a couple more rate hikes are needed to reach the policy pivot but markets seem to ignore the fact. As the Federal Open Market Committee (FOMC) came out dovish, Wall Street rallied and the US 10-year Treasury yields slumped the most in two weeks while testing the lowest levels in a fortnight. Further, the S&P 500 Futures print mild gains around the highest levels since August 2022, tested the previous day. Looking ahead, AUD/USD traders may witness a lackluster day ahead of the monetary policy meetings of the European Central Bank (ECB) and the Bank of England (BoE) as they both are likely to propel the market moves. In addition to that, US Factory Orders for December, were expected 2.3% versus -1.8% prior and the US Preliminary Nonfarm Productivity for the fourth quarter (Q4), expected 2.4% versus 0.8% prior. Above all, Friday’s US jobs report for January will be crucial to follow for clear directions. Technical analysis Although the overbought RSI tests AUD/USD bulls, the pair’s downside remains off the table unless witnessing a daily closing below the six-month-old horizontal support surrounding 0.7130-25.

After a sluggish start to the week, AUD/USD bounced back on Wednesday with gains of 1.18%. The pair has edged lower on Thursday and is trading at 0.7137 in the European session. Powell sends US dollar lower The Federal Reserve raised rates by 25 basis points at the Wednesday meeting, as expected. The Fed noted that inflation has eased but reminded listeners that it remained much higher than the 2% target. Jerome Powell signaled that more rate hikes are coming and said he did not expect to cut rates this year. Sounds hawkish, right? Well, the US dollar initially recorded gains but headed lower after Powell acknowledged that the disinflation process had begun, which was sweet music to the ears of the financial markets. The result was a dovish hike and the Australian dollar surged against its US counterpart. The US dollar index is in retreat and has fallen to 100.99. There are two more inflation reports ahead of the Mar. 22 meeting and if they show inflation continues to fall, the Fed could wrap up the current rate-tightening cycle at that meeting. Besides inflation, the Fed is focused on employment data, which will make Friday’s nonfarm employment report an important factor in the Fed’s rate plans. In December, nonfarm payrolls fell from 256,000 to 223,000 and the downturn is expected to continue, with an estimate of 190,000 for January. The Reserve Bank of Australia meets next week and is expected to deliver a modest 25-basis point hike. The cash rate is currently at 3.10% and the markets are estimating that the peak rate will rise to somewhere between 3.6%-3.85%. This means that more hikes are on the way after February, but the pace of the rates will be data-dependent, especially on inflation reports. Read next: Resumption Of Cooperation Between Airbus And Qatar Airways| FXMAG.COM AUD/USD Technical AUD/USD faces resistance at 0.7181 and 0.7282 0.7071 has switched to support, followed by 0.7000 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jerome Powell had a lot to say during the press conference after yesterday's FOMC decision to raise the Federal Funds rate by 25 basis points. He stressed that the inflation risk persisted despite favorable disinflation observed in most sectors. The European Central Bank (ECB) and Bank of England (BoE) will meet later today and both banks are expected to raise their interest rates by 50bps. USD/JPY The dollar slide against the Japanese yen, dropping to as low as 128.07, its lowest in two weeks. Prior to the FOMC event, USD/JPY rose, approaching the falling resistance of the trendline, and then fell. USD/JPY rebounded after finding an intermediate cushion around 128.20 in the Asian session. Considering the risk sentiment in the market, the downtrend is intact. Now the USD/JPY pair is holding above 128.35. As the Bank of Japan keeps the 10-year Treasury yield at 0.5%, the falling US equivalent continues to narrow the interest rate differential, indicating continued declines in the USD/JPY pair. EUR/USD EUR/USD hit a 10-month high at 1.1033 today. EUR/USD pulled back slightly after reaching its highest level since early April at 1.1033 during the Asian trading hours on Thursday. The pair's technical outlook points to overbought conditions in the short term, but market participants may bet on further strengthening of the euro if the European Central Bank (ECB) repeats its hawkish message. The ECB will raise the main interest rate by 50 bp. The decision itself is largely priced in and is unlikely to receive a significant backlash. Some ECB policymakers have advocated a further 50 basis point hike at the next meeting, and the euro could gain strength if a policy statement or ECB President Christine Lagarde confirms such an action. Additionally, EUR/USD could maintain its bullish momentum if the ECB refrains from being optimistic about the inflation outlook. The EUR/USD pair fell below the 1.1000 level but slightly and is trading at 1.0991. GBP/USD GBP/USD drops towards 1.2300 during European trading hours. Sterling remains under slight downward pressure as investors wait for the BOE decision on interest rates. Despite strong selling pressure around the US dollar late Wednesday, GBP/USD's gains remain contained, especially against EUR/USD. On Thursday, the BOE is expected to raise its key rate by 50bps to 4% from 3.5%, but the GBP/USD pair could extend the decline nonetheless. At this point, a BOE rate hike of 25 basis points would be a dovish surprise and weigh heavily on sterling. Read next: Santander Bank Polska Shareholders Can Expect A Solid Dividend ,The ETH Liquid Staking Narrative Is Already Going Strong| FXMAG.COM AUD/USD The Australian dollar appreciated past $0.71 to its strongest levels in nearly eight months, as the US Federal Reserve reduced the size of its rate hike and said it has made progress in the fight against inflation. The aussie also remains supported by expectations that the Reserve Bank of Australia will press on with its fight against inflation and by China’s rapid reopening from Covid curbs. From a technical point of view, the daily chart of AUD/USD suggests that the pair will continue to rise. Source: investing.com, finance.yahoo.com

In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, AUD/USD could now trade between 0.7000 and 0.7135 in the short term. Key Quotes 24-hour view: “We highlighted yesterday that ‘the sharp and rapid rise appears to be overdone but AUD could rise above 0.7170 first before easing’. AUD subsequently rose to 0.7158 before dropping sharply to a low of 0.7069. Despite the decline, downward momentum has not improved much. Today, AUD is likely to trade in a range, expected to be between 0.7040 and 0.7110.” Next 1-3 weeks: “We noted yesterday (02 Feb, spot at 0.7145) that despite the advance in AUD on Wednesday, upward momentum has not improved much. However, we were of the view that AUD is likely to trade with an upward bias toward 0.7230. AUD rose to 0.7158 before staging a surprisingly sharp pullback. While our ‘strong support’ level at 0.7050 is not breached, upward momentum has more or less fizzled out. In other words, AUD is not ready to head higher to 0.7230. Instead, it is more likely to consolidate between 0.7000 and 0.7135 for now.”

The dollar rose slightly on Friday, maintaining some momentum after jumps in the previous session after a series of decisions by central banks in Europe. The rise in the USD can be attributed to some shift in trading position ahead of the closely watched US monthly employment report. Trading was relatively limited as markets awaited the latest US employment data later in the day, which could change US Federal Reserve policy. Weekly initial jobless claims in the US released on Thursday indicated strength in the labor market and boosted expectations for strong non-farm payrolls (NFP). USD/JPY The US dollar gained on the last day of the week and looks set to continue its bounce from the nine-month low recorded on Thursday, which is seen as a tailwind for USD/JPY. The Japanese yen, on the other hand, continues to benefit from expectations that high inflation could result in a more hawkish stance from the Bank of Japan (BoJ) later this year. Bets were lifted by Japan's nationwide core inflation, which hit its highest annualized level since December 1981. This is seen as another factor keeping USD/JPY in check, at least for now. The USD/JPY pair traded high around 128.80 at the beginning of the day, but fell in the following hours. Currently, the USD/JPY pair is trading below 128.40. EUR/USD Yesterday, the European Central Bank raised interest rates by half a percentage point on Thursday, but the euro fell below 1.0900 after ECB comments. During the ECB press conference, President Christine Lagarde acknowledged that the outlook for the eurozone has become less worrying for growth and inflation.  The ECB noted the likelihood of another similar rate hike next month, the meeting and its aftermath were in line with market expectations. Early Friday, ECB policymaker Gediminas Simkus said an interest rate cut this year was not likely. With a similarly hawkish accent, policymaker Peter Kazimierz noted that he did not see the March interest rate hike as the last one. These comments seem to help EUR/USD contain losses for now. The euro posted slight gains against the US dollar on Friday, thanks in part to news that the eurozone economy saw some gains last month. The EUR/USD pair in the European session is trading above 1.09 again at around 1.0940. Read next: Japanese Startup Aerwins Technologies Will Be On NASDAQ| FXMAG.COM GBP/USD The Bank of England raised interest rates for the tenth time but hinted that its tightening cycle may be coming to an end, while Federal Reserve Chairman Jerome Powell said in a press conference following the Fed's 25 bp rate hike that the process of "disinflation" in the United States seemed to be in progress. Moreover, BoE President Andrew Bailey said that inflation will continue to fall this year and faster in the second half of 2023. In fact, the central bank forecast that the annual CPI inflation in the UK will fall from the current 10.5% to around 4% in 2020. toward the end of the year. This, in turn, has fueled speculation that the current cycle of rate hikes may be coming to an end and weakening the pound sterling. GBP/USD gained momentum during the European trading hours and went positive above 1.2250 during the day. Currently, the GBP/USD pair is on the border of the level. AUD/USD The Australian dollar falls below $0.71, pulling back slightly from nearly eight-month highs on overall dollar strength. Despite this, Australians continue to be supported by expectations that the Reserve Bank of Australia will continue to tighten its policy. Currently, Aussie Pair is trading at around 0.7060. Source: investing.com, finance.yahoo.com

The dollar jumped on Friday after data showed that US employers created many more jobs in January than economists had expected, potentially giving the Federal Reserve more leeway to hold interest rate hikes. The dollar recently rose 1.12% to 102.92 on the day against a basket of currencies, the highest since Jan. 12 and is on track for its best day since Sept. 23. USD/JPY USD/JPY started the trading week at 130.4790. For a day and a half, the pair traded in the range of 129.80-130.45. Subsequently, the USD/JPY pair started its decline below the lower limit and dropped below the 129.00 level. Trading below 129.00 lasted until Friday where in the US session the USD/JPY pair sharply rebounded to above 131.00 and thus ended the trading week at 131.15. The final level was just below the week's high of USD/JPY at 131.1940. The difference between the highest and the nanny level of trading is quite large, because the pair reached the lowest level at 128.1160. EUR/USD The EUR/USD pair started the trading week at 1.0875. For a day and a half, the pair traded below 1.0900. After that, the EUR/USD pair rose above 1.0900 and reached a weekly high of 1.1030. Trading above 1.0900 continued until Friday, where in the US session the EUR/USD pair fell sharply below 1.0800 and thus ended the week of trading at the week's low at 1.0798. The European Central Bank (ECB) raised its key interest rates by 50 basis points as expected and said it intends to make another 50 basis point hike in March, comments from ECB President Christine Lagarde weighed on the euro. Early Friday, ECB policymakers Gediminas Simkus and Peter Kazimierz said an interest rate cut this year was not likely. Read next: The UK Economy Expects A Decline And Is Gearing Up For Recession| FXMAG.COM GBP/USD The Cable Pair started the week at 1.2404. For the next two days, the GBP/USD pair traded around 1.2300 until it broke out at 1.2400, after reaching the weekly high, the pair traded just below this level. The drop below 1.2300 came closer to Friday where the GBP/USD pair plummeted below 1.2100. GBP/USD ended the week at 1.2056, which is the lowest trading level of the week, the lowest since Jan. 6 and its worst day since Dec. 15. The Bank of England, as widely expected, raised its key rate by a further 50 basis points to 4%, its highest level since autumn 2008, indicative of more sustained price pressures. However, the BoE removed the wording that "they will respond with force if necessary." Moreover, BoE President Andrew Bailey said that inflation will continue to fall this year and faster in the second half of 2023. In fact, the central bank forecast that the annual CPI inflation in the UK will fall from the current 10.5% to around 4% in toward the end of the year. This, in turn, has fueled speculation that the current cycle of rate hikes may be coming to an end and weakening the pound sterling. AUD/USD The AUD/USD pair started trading at 0.7111. The pair then traded in the 0.7000-0.7075 range. On Thursday, the pair managed to break above 0.7100 and record a weekly high of 0.7156. Closer to Friday, the couple began their decline. The Aussie Pair ended the week at its lowest level of trade for the week, at 0.6924. The Australian awaits the RBA's interest rate decision on Tuesday 7 February. With the December quarter 2022 CPI print showing headline inflation is still running strong at 7.8 per cent, expectations are for a further increase in the cash rate. Source: finance.yahoo.com, investing.com

On Friday, the Australian dollar made an initial downward breakthrough as it aims to reverse into a medium-term decline. On the daily chart, the Marlin oscillator transitioned to the area of the downtrend. To fix the condition for a reversal, the price will need to settle under the MACD indicator line, which will probably already coincide with the support level of 0.6873 (low of January 19). After that, the price can reach the 0.6730 target. On the four-hour chart, the price slows down on the sign of the Marlin oscillator turning up. The price may make a correction either from the current levels or after the target level of 0.6873 is reached. Read next: Elon Musk Was Found Not Guilty In The Tweets Case| FXMAG.COM Relevance up to 03:00 2023-02-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334203

After a miserable end to the week, the Aussie is steady on Monday and is trading at 0.6912. The January US nonfarm payrolls was a blowout that shocked the markets. The economy created a stunning 517,000 new jobs, crushing the estimate of 185,000 and well above the previous read of 260,000. The unemployment rate fell from 3.5% to 3.4%, its lowest rate since 1969. There was more positive news as the ISM Services PMI climbed back into expansion territory with a reading of 55.2, up from 49.2 and above the forecast of 50.4 points. The US dollar surged against most of the major currencies after the employment report, while equity markets were down. The Australian dollar plunged by 2.2% on Friday. There had been speculation that the Fed might deliver a “one and done” rate hike in March which would end the current rate-hike cycle, but the job report has poured cold water on those hopes. The labour market is running much too hot for the Fed’s liking and wage growth remains an important driver of inflation. Fed member Mary Daly called the employment release a “wow number” and said that the Fed’s December forecast of a peak rate of 5.1% was a “good indicator” of Fed policy. RBA expected to raise rates The RBA will be in the spotlight on Tuesday with its monthly rate announcement. The central bank is expected to raise rates by 25 basis points, which would bring rates to 3.35%, a 10-year high. This would mark a fourth straight hike of 25 bp, as the RBA continues to fight inflation with steady but modest rate hikes. There are signs that rising interest rates are starting to bite the economy, with today’s retail sales release of -3.9% the latest reminder. The cash rate is projected to peak around 3.6%, although it could rise further if inflation remains stickier than expected. The employment market remains robust, allowing the central bank to continue raising rates as it sees fit. Read next: The US Judge Denied The FTC's Request, Giving The Meta An Important Victory| FXMAG.COM AUD/USD Technical AUD/USD faces resistance at 0.6962 and the round number of 0.7000 0.6841 and 0.6761 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The US dollar surged against its major trading partners early Monday ahead of a weak week of economic data and speeches by Fed officials resumed. The week starts calmly on Monday without key data. The US Monthly Employment Report (NFP) released on Friday showed that the economy added 517,000 jobs in January. jobs, significantly exceeding the consensus estimate. Moreover, the unemployment rate unexpectedly fell to 3.4%, the lowest level since May 1969. USD/JPY The prevailing risk-avoiding environment – as indicated by the generally weaker tone in equity markets – provides a safe haven for the Japanese Yen (JPY) and acts as a headwind for USD/JPY. The yen came under pressure during the Asian session after it was reported that the Japanese government had approached Bank of Japan (BoJ) Deputy Governor Masayoshi Amamiyi as a possible successor to Governor Kuroda. Market participants are of the opinion that Lieutenant Governor Amamiya will continue the policy of Governor Kuroda. The Japanese government has since dispelled rumors that it had approached Amamiya with a new BoJ governor to be announced in February. So USD/JPY started the week with a pattern above 132.00. Over the course of the day, the pair moved back below 132.00 but has now recovered and is trading at 132.1530. EUR/USD Rising tensions between the United States and China add to the bleak mood. On Friday, President Joe Biden postponed US Secretary of State Blinken's upcoming trip to China after a suspicious Beijing observation balloon that was flying in US skies was shot down. In terms of data, European figures were disappointing. On the one hand, Germany published December's factory orders, which fell by 10.1%YoY, much worse than expected. On the other hand, retail sales in the euro zone fell by 2.7% MoM in January. Moreover, we are likely to hear more aggressive statements from Lagarde, citing higher core inflation and growth forecasts. The EUR/USD pair stopped trading below 1.0790. At the beginning of the week, the EUR/USD pair is holding above 1.0765. Read next: Adani Group Company's Crisis Is Gaining Momentum, Finland Is The Happiest Country| FXMAG.COM GBP/USD The British pound has not enjoyed a good reputation lately. The economic data was not strong enough to support sterling against its rivals, while the ongoing strikes and the threat of more in the coming weeks hit the mood. On Friday, the Office for National Statistics (ONS) will release preliminary GDP data for Q4. Growth in the UK stalled in the fourth quarter of last year and may have reversed, fueling further recession fears. The GBP/USD pair tried to break above 1.2050 on Monday. Currently, the GBP/USD pair is trading above 1.2060. AUD/USD The Australian dollar collapsed on Friday after soaring US non-farm payrolls (NFP) data pushed the US dollar higher. Investors are cautious ahead of this week's decision by the Reserve Bank of Australia, which is expected to raise interest rates by 25 basis points for the ninth consecutive time. Annual inflation in Australia rose 7.8% in December, the largest increase since 1990 and above market forecasts of 7.5%. The Aussie pair in the early hours of trading tried to catch up and climbed above 0.6940 but failed to maintain momentum and the Aussie Pair trades below that level again near 0.6900. Source: wsj.com, finance.yahoo.com

The Reserve Bank of Australia has hiked a further 25bp taking the cash rate to 3.35% - there is no suggestion that rates are close to the peak or that they will fall any time soon Governor of the Reserve Bank of Australia, Philip Lowe 3.35% Cash rate target +25bp As expected Hawkish statement In addition to hiking rates a further 25bp to 3.35%, the Reserve Bank of Australia (RBA) engaged in a spot of forward guidance in the statement that accompanied today's decision on rates. There are two key comments in this statement that leave us thinking that we were right to revise our cash rate target forecast to 4.1% recently, up from 3.6% previously, which was roughly where the market consensus lay before this meeting.  The first of these comments reflects the path the RBA sees for inflation, which is for only a very slow decline. "The central forecast is for CPI inflation to decline to 4¾ per cent this year and to around 3 per cent by mid-2025". The second comment is "The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary".  "The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary." - Philip Lowe, Governor, Reserve Bank of Australia Australian rates and inflation forecasts (ING) Source: CEIC, ING Caution - forward guidance! The RBA's inflation forecasts and their implication that rates will rise more and stay higher for longer are magnitudes different to our own forecasts (see chart) and also the prevailing market view before this meeting. In contrast, we believe that headline inflation will be back below 3% by the first quarter of 2024. So how can we be so far at odds with the RBA's outlook? The answer probably lies in the concept of "forward guidance". By stating that, in its view, inflation will stay high for a protracted period, the RBA is undermining any thoughts of easing later this year or early next. This will lift longer-term bond yields and short-term rate expectations. It will give the AUD a boost too. All of these things tighten financial conditions and will make it easier to bring inflation down. However, we may want to remind ourselves of the RBA's track record here. Even as Australian inflation was taking off, the RBA's guidance was that rates would not be raised from their cycle low of 0.1% until at least 2024. Well, that obviously didn't happen. Nor did wage growth need to exceed 3% for inflation to return sustainably to its target range on the way up. But then forward guidance does not have to be accurate to work. Indeed, if it does work, then it probably won't be accurate as credible guidance will help bring about a quicker adjustment of inflation. In short, we don't need to believe the RBA's forecasts and statements or adjust our forecasts to match them. We just need to be aware of their intentions. It is a very different approach to that taken by the US Federal Reserve's Chair, Jerome Powell. He recently expressed no interest in short-term market reactions to the Fed's meetings and statements. For Australian markets, the near term is likely to see some more support for the AUD from higher rate expectations, though it would only take a soft inflation report or some weak employment data for holes to start appearing in the RBA's assertions.  Read this article on THINK TagsRBA rate policy RBA rate decision Australian economy Australian bond yields AUD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  

The current market enviornment resembles last week's pre-FOMC one: the dollar is regaining ground as markets position themselves for a hawkish tone from Powell. The difference is that, today, strong jobs gains give Powell an extra incentive to push back against lower rates. The dollar recovery may run a little longer. Expect ECB hawkish comments as well. Source: Shutterstock   We have published our latest FX views and forecasts in the February edition of FX Talking: "Soft landing, hard landing, no landing?" USD: Powell's second hawkish attempt can support the dollar One week ago, we were observing how the dollar had regained the favour of the market as investors were positioning for a reiteration of the hawkish rhetoric by Fed Chair Powell after the FOMC meeting. As we now know, Powell actually conveyed the message of being relatively relaxed with loosening financial conditions last Wednesday. Today, however, we are looking at a market environment that highly resembles last week’s pre-FOMC one. Markets have been squaring short-dollar positions in the past two sessions as expectations have grown that Powell will deliver a hawkish speech at the Economic Club in Washington today. The key difference with last week is that Fed hawkish bets are now backed by a shockingly strong January jobs report (we recommend looking at our economics team’s note on the US labour market published yesterday). Let’s assume that a goldilocks scenario where inflation declines without seriously harming employment is becoming a more central scenario for the Fed. Well, even so, it seems a rather appropriate time for Powell to deliver one last hawkish “hurrah” today. In a way, many are seeing at least some degree of protest against the market reaction to last week’s FOMC as necessary. Yesterday, Atlanta Fed chief Raphael Bostic said that strong job gains could mean a higher peak rate. Indeed, it looks like markets have already positioned themselves for some pushback against easing rate expectations, but the surprise strength of the US jobs report gives Powell ample room to sound more hawkish than expected. Ultimately, the ongoing upward correction may run a little longer before losing steam. Incidentally, the overall environment is doing little to lure markets back into risk assets and away from the safe-haven dollar. US-China tensions are a source of concerns and likely weighing on global sentiment, and the eurozone cannot count on a supportive data flow to keep the growth re-rating process going. It looks like only another under-delivery (i.e. dovish surprise) by Powell can hurt the dollar today. Francesco Pesole EUR: ECB hawks to the rescue EUR/USD has pressed lower and may re-test the 1.0700 support today. There isn’t a whole lot driving the euro slump from the domestic side. In what is now becoming an increasingly common occurrence, ECB members appear to be rushing to the rescue in the week after the ECB meeting. The goal is simple: convince markets the hawkish bias is untouched, hoping to regain some of the market’s trust that President Lagarde seems to have lost. We’ll hear from three ECB hawks - Schnabel, Knot and Kazimir – and one “dove” – Villeroy – who recently aligned its view with the broader ECB message on further tightening. All in all, a slew of hawkish comments and rate protests should be on the cards today. This could give some modest support to the euro, but we believe this evening’s speech by Powell will have broader and longer-lasting implications for EUR/USD. A contraction to the 1.0600-1.0650 area by the end of this week is now looking increasingly likely. A pushback against the dovish market reaction is also what we have seen from BoE officials so far, with Caroline Mann (a hawk) firmly ruling out the peak rate has been reached. Today, we’ll hear from MPC members Ramsden, Pill and Cunliffe. With the rate protest coming from both the UK and the eurozone, EUR/GBP may hover around 0.8900-0.8950 for now.   Francesco Pesole AUD: RBA deliver hawkish hike The Reserve Bank of Australia raised rates by 25bp, in line with consensus, and signalled more rate increases are on their way. As we expected, sticky inflation has forced the RBA to sound more hawkish and to push rate expectations higher. Here is our economist’s review of the meeting. Markets are now pricing in a peak rate at 3.9% from around 3.6% before the announcement, but we think this is still underestimating how far the RBA will go. Our projections see rates hit 4.1% in the second quarter, and a potential first rate cut only in the fourth quarter. We continue to see AUD as the most attractive currency in G10 in the months ahead. Indeed, recent deterioration in US-China relations are a concern, but Australia still seems on track to easing trade tensions with Beijing, and the room for further hawkish repricing in RBA rate expectations means that 0.75 in AUD/USD could be reached during a soft-USD environment in 2Q22. Francesco Pesole CEE: The US dollar brought pain to the region The EUR/USD decline hit CEE FX hard yesterday. The US Dollar may cause pain to the region for a while longer and the local calendar has little to offer today. This morning's data showed Hungary's industrial production for December and the Czech Republic will release retail sales. Later today the Czech National Bank (CNB) will release FX reserve statistics including FX transactions for December. However, we don't suspect the CNB has intervened in this period. In our view, we may have last seen the central bank in the market in late September. However, we think the total intervention bill has reached CZK25.6bn since mid-May last year, roughly 16% of the CNB's FX reserves, and today's numbers won't change that. On the FX front, the key will be which direction EUR/USD goes and regional factors won't do much about it. After yesterday's 1.9% depreciation, the main focus today will be on Hungarian forint. Yesterday's move has certainly eased the pressure on heavy long positioning, but that may not mean the end of the upward journey. In our view, the Hungarian forint has gone too far and our model linked to EUR/USD indicates levels more around 392 EUR/HUF. However, the US dollar move will be decisive factor today. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The US dollar was mixed against its major trading partners early Tuesday - up against the euro and pound, down against the yen and the Canadian dollar. Today, Fed head Powell will speak. Powell will have to reconcile last week's decision by the Federal Open Market Committee to slow the pace of interest rate hikes with the exceptionally strong employment data for January released on Friday. In addition to Powell, Fed Vice Chairman for Supervision, Michael Barr, is set to speak at 14:00 ET. For the rest of the week there will be Fed officials. USD/JPY USD/JPY is rising after the US Fed raised interest rates by 25 basis points last week, and Chairman Powell said the central bank could deliver a few more rate hikes to bring inflation down to target. Additionally, reports that Bank of Japan Vice Governor Masayoshi Amamiya could replace the current Haruhiko Kuroda as central bank governor provided some support for USD/JPY as the BoJ's ultra-easy policy is expected to continue. USD/JPY is under some selling pressure on Tuesday and pulls some of the previous day's gains down to around 133.00, a monthly high. After the pair fell below 132.00, it is currently holding just above 132.0190. EUR/USD The EUR/USD pair extended its decline to a new three-week low below 1.0700 as demand for the US dollar prevails ahead of US Federal Reserve (Fed) President Jerome Powell's speech. Investors await speeches from ECB officials and FOMC chairman Jerome Powell. During the European morning, Germany published data on industrial production in December, which fell by 3.1% over the month and by 3.9% a year earlier, much worse than expected. The United States will publish a balance of trade in goods and services in December, which is expected to show a deficit of USD 68.5 billion. Continuing its decline, EUR/USD dropped below 1.0700 to 1.0694 and looks set to drop further. Read next: The Court In Munich Decided In Favor Of BMW| FXMAG.COM GBP/USD Sterling hit a new monthly low against the US dollar on Tuesday as investors expect the Bank of England (BoE) to end and possibly reverse its monetary tightening cycle soon, while the US Federal Reserve may hold interest rates higher for longer. Investors await further comments from the Bank of England and preliminary UK Gross Domestic Product (GDP) data. GBP/USD came under bearish pressure again and hit a month-low below 1.2000 on Tuesday. Despite a slight improvement in risk sentiment, the US dollar holds its ground and weighs heavily on the GBP/USD pair. AUD/USD The Australian dollar rose high after the RBA raised its cash rate target to 3.35% from 3.10%. Since the first increase in May 2022, a total of 325 basis points have been added. The Australian dollar gained above $0.69, bouncing back from monthly lows following the RBA decision. The RBA said in an accompanying statement: "The board expects further rate hikes will be needed in the coming months to ensure inflation returns to target and that this period of high inflation is only temporary." Following the RBA decision, the Aussie Pair holds above 0.69 but the pair has lost momentum and is closer to 0.6900 than close to 0.6930. Source: finance.yahoo.com, investing.com

After rebounding from the support of the MACD line on the daily chart, the price rose by 75 pips. Of course, the Reserve Bank of Australia rate hike from 3.10% to 3.35% also influenced the growth. But in general, there has been a strong reversal to strengthen the US dollar in the forex market, so the aussie's growth will be limited. Even the signal line of the Marlin oscillator has outlined a downward reversal on the way to the limit of the green zone. The consolidation under 0.6873, respectively under the MACD indicator line, will send the prices in a new wave of downward movement in the medium-term. On the four-hour chart, the price paused the corrective growth at the level of the January 31 low. This might be the limit. But if it crosses this level, the final stop and the reversal may occur from the MACD line near 0.7030. The signal line of the Marlin oscillator is on the zero line and waiting for a signal for further direction. That is, in the current situation on this chart, the oscillator is in the position to lead.     Relevance up to 03:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334450

According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, AUD/USD is now seen navigating within the 0.6865-0.7055 range in the next weeks. Key Quotes 24-hour view: “We noted yesterday that downward pressure has eased somewhat and that AUD is unlikely to weaken further.  We expected AUD to trade in a range between 0.6865 and 0.6930. While AUD did not weaken further, instead of trading in a range, it rebounded strongly to 0.6989 before ending the day on a strong note at 0.6960 (+1.12%). The sharp rise appears to be overdone but there is room for AUD to test 0.7000 before easing. The major resistance at 0.7055 is not expected to come under threat. Support is at 0.6925, followed by 0.6890.” Next 1-3 weeks: “After AUD fell sharply, we indicated on Monday (06 Feb, spot at 0.6920) that while AUD could weaken further, the 0.6825 level is expected to offer solid support. However, AUD did not quite test 0.6825 (low of 0.6856 on Monday) and yesterday, it rebounded strongly to a high of 0.6989. The breach of our ‘strong resistance’ level at 0.6980 indicates that the downward pressure has eased. AUD appears to have moved into a consolidation phase and it is likely to trade between 0.6865 and 0.7055 for the time being.”

The dollar fell as Powell spoke. The dollar fell Wednesday after Federal Reserve Chairman Jerome Powell refused to significantly tighten his tone on inflation in a closely watched speech, despite last week's strong employment data. USD/JPY The yen tumbled earlier this week as robust US jobs data suggested the Fed had more room for interest rate hikes. Recently, Japan's central bank countered speculation about another policy adjustment by keeping interest rates very low and leaving its yield control policy unchanged. As things stand, it seems that the market is having a hard time assessing the way forward as strong US data brings constant warnings of more hikes, which usually support USD valuations. At the same time, Japan is considering nominations for the top BoJ position for April, as the likelihood of policy normalization at the ultra-dovish Bank of Japan by the new incumbent cannot be ruled out. In the morning, the USD/JPY pair started rising towards 131.30. USD/JPY traded above 131.00 for the following hours of trading but fell below in the European session and is now trading at 130.6910. EUR/USD EUR/USD rebounded towards 1.0750 on Wednesday after falling below 1.0700 late Tuesday but struggled to gain further momentum. In the absence of high-impact data releases, investors will pay close attention to comments from Fed officials. Currently, the EUR/USD pair has fallen below this level, but slightly to the level of 1.0740. On Tuesday, mixed comments from European Central Bank (ECB) officials made it difficult for the euro to gain an advantage over its rivals. ECB politician Francois Villeroy de Galhau said they are not very far from the peak of inflation. On a hawkish note, policymaker Joachim Nagel reiterated that further significant interest rate hikes would be needed, adding that ECB rates were not restrictive yet. Finally, Isabel Schnabel, member of the Executive Board of the ECB, took a neutral tone. Federal Reserve Chairman Jerome Powell said US interest rates may need to be raised while the process of "disinflation" appears to be underway. Read next: Douyin Wants To Enter The Food Delivery Industry| FXMAG.COM GBP/USD At the end of Tuesday, FOMC Chairman Jerome Powell also confirmed good labor market data and reiterated that they will probably have to make further rate hikes. On an optimistic note, Powell said he expected 2023 to be "a year of significant decline in inflation." This remark made it harder for the US Dollar Index to maintain its upward momentum and helped GBP/USD recover some of its losses this week. From the UK's perspective, the strike action remains a concern for the government and civil servants are planning to carry out another strike on March 15. Chancellor of the Exchequer Jeremy Hunt will present his fiscal plan on the same day and will be under additional pressure to possibly reassess inquiries about the pay settlement. Overall, it is bearish for the pound as strike action disrupts the UK economy and challenges UK leadership. GBP/USD pair gained momentum and climbed to around 1.2100 on Wednesday. Currently, the GBP/USD pair is trading above 1.2090$. AUD/USD The Aussie pair is defending support at 0.6950 with the US Dollar generally subdued so far. The Aussie pair surged above 0.6990 today but failed to maintain momentum and is currently trading above 0.6980. Yesterday the RBA raised rates by 25 bp. Source: finance.yahoo.com, investing.com

AUD/USD picks up bids to refresh intraday high. Risk profile improves on US-China, growth chatters amid a light calendar. China inflation, RBA Monetary Policy Statement eyed for clear directions. AUD/USD renews intraday top near 0.6965 as buyers benefit from the broad US Dollar weakness and the risk-on mood during early Thursday’s sluggish session. In doing so, the Aussie pair seems to prepare for the next day’s heavy data flow comprising China inflation and monetary policy statement from the Reserve Bank of Australia (RBA), not to forget the US consumer-centric data. For starters, the risk-positive headlines surrounding China occupy the driver’s seat to propel the risk-barometer AUD/USD prices. Important among them are the receding fears of the US-China jitters, following the China balloon shooting by the US, join the hopes of People’s Bank of China’s (PBOC) rate cuts and the restart of the China-based companies’ listing on the US exchanges to favor risk-on mood in the bloc. On the other hand, the pullback in yields could also be linked to the AUD/USD pair’s run-up, as the same weighs on the US Dollar. That said, yields rely on the market’s reassessment of the hawkish Fed talks as Chairman Jerome Powell hesitated in praising the jobs report but Fed Governor Christopher Waller, New York Federal Reserve President John Williams and Fed Governor Lisa Cook highlight inflation fear to suggest further rate increases from the US central bank. Furthermore, comments from the US diplomats such as Treasury Secretary Janet Yellen and President Joe Biden also amplified inflation concerns, as well as hopes of no recession in the US, which in turn suggests a safe side for the Fed to hike the benchmark rates. Read next: The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700| FXMAG.COM Against this backdrop, US Dollar Index (DXY) traces softer Treasury bond yields to reverse the previous day’s recovery moves, down 0.22% intraday near 103.25 at the latest. That said, the US 10-year Treasury bond yields reversed from a one-month high to snap a three-day uptrend on Wednesday, pressured around 3.62% by the press time. Furthermore, the Asia-Pacific shares grind higher whereas the S&P 500 Futures ignore Wall Street’s losses to print mild gains by the press time. Looking ahead, the US Weekly Jobless Claims can entertain intraday traders while Friday’s RBA Monetary Policy Statement and China inflation data will be crucial for the AUD/USD pair traders to watch. That said, the RBA’s latest hawkish appearance and Beijing-linked optimism will be at test on Friday. Technical analysis AUD/USD run-up appears doubtful unless crossing the 21 and 10-DMA confluence near the 0.7000 psychological magnet.

The US dollar hovered near the middle of recent ranges compared to majors on Thursday as investors scrutinized comments from many Federal Reserve officials. Overnight, four Fed speakers continue to send their hawkish message to the market. The consistent message is that further interest rate hikes are announced and that the interest rate will have to stay high for a long time. The employment data initially raised expectations that the Fed might return to aggressive monetary policy, but Powell did not lean in that direction in his speech. Investors will be keeping a close eye on the consumer price inflation data that comes out on Tuesday for additional guidance on the policy outlook. USD/JPY During the morning trading hours, USD/JPY held above 131.40 but failed to sustain momentum. USD/JPY has returned to levels below 131.00. EUR/USD EUR/USD maintained its upward momentum and extended its daily gain towards 1.0800 on Thursday. Earlier in the day, data from Germany revealed that the Harmonized Index of Consumer Prices (HICP) fell to 9.2% on an annualized basis in January from 9.6% in December. This reading was much lower than market expectations of 10%, but the negative impact of these data on the euro remained short-lived. With the major European stock indices opening much higher on Thursday, the EUR/USD rate began to rise. At the time of publication, the German DAX 30 and Euro Stoxx 50 indices were up over 1% during the day. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM GBP/USD The Bank of England is concerned that UK inflation will remain stubbornly high. This suggests that the BoE has growing uncertainty about whether further policy tightening is warranted and that the current cycle of rate hikes may be coming to an end. The BoE has hiked interest rates 10 times since December 2021, the last being a week ago, as it battles to bring down sky-high inflation without causing a deep recession. Bank of England Governor Andrew Bailey is joined today by MPC members Huw Pill, Professor Silvana Tenreyro and Professor Jonathan Haskel in the Treasury Committee (TSC). So far, they have been asked whether the central bank is lagging behind in the fight against inflation. So far, the statements of BoE representatives suggest that the MPC is still worried about persistently high inflation and that the British economy may face a prolonged period of weakness. GBP/USD continued to move higher and hit a new six-day high above 1.2150 on Thursday. Cautious comments from BOE policymakers on the outlook for inflation and a risk-prone market environment help the pair keep their balance. On Friday, the UK's Office for National Statistics will publish estimate GDP figures for December 2022. AUD/USD The risk-sensitive Australian dollar gained against gains from US equity futures and the more hawkish Reserve Bank. AUD/USD rebounded strongly from 0.6920 in the Asian session. The New Zealand dollar also appreciated. Australians were rather dissatisfied after the last RBA meeting, which may point to further rate hikes in the future due to inflationary pressure. A slightly weaker dollar this morning is supporting the Australian bulls, including the rise of some key Australian commodities. The Australian pair is currently trading close to the $0.7000 level. Source: finance.yahoo.com, investing.com

On Thursday, the Australian dollar quickly rose by 80 points and just as quickly returned to the opening level of the day. The price is experiencing significant pressure and the bulls will probably give in to this pressure. After reaching the support at 0.6873, the price can hit the next target at 0.6730. On the four-hour chart, the price turned from the MACD line and settled under the balance line; there was a false breakout above the balance line, which considerably raises the probability of building a downtrend. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM The Marlin oscillator is in the positive area. Once the price overcomes yesterday's low (0.6922), it will move into the negative area and will move in the same direction as the price. I expect the price to reach the target level of 0.6730. This basic scenario will be canceled once the price climbs above the MACD line, above 0.7004.   Relevance up to 03:00 2023-02-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334714

AUD/USD picks up bids to rebound from intraday low amid sluggish markets. Traders pare recent losses amid market’s cautious mood ahead of the key US data. RBA SoMP, China inflation numbers failed to impress AUD/USD traders. Mixed plays of recession and central bank talks offer inactive session ahead of US consumer-centric data. AUD/USD consolidates daily losses around 0.6930, bouncing off the intraday low amid early Friday morning in Europe. In doing so, the quote traders lick their wounds amid cautious sentiment ahead of the key US data, as well as amid indecision due to the mixed catalysts. That said, the quarterly prints of the Reserve Bank of Australia’s (RBA) Statement of Monetary Policy (SoMP) failed to impress the AUD/USD buyers despite posting hawkish economic forecasts and readiness for further interest rate hike. The reason could be linked to the statement saying, “The board is mindful of the rise in interest rates already made and that the policy acts with a lag.” Also read: RBA hawkish-sounding quarterly Statement on Monetary Policy does little for AUD Following that, China's Consumer Price Index (CPI) eased to 2.1% YoY versus 2.2% market forecasts, compared to 1.8% prior, while the Producer Price Index (PPI) dropped heavily to -0.8% YoY from -0.7% previous readings and -0.5% consensus.  Also read: China Consumer Price Index a touch lower than estimates, AUD eyed for reaction It should be noted that the looming fears of the US recession, as favored the US Treasury bond yields’ inversion, underpin the bearish bias surrounding the AUD/USD pair. However, the previous day’s downbeat US Jobless Claims join the Federal Reserve (Fed) officials’ hesitance in praising higher rate to weigh on the US Dollar and put a floor under the price. Read next: USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$| FXMAG.COM Against this backdrop, S&P 500 Futures print mild losses while the stocks in the Asia-Pacific region remain pressured. However, the retreat in the US Treasury bond yields appears to keep the bears at bay. Moving on, early signals for the next week’s US inflation data, namely preliminary readings of the US Michigan Consumer Sentiment Index and 5-year Consumer Inflation Expectations for February, will be crucial for the AUD/USD pair traders to watch for clear directions. Considering the upbeat expectations from the scheduled data, as well as the recession woes, the major currency pair is likely to witness further downside. Technical analysis Unless breaking the 50-DMA support surrounding 0.6870, the AUD/USD price remains on the bull’s radar targeting the 21-DMA hurdle, around the 0.7000 round figure.    

During the American session, the University of Michigan will publish a preliminary consumer sentiment survey for February. The main consumer confidence index is expected to rise to 65 from 64.9 in January. Market participants will keep a close eye on the component of the survey on inflation expectations for the next year, which fell to 4% in January from 4.4% in December. An unexpected increase in this reading could strengthen the US dollar. USD/JPY The yen strengthened on Friday before recovering slightly after Kazuo Ueda, who was reportedly tapped as the next governor of the Bank of Japan (BOJ), said the central bank's monetary policy was the right one. The government is also nominating Ryozo Himino, the former head of Japan's banking regulator, and BOJ director Shinichi Uchida as deputy governors, the Nikkei said. BOJ deputy governor Masayoshi Amamiya was the frontrunner for the role of governor, but the Nikkei reported that he turned down the job. The government is expected to present candidates to parliament on February 14. The BOJ shocked markets in December when it raised the 10-year yield cap to 0.5% from 0.25%, doubling the allowable range above or below zero. USD/JPY managed to rebound towards 131.00 after falling below 130.00 earlier in the day. EUR/USD EUR/USD picked up momentum and climbed to around 1.0800 at the end of Thursday, but lost much of its daily gains and closed below 1.0750. EUR/USD came under slight downward pressure and fell towards 1.0700 during Friday's European session. The US dollar gained strength thanks to rising US Treasury yields. The euro hit a 10-month high against the dollar earlier this month. The prospect of a milder recession thanks to falling energy prices and plentiful natural gas supplies, coupled with China's exit from three years of severe COVID-related restrictions, has generally ignited investors' appetite for European assets. However, this enthusiasm has made the euro look vulnerable, at least in the short term. The Euro is set for a second consecutive week of declines and at the time of writing EUR/USD is trading below 1.07 at 1.6998. Read next: Tesla Will Increase Output For 2023, Deliveroo Are Planning To Cut Jobs| FXMAG.COM GBP/USD The pound weakened on Friday after data showed the UK economy stalled in the final three months of 2022, avoiding a technical recession but recording zero growth. The UK Office for National Statistics said on Friday that the UK economy contracted by 0.5% on a monthly basis in December and came to a standstill in the fourth quarter. On the positive side, industrial production rose 0.3% in December, beating market expectations for a 0.2% decline. The Bank of England forecast last week that the UK would enter a shallow but lengthy recession starting in the first quarter of this year and lasting five quarters. Moreover, Money Markets shows that investors believe that UK interest rates will peak below 4.40% by late summer, from the current 4%. UK consumer inflation data will be released next week and may have a bigger impact on these expectations. The GBP/USD pair previously surged to levels above 1.2130 but lost momentum and is now trading just above 1.2100 and below 1.2110. AUD/USD The Australian dollar held below $0.695, pressured by hawkish signals from Federal Reserve officials who reiterated their commitment to bring down inflation with more rate increases. The Australian Dollar remains supported by expectations that the Reserve Bank of Australia will tighten policy further. The RBA’s latest monetary policy statement showed that the central bank revised its inflation forecasts higher for this year, saying price pressures were spreading into services and wages. AUD/USD is headed towards 0.6900 amid disappointing Chinese CPI and PPI data. The Australian pair is not benefiting from the RBA's hawkish monetary policy statement, currently the Aussie pair holds above 0.6920. Source: finance.yahoo.com, investing.com

The recovery move by AUD/USD might meet offers amid the risk-off mood. A surprise rise in the US inflation would accelerate rate hike odds by the Fed. A confident drop below the H&S neckline will trigger a bearish reversal. The AUD/USD pair has shown a responsive buying action after surrendering the round-level support of 0.6900 in the Asian session. The Aussie asset has attempted a recovery move, however, the Australian Dollar could retreat ahead as the risk impulse is quite negative amid airborne threats to the United States. The US Dollar Index (DXY) is expected to recapture the 103.50 resistance ahead investors are getting anxious ahead of the release of the United State inflation data. S&P500 futures are extending their losses as investors are expecting that a surprise rise in the US inflation would accelerate rate hike odds by the Federal Reserve (Fed) and eventually will escalate recession fears. The 10-year US Treasury yields are struggling to extend gains above 3.75%. AUD/USD is completing the last leg of the Head and Shoulder chart pattern on a four-hour scale. The aforementioned chart pattern is a prolonged consolidation and a breakdown of the neckline plotted from the January 10 low at 0.6860 will trigger a bearish reversal. The asset is facing barricades each time encountering the 20-period Exponential Moving Average (EMA) at 0.6398, indicating more weakness ahead. Meanwhile, the Relative Strength Index (RSI) (14) is struggling to sustain itself in the 40.00-60.00 range. A slippage into the bearish range of 20.00-40.00 will trigger the bearish momentum. Read next: Campbell Bought A $100,000 Plane To Live In It| FXMAG.COM A breakdown below the neckline plotted from January 10 low at 0.6860 will drag the asset toward December 28 high around 0.6800. A slippage below the latter will further drag the asset toward December 22 high at 0.6767. In an alternate scenario, a decisive break above the psychological resistance of 0.7000 will drive the asset towards January 18 high at 0.7064 followed by January 26 high at 0.7143. AUD/USD four-hour chart remaining time till the new event being published U.S.: Leading Indicators

The dollar gained on Friday as investors grew concerned about a U.S. inflation report next week that could show a number that is higher than markets forecast amid data showing expectations for a continued rise in prices over the next year. As the data continued to show positive U.S. momentum, the dollar was on pace for its second weekly rise against a basket of six currencies, a run it has not seen since October. Federal Reserve Chair Jerome Powell has cited the Michigan survey's inflation outlook as one of the indicators the U.S. central bank tracks. USD/JPY The USD/JPY pair started the week trading at 132.12 and, despite the correction, was moving towards 132.50. Above this level on the first day of trading (Monday) it reached a weekly high of 132.88. In the following days, the USD/JPY pair fell below 132.00 until reaching the level of 130.50. The pair then traded in a range of 130.00-131.50 until USD/JPY dropped to 129.9550, which is the pair's weekly low. The pair closed between the highest and lowest levels, i.e. above 131.00, 131.38 to be exact. The yen rose on Friday across the board with Kazuo Ueda reportedly set to become the next Bank of Japan (BOJ) governor but pared gains after he said the central bank's monetary policy was appropriate. The Japanese unit was on track for its first weekly gain versus the dollar after posting losses for three straight weeks. Japanese Prime Minister Fumio Kishida said the government is planning to present the BOJ governor nominee to parliament on Tuesday, but did not answer a question on whether Ueda would be put forward. Read next: Tesla Will Increase Output For 2023, Deliveroo Are Planning To Cut Jobs| FXMAG.COM EUR/USD The EUR/USD pair started the week trading close to $1.08 at 1.0792. In the following hours, the EUR/USD pair reached a weekly high of 1.0804 and then began to fall towards 1.07. On Tuesday, EUR/USD fell below 1.07, then rose again on Wednesday, breaking above 1.0750 on Thursday. The pair failed to maintain this momentum and on the final day of trading fell to a weekly low of 1.0670. After that, EUR/USD rose slightly and closed the week just above the low of 1.0681. GBP/USD The Cable pair started trading at 1.2050. And for the next two days she lingered in this area. On Wednesday, GBP/USD started an upward move towards 1.21. On Thursday, GBP/USD traded close to 1.22 at 1.2191 which is the weekly high of GBP/USD, but fell back on Friday to close the week at 1.2058. The week's low was at 1.1963 for the GBP/USD pair. AUD/USD The Aussie Pair started trading at 0.6910 and fell on Monday to a weekly low of 0.6859. In the following days, the pair stayed above 0.69. On Thursday, AUD/USD broke above 0.70 and hit a weekly high of 0.7011, similarly to EUR and GBP, the Australian pair failed to maintain momentum and dropped Friday to end the week at 0.6921. The Australian and New Zealand dollars found support on Friday as markets continued to ramp up expectations for how high local interest rates might rise, sending bond yields to one-month peaks. Having hiked rates by a quarter point to a decade-high of 3.35% on Tuesday, the Reserve Bank of Australia (RBA) said domestic price pressures were building and spreading into services and wages, so it was unclear how high rates might have to go. Source: finance.yahoo.com, investing.com

The dollar approached a five-week high against its major peers on Monday, and investors increased their bets on the Federal Reserve staying on tight monetary policy longer. The most important event this week will be US consumer prices data released on Tuesday, which will strengthen expectations regarding Fed policy. Strong CPI data in the US would increase expectations for monetary policy tightening by the Federal Reserve, which would probably push the dollar up. USD/JPY USD/JPY started the new week at the level of 131.3470, and in the following hours it rose and broke through the level of 132.00. At the time of writing, USD/JPY is trading above 132.50. The asset is expected to refresh a four-day high above 132.00 as investors are extremely risk-averse ahead of the United States inflation report. In January, Japanese investors became net buyers of foreign bonds for the first time in five months as US bond yields fell in a sign that slowing inflation would prompt major central banks to slow down the pace of interest rate hikes. Japanese investors bought foreign bonds net worth 1.56 trillion yen ($11.79 billion) in January, according to data from Japan's Ministry of Finance, marking their biggest buying frenzy since September 2021. Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM EUR/USD On Friday, a preliminary consumer sentiment survey by the University of Michigan in February showed that annual expected inflation rose to 4.2% from 3.9% in February. The reading helped the US dollar stay strong against its rivals ahead of the weekend and forced EUR/USD to end the week in the red. Early Monday, the US Dollar Index holds strong and limits EUR/USD's gains. The EUR/USD pair started trading at 1.0684 this week. In the following hours, EUR/USD fell towards 1.0660 but rebounded above 1.0680. At the time of writing, the EUR/USD pair is trading at 1.0675. The European Commission raised the EU growth forecast for 2023. The European Commission noted that the EU economy entered 2023 in a better position than predicted in the autumn and raised its growth forecasts for this year to 0.9% in the euro area. The Eurozone looks set to avoid a technical recession, thanks in large part to falling gas prices and a solid labor market. The Commission has also lowered its inflation expectations, with headline inflation now expected to fall to 5.6% in 2023. GBP/USD The GBP/USD pair started the week at 1.2050. Similar to the Euro pair, the GBP/USD pair fell towards 1.2035 during the morning trading hours before rising above 1.2060 again. Currently, GBP/USD is trading at 1.2056. The market awaits this week's data, which could show that unemployment in the UK remained flat in December and weekly earnings rose less than in November. The British economy, similarly to the US, will publish inflation reports this week. UK is expecting inflation to fall. UK retail sales figures for January are expected to show that while consumers continue to spend less, the pace of decline in sales may have slowed in the new year. AUD/USD Markets expects RBA Chairman Philip Lowe to reinforce the bank's hawkish stance at parliamentary hearings this week. Reserve Bank of Australia (RBA) Governor Philip Lowe will testify before the Senate this week. Lowe will appear before the Senate Appraisals Committee on Wednesday, and then on Friday will give his semi-annual testimony to the House Economics Committee. In between these public appearances will be squeezed in employment data on Thursday. The central bank surprised markets last week by signaling at least two more rate hikes after raising the cash rate to a decade high of 3.35%. This stifled any talk of a break and led the markets to price in a final rate of 4.2% The AUD/USD Pair started the week close to 0.6900, where it fell below this level in the following hours. The Australian pair managed to break above 0.6915 and is currently trading above 0.6930. Source: investing.com, finance.yahoo.com

Yesterday, the Australian dollar bounced from the support of the MACD line and closed the day up by 47 pips. The price edged down this morning, and the Marlin oscillator shows the intention to turn down as it approaches the neutral zero line. The first sign of its intention to turn down is when the price crosses the MACD line (0.6910). A confirmation is when it crosses the support of 0.6873, which is the January 19 low. In case it succeeds, the 0.6730 target will become available. On the four-hour chart, the price turns down from the MACD indicator line. The Marlin oscillator intends to move into the area of the downtrend for the second time. If the reversal does not succeed, after the price overcomes the 0.0712 high on February 9, the bulls will try to move into the target range at 0.7090-0.7130.   Relevance up to 03:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334983

The dollar fell on Tuesday in anticipation of the eagerly awaited inflation report. Markets are looking at US consumer inflation data for further clues to the Federal Reserve's policy outlook. Investors expect the headline annual CPI to fall to 6.2% from 6.5% in December and the core CPI, which excludes volatile food and energy prices, to fall to 5.5% from 5.7%. USD/JPY The Yen pair initially cheered the pullback in the Treasury bond yields before the Japanese government’s announcements of Bank of Japan (BoJ) officials triggered hawkish concerns and weighed on the prices. Also favoring the USD/JPY bears is the broad US Dollar pullback as traders brace for a positive surprise from the US Consumer Price Index (CPI) for January. Japan’s preliminary readings of the fourth quarter (Q4) Gross Domestic Product (GDP) data printed mixed readings. Following that, the official nomination of Kazuo Ueda as the BoJ leader weighed on the USD/JPY prices. Fresh fears of the US-China tension over the balloon shooting also challenge the sentiment and put a floor under the USD/JPY price. The USD/JPY pair started trading above 132.30 today, but then fell towards 131.90. The yen pair managed to bounce back and traded close to 132.30 again. USD/JPY is currently trading above 132.20. EUR/USD The European Commission's winter economic forecast published yesterday says that the EU economy is geared to avoid recession. The EUR/USD pair held a narrow range of 1.0730-1.0745 in morning trading, but surged up in the European session. The euro maintained its earlier gains against the slightly weaker US dollar, with EUR/USD changing hands around 1.0760. The latest US inflation report due to be released will be another driver of action. Read next: Brazil’s Bank Allows To Pay Taxes Using Cryopto, Ford Will Cut Jobs In Europe| FXMAG.COM GBP/USD The UK unemployment rate remained unchanged for the 3 months to December 2022, as expected. The number of people out of work for up to 6 months has increased, mainly among people aged 16 to 24. The number of people working in the UK increased by 74,000. in the three months to December, well above market forecasts for an increase of 40,000. and after an increase of 27,000 in last month. Meanwhile, from November 2022 to January 2023, the number of vacancies fell by 76,000. up to 1,134,000 UK wages rose 5.9% in December 2022 compared to the same month last year, beating estimates and down 6.4% from the previous print. What will be of concern, however, is the increase in average earnings without bonuses, which rose to 6.7%, beating the 6.5% forecast. The data compares with market forecasts of growth of 6.2% and 6.5%, respectively. In real terms, adjusted for inflation, the increase in total and regular wages fell by 3.1% in the year from October to December 2022 for total wages and by 2.5% for regular salaries. GBP/USD has gathered bullish momentum and climbed toward 1.2200 in the European trading hours. AUD/USD The Australian and New Zealand dollars tried to hold their gains on Tuesday after a rebound on Wall Street boosted global risk sentiment and Australian data underlined the case for further domestic interest rate hikes. Currently, the price of the Australian pair is around 0.6970. Source: investing.com, finance.yahoo.com

The Australian dollar is unchanged on Tuesday, after starting the week with strong gains. In the European session, AUD/USD is trading at 0.6966. Australia’s Business Confidence jumps Australia’s NAB Business Confidence rebounded in January, rising from 0 to 6 and above the forecast of 1 point. Business Conditions rose to 18, up from 13 and higher than the forecast of 8 points. This follows three months of softening in late 2022. The NAB noted that firms are more optimistic about global growth and the jump in business conditions is a sign that the economy is more resilient than previously expected. The positive news failed to send the Aussie higher, as the markets are waiting for today’s US inflation report. Reserve Bank of Australia Governor Lowe will be on the hot seat when he appears before parliamentary committees on Wednesday and Friday. Inflation rose to 7.8% in December, its highest level since 1990. The RBA has hiked rates by some 325 basis points in 10 months, yet inflation isn’t showing signs of peaking. The RBA raised rates by 25 bp last week and Lowe has signalled that more increases will be needed to tame inflation. Inflation isn’t expected to fall to the RBA’s target of 2% to 3% until 2025. Lowe has faced a barrage of criticism in his handling of inflation and interest rate policy and it’s far from certain that he will be reappointed for another term. Lowe is likely to face a grilling from the committee members, who may be thinking that “something isn’t working here”. All eyes on US inflation The US releases January inflation later today. Inflation is projected to fall to 6.2%, down from 6.5%, but there is unease in the markets that headline inflation might be stronger than expected. The sizzling jobs report indicated that the US labour market remains strong and January has seen higher energy and used car prices. The markets aren’t as confident that the Fed will cut rates late in the year and if the inflation report is higher than expected, the markets could fully price in two more rate hikes. This would be a major shift towards the Fed stance, as Jerome Powell has been saying for months that the pace of rate hikes will likely be higher and longer than previously expected. Recent inflation reports have overestimated inflation and the US dollar has responded with sharp losses. Today’s inflation report will likely follow that pattern, and if inflation is weaker than expected, the dollar should lose ground. Conversely, the dollar should get a boost if inflation is higher than expected.   AUD/USD Technical 0.6962 is a weak resistance line, followed by 0.7080 0.6841 and 0.6761 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The dollar rose on Wednesday amid stubbornly high US inflation data and sharp interest rate talks from Federal Reserve officials. Year on year prices increased (CPI) by 6.4%. This is down from 6.5% in December, but above economists' expectations of 6.2%. The Core CPI, which excludes volatile food and energy prices, rose 0.4% as expected. More importantly, the underlying details of the report revealed that the core services' inflation, which the Fed pays close attention to, stood at 7.2% on a yearly basis. These figures showed markets that the disinflation has not picked up any steam in January and reminded that the Federal Reserve is unlikely to entertain the idea of a policy pivot. USD/JPY Kazuo Ueda, the Japanese government's nominee to be the next governor of the Bank of Japan (BoJ), will inherit a difficult set of problems when he takes over from incumbent Haruhiko Kuroda on April 8. Japanese inflation y/y reached 4% in December, the highest level since January 1991. The new central banker will have to decide when and by how much the BoJ needs to start reducing its very loose monetary policy in order to keep inflation in check while allowing enough monetary slack to allow for economic growth. As other countries have recently learned, once inflation takes root, it becomes increasingly difficult to bring it down. The yen pair after yesterday closed trading near 133.00 today in the first hours of trading USD/JPY started a decline towards 132.55. The drop in the first hours of trading was not sustained and the pair rose above 133.00. At the time of writing, the yen pair is trading at 133.31. EUR/USD The EUR/USD pair started the day trading above 1.0740 but fell towards 1.0710 in the following hours. EUR/USD gained momentum in the European session and traded near 1.0730 but lost momentum and is now trading around 1.0715. According to ING, remarks by European Central Bank President Christine Lagarde later probably won't move the euro materially. EUR/USD pair should remain driven by dollar moves and faces near-term "downside risks" as the market raised its U.S. interest rate expectations following Tuesday's higher-than-expected inflation data. Read next: In The United States The Demand For Warehouse Space Is Still Growing| FXMAG.COM GBP/USD The British pound fell this morning after the UK CPI. The report showed weaker than expected inflation data, both y/y and m/m, concerning headline and core inflation, respectively. The UK's Office for National Statistics reported on Wednesday that the Consumer Price Index declined 0.6% on a monthly basis in January, causing the annual rate to retreat to 10.1% from 10.5%. The Core CPI also edged lower to 5.8% from 6.3% on a yearly basis, coming in lower than the market expectation of 6.2%. Although it's too early to say how these figures could influence the Bank of England's (BoE) policy outlook, the reaction suggests that markets have scaled back hawkish BoE bets. The Cable pair started trading at a high of 1.2175 on Wednesday, but in the following hours it started to fall initially to 1.2150 and then to 1.2100. Currently, GBP/USD is below 1.2100, at 1.2076. AUD/USD The Aussie pair is just below 0.6900. The AUD/USD pair is under strong selling pressure on Wednesday and is pulling further back from its over-week high. The RBA's latest monetary policy statement showed the central bank revised its inflation forecast for this year higher, saying price pressures were spreading to services and wages. The communiqué suggests two more interest rate hikes in the coming months and possibly a third if inflation remains high. Source: investing.com, finance.yahoo.com

With demand dwindling on Wednesday, AUD/USD fell and reached the target support level of 0.6873, which is also January 19's low. It seems like the bearish trend will continue today as the candlestick opened under the balance and MACD lines. If the pair consolidates under the achieved level, it is likely that the price will head towards the support level of 0.6730. After all, it is firmly fixed under the balance and MACD lines in the four-hour (H4) timeframe. There is a slight struggle around the support level of 0.6873, but since the Marlin oscillator is in negative territory and the daily trend is downward, the level can be overcome soon. After the price fixes under this level, there will be a further move towards 0.6730.   Relevance up to 03:00 2023-02-17 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335249

Summary:  In yet another sign of likely re-acceleration in cyclical growth, US retail sales surprised on the upside. Although Fed rate pricing was unchanged with terminal rate above 5.25%, US equities reversed early losses to close in some gains after a strong European session. Dollar rose to fresh highs before softening later, as AUD was troubled by tumbling metal prices and GBP took a hit with cooler inflation print. Crude oil prices still depressed despite IEA raising the demand outlook, and Gold is close to testing key support levels.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) advanced despite rate fear U.S. equities declined initially following a strong retail sales report that further reduced the probability of any rate cut in 2023 and to the contrary, increased the odds that the Fed may need to hold rates higher for longer. Nonetheless, the stock market was able to walk away from the good-news-is-bad-news script and spent the rest of the day clawing back the early losses and finishing the session higher.  The S&P500 gained 0.3% and Nasdaq 100 advanced 0.8%. Communication services and consumer discretionary, each rising 1.2%, led the advance in the S&P 500. Airbnb (ABNB:xnas) jumped 13.3% after reporting an earnings beat. Devon Energy (DVN:xnys) was the worst performer within the S&P500. The oil and gas producer plunged 10% after reporting a decline in Q4 earnings. The ADR of Taiwan Semiconductor Manufacturing (TSM:xnys) lost 5.3% following filings showing that Warren Buffett’s Berkshire Hathaway reduced its stake in the chip maker. Cisco (CSCO:xnas) gained 3.5% in the extended-hour trading after reporting quarterly revenues and earnings beating estimates and raising guidance for the rest of the year. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) rose further on solid retail sales Yields on the 10-year Treasury notes jumped 6bps to 3.8% following a stronger-than-expected retail sales report and a rebound in the Empire State Manufacturing Index. Headline retail sales jumped by the most in almost two years. While the 20-year Treasury bond auction received decent demand with bid/cover ratio at 2.54, new issuance of around USD30 billion from corporate, including USD24 billion from Amgen weighed on the market. Yields on the 2-year climbed 2bps to 4.63%. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) dragged by property stocks Hang Seng dropped 1.4% on Wednesday to levels last seen on January 4 and pared its 2023 gain to only 5.2%. The aggregate balance held by banks at the Hong Kong Monetary Authority, a proxy of interbank liquidity, fell to HK80 billion, following HKMA’s intervention to sell USD against HKD to cap the USDHKD from going above 7.85 the upper limit of the special administrative region’s link-exchange-rate regime. State-owned Economic Daily in the mainland warns about the re-emergence of speculative activities in properties in some cities and calls for more targeted approaches in support of genuine household demand for housing. Chinese developers retreated, with Country Garden (02007:xhkg) falling 5.6%, China Overseas Land & Investment (00688:xhkg) losing 4.6%, and Longfor (00960:xhkg) down 3.5%. Sportswear company Anta (02020:xhkg) dropped 3.6% on speculation of majority shareholders moving shares to the CCASS clearing system to get ready for a sale. Baidu (09888:xhkg) bucked the market decline and rallied over 3.8% supported by the somewhat return of the hype on the AI-generated content concept. In A-shares, CSI300 fell 0.5%. AI-generated content concept stocks advanced while real estate, domestic consumption, financial, healthcare, and non-ferrous metal names retreated. Australia equities (ASXSP200.I) moved lower to one-month lows, weighted by CBA. Gold miners and coal companies' results ahead Yesterday Commonwealth Bank, Australia’s largest lender, issued a cautious outlook as its customers are feeling ‘significant strain’. Its shares sank about 6%, falling from their record highs to $103, while also dragging down the broader Australian share market (ASXSP200.I). Australia’s biggest bank and lender reported disappointing profit results and guided for a challenging year ahead - putting aside more capital for bad debts, as higher price pressures continue to hurt consumers, along with falling home prices. Its net interest margin came in at 2.1%, which was on par with expectations, but its cash profit missed expectations, despite rising 8.6% YoY to $5.15 billion (vs $5.17 billion Bloomberg consensus). The big Bank announced a $1 billion share buy-back and consensus expects 2023 profits to hit another record, and for margins to improve – that’s good to know for long term investors. However, for potential traders, it’s worthwhile noting, yesterday CBA shares gapped down, meaning the market may fill that gap and buy the dip today or in coming days. Today we will be watching NAB’s quarterly results as well as results from miners, coal giant Whitehaven Coal and gold company Evolution Mining with the market expecting strong results. FX: AUD and GBP lagged, JPY rallies at Asia open Further gains in the dollar were seen last night as yields continued to surge, albeit at a softer pace, after US retail sales also surprised to the upside. AUDUSD was the biggest loser on the G10 board amid tumbling metal prices and RBA governor Lowe refusing to step down. AUDUSD dropped 40bps as January employment data disappointed with a fall of 11.5k vs. expectations of +20k. GBPUSD plunged below 1.2100 on the cooler-than-expected inflation data. EURUSD also touched lows of 1.0660 despite Lagarde reiterating that the ECB intends to hike by another 50bps next month. JPY gains returned in Asia after USDJPY rose to 134+ levels overnight, with Japan export data surprising to the upside with a rise of 3.5% YoY vs. -1.7% expected. Aussie dollar falls as AU jobs data misses. Watching AUDUSD and AUDGBP The Aussie dollar stumbled again, falling 0.4% after Australian employment data came out weaker than expected, with the unemployment rate surprisingly rising to 3.7% (vs the market expecting a steady rate), while jobs surprisingly fell 11,500 when the market expected 20,000 jobs to be added. We saw the AUD lose its footing yesterday after CBA guided for a cautious outlook, setting to the tone for a pull back on spending in Australia. Also consider watching the AUDGBP after the UK received slightly softer than expected UK CPI, which allows the bank of England to sit on their hands for a little longer, while the RBA can keep hiking following hotter than expected CPI.  Crude oil (CLH3 & LCOJ3) lower on inventory build despite IEA’s bullish demand outlook A series of signals from US CPI reported on Tuesday to retail sales print out last night suggest more ammunition for the Fed to raise rates. This has boosted the market pricing of the Fed terminal rate, and dollar strength is back in focus, weighing on commodity prices. Crude oil prices extended their losses after US oil inventories rose 16.3mn barrels to 471mn barrels against expectations of 1.17mn. WTI prices were still below $79/barrel while Brent stayed close to $85. The International Energy Agency (IEA) raised its demand growth estimates by 0.1mb/d to 2mb/d for 2023, but this was overshadowed by swelling US oil inventories. Gold (XAUUSD) close to testing key support Gold prices fell further to $1830/oz as US yields surged higher after the January CPI print, and a hawkish tilt was also seen in Fed commentaries. Last night, US retail sales was also hot suggesting more room for the Fed to hike rates, which boosted the USD. The next important levels include the 1,829 level, which is the 38.2% retracement of the rally off the November lows, the 1,809 area which was broken on the way up, and then the 200-day moving average, currently coming in just above 1,775. Pressure on gold miners to do more deals is rising, despite Newcrest’s rejection of the takeover bid from the world’s biggest gold miner Newmont (more below).  Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM What to consider? US retail sales jump higher January retail sales in the US jumped higher by the most in almost two years, in another signal that the US consumer demand is holding up strongly despite high inflation and interest rate pressures. Retail sales were by 3.0% from a decline of 1.1% in December and above the 1.8% expected. Strength was broad-based, with ex-gas/autos rising 2.6% from the prior -0.7%. The control group, which is a useful gauge of consumer spending data, rose 1.7%, also beating expectations of 0.8% and above the prior -0.7%. Factory output also beat estimates, rising 1.0%, although industrial production was flat vs. +0.5% gains expected, mostly weighed by reduced heating demand in January. Geopolitics on watch keeps Saxo’s Defense basket in focus Russia said its troops had broken through two fortified lines of Ukrainian defenses on the eastern front, as the one-year mark of the invasion approaches. The advances come as Western allies announced more military aid for Kyiv including artillery rounds. The situation may continue to become more tense as Ukraine forces take the time to get trained with the new US equipment. Meanwhile, China is warnings retaliation against US entities involved in the shooting of the balloon. Biden is considering a public address on the downing of an alleged Chinese spy balloon and other unidentified objects. With geopolitical tensions continuing to be on a rise, Saxo’s equity theme basket on Defense remains worth a consideration. Teher were also reports that Germany is poised to increase its defense budget by as much as €10 billion next year, which continues to suggest strong defense focus in the coming years. Newcrest rejects Newmont's takeover bid  Newcrest Mining (NCM) rejected the takeover by Newmont saying it undervalues the company, but kept the door open to a revised offer. Australia’s biggest gold miner reported broadly stronger than expected results – given the rise of the gold price. Half year earnings (EBITDA) hit US$919m, that was 4% above consensus. And the gold giant declared stronger than expected dividends of $0.15 per share for the half-year and a $0.20 special dividend. However, net debt rose far more than expected. NCM retained expectations for a strong 2H operational performance. For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Markets Today: US retail sales soar in another sign of a hot economy – 16 February 2023 | Saxo Group (home.saxo)

AUD/USD rebounds from 0.6865-70 support confluence to consolidate biggest daily loss in two weeks. Convergence of head-and-shoulders’ neckline, two-month-old ascending trend line challenges bears. Buyers need validation from 21-DMA to retake control. AUD/USD grinds near intraday high surrounding 0.6915 as it reverses the losses post Australian employment data release during early European morning on Thursday. In doing so, the Aussie pair portrays a recovery move from the 0.6865-70 support confluence that encompasses the lower line of the six-week-old head-and-shoulders (H&S) bearish chart pattern and a two-month-old ascending trend line. It’s worth noting, however, that the bearish MACD signals and the steady RSI (14) line join the Aussie pair’s sustained trading below the 21-DMA to challenge the bullish bias unless the quote rises past the immediate DMA hurdle surrounding the 0.7000 psychological magnet. Even so, the weekly near 0.7030 and the monthly peak of 0.7157 could challenge the AUD/USD bulls afterward. In a case where the AUD/USD buyers remain in the driver’s seat past 0.7157, the May 2022 high near 0.7285 will be on their radars. On the contrary, a successful downside break of 0.6865 key support level is necessary for the Aussie pair bears to keep the reins. Following that, the 200-DMA surrounding 0.6800 and the late 2022 low near 0.6630 may act as validation points during the theoretical south-run targeting the 0.6500 round figure. Overall, AUD/USD remains bearish but the downside move needs validation from 0.6865. AUD/USD: Daily chart Trend: Limited recovery expected remaining time till the new event being published U.S.: Leading Indicators

The dollar stalled on Thursday as investors scooped up higher-risk currencies after a string of strong US economic data bolstered confidence in the global growth outlook, even as the Federal Reserve appears poised to raise interest rates further. However, the question for market watchers is how well the economy can hold up, especially as interest rates are much higher than many initially thought. The US Bureau of Labor Statistics will publish data on the producer price index (PPI) for January. It is forecast that in annual terms the PPI will fall to 5.4% from 6.2% in December and the core PPI will fall to 4.9% from 5.5%. USD/JPY The yen pair started the day trading above 134.00, but the upward momentum was not maintained and USD/JPY fell below that level to 133.70. In the following hours, USD/JPY tried to make up for losses. At the time of writing, the yen pair is close to 134.00 and trading at 133.9520. The appointment of former BJ board member Kazuo Ueda as governor of the central bank cooled speculations about an early normalization of interest rates. In the past, Ueda has warned of the danger of premature interest rate hikes, putting an end to any fears of higher interest rates in the foreseeable future. The perception that Ueda could improve YCC, given accelerating inflation, could at least limit USD/JPY's rise. EUR/USD EUR/USD regained traction after Wednesday's declines and moved into positive territory just above 1.0700 early in the day on Thursday. The EUR/USD pair is trading slightly above 1.07. European Central Bank President Christine Lagarde told the European Parliament on Wednesday that she intended to raise key interest rates by 50 basis points (bps) in March. Lagarde reiterated that core inflation in the euro area is still high and price pressures remain strong. Later in the day, ECB Chief Economist Phillip Lane and ECB Executive Board Member Fabio Panetta will deliver speeches. If ECB officials leave the door open to additional rate hikes after March, euro losses are likely to remain contained in the short term. Read next: Tesla Will Make Supercharger Network, Visa Will Allow The Use Of Cryptocurrencies To Settle Transactions| FXMAG.COM GBP/USD The Bank of England has already signaled it may stop raising interest rates in March, and Wednesday's inflation figures reinforced that view. Softer-than-expected January UK inflation data weighed heavily on sterling during European trading hours on Wednesday. GBP/USD is trading positive around 1.2050 on Wednesday. Positive turnaround in risk sentiment helps pair maintain gains as investors await US macro data releases. The UK inflation data released yesterday surprised negatively, which resulted in lower expectations for rate hikes. This also followed positive employment data, with market participants now pricing in a peak rate below 4.5%. This week's positive data could be the stimulus the Bank of England (BoE) needed to signal an early pause in rate hikes that could see GBP face further selling pressure. AUD/USD The recent decline of the Australian dollar against the US dollar reflects the disparity in the growth prospects of the two economies. This morning's decline from the dismal Australian jobs was no exception - employment fell for the second month in a row in January, while the unemployment rate rose to its highest level since May. The pair has maintained its intraday gains for the first half of the European session and is currently trading near the 0.6920 region. Source: investing.com, finance.yahoo.com

It has been a busy session for the Australian dollar, which started the day with losses but has recovered. In European trade, AUD/USD is trading at 0.6919, up 0.23%. Mixed Australian data Australia delivered some mixed data earlier today. The headline Employment Change for January surprised on the downside at -11,500 after -14,600 prior, well below the forecast of 20,000. There was better news on the inflation front, as Consumer Inflation Expectations for February fell to 5.1%, down from 5.6% expected and prior. The Australian dollar initially declined after these releases but has recovered and eked out small gains. The Aussie had a miserable outing on Wednesday, falling 1.1%. This was courtesy of hawkish remarks from RBA Governor Lowe, which unnerved investors. Lowe appeared before a parliamentary committee and confirmed that further rate hikes are on the way. The central bank has tightened sharply but this has not brought down inflation. In December, CPI hit 7.8%, the highest level since 1990, which Lowe admitted was “way too high”. The double whammy of rising rates and red-hot inflation is squeezing households and businesses, but Lowe is insistent that the number one priority is to curb inflation and avoid inflation expectations from becoming entrenched. US retail sales surprised with a huge 3% gain in December, the largest gain since January 2022. This rosy reading comes on the heels of an inflation release that was higher than expected. These strong numbers should have been bullish for the US dollar, as the Fed will likely raise rates even higher in order to put a brake on the strong economy. Investors, however, shrugged off the inflation and retail sales data and sent equities higher on Wednesday with a “bad news is good news” view. With risk appetite still intact, the US dollar hasn’t been able to capitalize on the inflation and retail sales releases. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM AUD/USD Technical AUD/USD is testing resistance at 0.6929. Above, there is resistance at 0.7001 0.6846 and 0.6774 and providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

AUD/USD remains under some selling pressure for the third successive day on Friday. Hawkish Fed expectations, recession fears underpin the buck and weigh on the major. Technical selling below the 50-day SMA further contributes to the ongoing downfall. The AUD/USD pair extends this week's retracement slide from the 0.7030 area and continues losing ground for the third successive day on Friday. The downward trajectory drags spot prices to the lowest level since January 6 during the Asian session and is sponsored by broad-based US Dollar strength. In fact, the USD Index, which tracks the Greenback against a basket of currencies, hits a fresh six-week high amid firming expectations for further policy tightening by the Fed. Investors seem convinced that the US central bank will stick to its hawkish stance in the wake of stubbornly high inflation. Moreover, the incoming upbeat US macro data points to an economy that remains resilient despite rising borrowing costs. This, along with the recent hawkish remarks by several FOMC members, suggests that the Fed will continue to hike interest rates. The markets are now pricing in at least a 25 bps lift-off at each of the next two FOMC policy meetings in March and May. This, in turn, pushes the yield on the benchmark 10-year US Treasury note to its highest level since late December and is seen underpinning the buck. Meanwhile, worries about economic headwinds stemming from rapidly rising interest rates weigh on investors' sentiment. This is evident from a weaker tone around the equity markets, which further benefits the safe-haven USD and drives flows away from the risk-sensitive Aussie. Apart from the aforementioned fundamental factors, the AUD/USD pair's downfall could also be attributed to some technical selling following the overnight break below the 50-day SMA. This comes on the back of the recent repeated failures to find acceptance above the 0.7000 psychological mark and might have already set the stage for further losses. Moreover, bearish oscillators on the daily chart add credence to the near-term negative outlook. This, in turn, suggests that the path of least resistance for the AUD/USD pair is to the downside. In the absence of any relevant market-moving economic data, any attempted bounce will now be seen as a selling opportunity and remain capped near the 50-day SMA support breakpoint.

The dollar rose to a six-week high on Friday as strong US economic data and comments from Federal Reserve officials prompted investors to bet on another rate hike. The Fed's target range is currently between 4.5% and 4.75%. Economists at Goldman Sachs on Thursday raised their expectations for Fed rate hikes this year. After previously expecting two more hikes, they said they now expect three more hikes of 25 bp in March, May and June. That would push interest rates to 5.25% to 5.5%. The US Economic Report will not include any macroeconomic data releases that could significantly affect the behavior of the US dollar. As such, market participants will pay close attention to risk perception. USD/JPY The yen pair hit its highest level in almost two months. USD/JPY has been trending up since the start of the day. USD/JPY started the day trading just above 134.07 and has now crossed the 135.00 mark. EUR/USD EUR/USD extended its decline during the Asian trading hours and hit its lowest level since early January below 1.0650. The technical outlook for the short-term pair shows that the bearish bias remains intact. Meanwhile, comments from Federal Reserve (Fed) and European Central Bank (ECB) officials add to the burden on the EUR/USD pair. The euro could weaken further as the market's interest-rate rise expectations for the European Central Bank may be overdone given comments from ECB members about the risks of excessive policy tightening. ECB board member Fabio Panetta said on Thursday that the ECB should consider the risk of unduly tightening policy and argued that the bank should not commit unconditionally in advance to future policy moves. From a more neutral point of view, the ECB's chief economist Philip Lane said he was open-minded about the exact amount of monetary tightening that would be needed to meet the inflation target. On the other hand, Cleveland Fed President Loretta Mester reiterated that the interest rate will have to rise above 5% and stay there for some time for the Fed to control inflation. Read next: Wyoming Prohibits Forced Disclosure Of Private Cryptographic Keys By US State Courts, JP Morgan Projections Of FX Market| FXMAG.COM GBP/USD GBP/USD extends losses towards 1.1900 in the early European morning. The strength of the US dollar (USD) had a big impact on the GBP/USD exchange rate in the second half of the week. Hawkish comments from Fed policymakers and the latest released macroeconomic data have revived expectations that the Fed may decide to make additional interest rate hikes even after May. Data from the UK showed that retail sales rose by 0.5% in January, as compared to market expectations for a fall of 0.3%. While this reading was better than the market's 0.3% decline, December's -1% reading was revised lower to -1.2%, preventing Sterling from taking advantage of the data. AUD/USD Reserve Bank of Australia (RBA) Chairman Lowe's comments did not stop the AUDUSD rate from falling. Governor Lowe warned that the RBA was keeping an open mind and their view was that further rate hikes were needed. Lowe also stated that interest rates are not on a predetermined path as it takes 18-24 months for rate hikes to make an impact in the economy. The pair of the Australian is in a downtrend on Friday. AUD/USD has fallen well below 0.69 and is trading below the 0.6820 level. Source: finance.yahoo.com, investing.com

For the forex market, the most important event was the publication of the US CPI and speeches by representatives of the Fed and the ECB. The Dollar Index (DXY) has seen gains recently thanks to Fed officials, which is somewhat surprising as the markets seemed steady after the Non-Farm Payroll (NFP), CPI and Retail Sales figures. In addition, the Fed's guidance has been largely rejected recently, but as the pressure to maintain tight monetary policy in the US increases, so does its impact on market participants. The Fed's Mester mentioned that "January's CPI figures showed there is still a long way to go in cooling down inflation," again adding to the messages sent by yesterday's speakers giving further support to the dollar. USD/JPY The yen pair started the week trading at a weekly low of 131.5020. Throughout the week, USD/JPY was in an uptrend. The weekly high of USD/JPY was above 135.00 at 135.0840. After that it dropped below 135.00 to 134.1140 where it closed the week. As Federal Reserve officials continued to reiterate their commitment to containing price pressures through tight monetary policy, compelling arguments for another 50 basis-point rate hike at the March FOMC meeting supported the strengthening of the dollar versus the yen. Although Tuesday's appointment of Kazuo Ueda as a possible successor to incumbent BoJ (Bank of Japan) governor Haruhiko Kuroda gave the Japanese yen a slight respite, losses were limited. EUR/USD The euro/dollar pair started trading at 1.0681, and rose for a day and a half to reach a weekly high at 1.0789 on Tuesday. And from this level, the EUR/USD pair was in a downtrend where the pair was heading towards 1.0620. On Friday, in the European session, it approached this level and thus recorded the lowest trading level of the week, and then bounced back and closed the week at a level close to 1.07, 1.0697. ECB Executive Board member Fabio Panetta said on Thursday that the ECB should consider the risks of over-tightening the policy and argued that the bank should not unconditionally pre-commit to future policy moves. Despite the rather dovish comments, money markets priced in a terminal ECB rate of 3.75% for the first time - implying that the ECB still has another 125 bps worth of hikes to come. GBP/USD The Cable pair started the week at 1.2053. And similarly to the EUR/USD pair, the GBP/USD pair remained in a bullish trend until Tuesday's US session. GBP/USD, like EUR/USD, had a weekly high on Tuesday above 1.22 (1.2241), then the pair began its decline. The decline in the pair continued until Friday until GBP/USD reached its lowest trading level (1.1916), after which the cable pair rebounded and ended the week above 1.20 at 1.2044. The UK's Office for National Statistics reported on Friday that Retail Sales increased by 0.5% on a monthly basis in January AUD/USD The AUD/USD trade start was at 0.6916. The movement of the Australian pair was linked to its European counterparts (GBP, EUR). On Tuesday, AUD/USD reached its highest level of the week - 0.7016. In the following days, the pair was falling towards 0.6825, where on Friday below this level, at 0.6814, it reached its lowest level. Towards the end of the trade, AUD/USD rebounded and closed the week at 0.6880. Source: investung.com, finance.yahoo.com

AUD/USD broke through the support level of 0.6873 last Friday. It fell down by 60 pips, but by the close of the day came back to the level and is now trying to hold on to it. As the Marlin oscillator has been moving sideways for the third session, another consolidation below it could open the way towards the target support at 0.6730. With the pair being under the balance and MACD lines, it is likely that the trend will remain bearish. However, the micro-consolidation of two candlesticks at 0.6873 on the four-hour (H4) chart could prompt a brief rise to the MACD line at 0.6906. A breakdown of this resistance could push the pair up to 0.6939, which is the top of February 16. It will be difficult for the pair to overcome 0.6906 because the Marlin oscillator will meet resistance around the zero level. It could reverse from it synchronously with the price from the MACD line. A price consolidation under 0.6873 on the H4 would be the first sign of the intention to continue the decline. A consolidation under 0.6873 on the daily (D1) chart will give off the same effect. The target level is 0.6730   Relevance up to 03:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335505

AUD/USD has touched a high of 0.6900 as the USD Index has surrendered its morning gains. Persistent inflation in the United States has bolstered the odds of more interest rate hikes by the Federal Reserve ahead. The minutes from the Reserve Bank of Australia might remain hawkish for further guidance as inflation has still not peaked yet. AUD/USD has negated the downside break of the H&S pattern and has shifted into a bullish trajectory. AUD/USD touched the round-level resistance of 0.6900 in the early European session. The Aussie asset has been strengthened as investors have shrugged-off uncertainty associated with US-China tensions and the launch of three projectiles from North Korea near Japan’s Exclusive Economic Zone (EEZ). The US Dollar Index (DXY) has surrendered its entire gains added in the Asian session and is looking to continue its downside journey ahead. Meanwhile, the risk appetite theme has regained traction, which is supporting the risk-perceived assets. S&P500 futures have turned volatile ahead of the market holiday on account of Presidents’ Day. People’s Bank of China maintains the status quo on interest rates The Australian Dollar remained in action after the People’s Bank of China (PBoC) kept its monetary policy unchanged. An interest rate decision of unchanged policy was widely anticipated as the Chinese economy is focusing on accelerating the economic recovery after remaining bound by pandemic controls. The People’s Bank of China has kept one-year and five-year Loan Prime Rates (LPR) unchanged at 3.65% and 4.30% respectively. It is worth noting that Australia is a leading trading partner of China and the continuation of expansionary monetary policy by the People’s Bank of China will strengthen the Australian Dollar ahead. Fresh concerns for higher US Inflation call for more rates by the Fed Last week, a majority of economic indicators cleared that it would be early for the Federal Reserve to announce a win in the battle against stubborn inflation as it is set to surprise the market ahead. The United States Consumer Price Index (CPI) landed higher at 6.4% than the projections of 6.2%, Producer Price Index (PPI) released at 6.0% higher than the consensus of 5.4%. And, the release of the monthly Retail Sales data at 3.0% against the consensus of 1.8% was the last nail in the coffin, which cleared that consumer spending is gaining traction. A note from Goldman Sachs states the investment banking firm expects the U.S. Federal Reserve to raise interest rates three more times this year, lifting their estimates after data pointed to persistent inflation and a resilient labor market, as reported by Reuters. Spotlight shifts to Reserve Bank of Australia and Federal Reserve’s minutes This week, the release of the minutes from the Reserve Bank of Australia and Federal Reserve’s and Federal Reserve will lead from the front for the power-pack action in the Aussie asset. Federal Reserve policymakers are aware of the persistent nature of the US inflation, which is why hawkish guidance is expected on interest rates. The minutes from the Reserve Bank of Australia policy announced in the first week of February resulted in a ninth consecutive interest rate hike to 3.35%. Inflationary pressures in the Australian economy have not softened yet amid solid consumer spending, which is bolstering the case of hawkish guidance on the monetary policy. Later this week, Australia’s Labor Cost Index (Q4) data will remain in focus. The economic data is seen at 3.4% vs. the prior release of 3.1% on an annual basis. And, the quarterly data is seen lower at 0.7% against the prior release of 1.0%. AUD/USD technical outlook AUD/USD has negated the downside break of the Head and Shoulder chart pattern formed on a four-hour scale. The responsive buying active from the market participants has pushed the Aussie asset above the neckline of the aforementioned chart pattern plotted from January 10 low at 0.6860. The asset has scaled above the 20-period Exponential Moving Average (EMA) at 0.6888, which indicates that the short-term trend is bullish now. The Relative Strength Index (RSI) (14) has rebounded into the 40.00-60.00 range, which indicates that the asset is no more bearish now

The dollar fell on Monday but stayed close to Friday's six-week high as a recent wave of positive economic data boosted market expectations for a tightening of the Federal Reserve's monetary policy. USD/JPY The USD/JPY pair started trading at 134.32 and then rose rapidly towards 134.50. The momentum was not extended and the yen fell to 134.00. At the time of writing, USD/JPY is trading slightly above 134.00 at 134.0290. The geopolitical risk intensified over the weekend when North Korea fired ballistic missiles into eastern waters overnight after an intercontinental ballistic missile was launched on Saturday. Saturday's launch landed off Japan's west coast and prompted joint exercises between the US and South Korea as well as the US and Japan. The sister of North Korean leader Kim Jong Un said the use of the Pacific as a "training ground" would depend on the behavior of US forces and warned of the growing presence of US military assets in the region. This comes as rumors swirl of a new Russian offensive in Ukraine and ongoing US-China spy balloon issues. Markets are still awaiting guidance from the new leadership of the Bank of Japan (BoJ), but hopes for a move away from ultra-easy monetary policy may be overly optimistic. EUR/USD European Central Bank (ECB) policymaker Francois Villeroy de Galhau reiterated that inflation in the eurozone is "too fast and probably persistent", while arguing that the ECB needs to be more predictable in its communications and provide a short-term policy outlook. Later in the day the European Commission will release flash consumer confidence index for February, which is expected to slightly improve to -19.0 from -20.9 in January. Poor trading conditions, however, will likely see the pair's shares confined to a narrow channel. The EUR/USD pair started the week at 1.0686 but was falling. After the fall, the EUR/USD pair rose towards 1.07, but failed to maintain momentum and the pair is again around 1.0680. Read next: EY Will Review Darktrace Key Financial And Control Processes| FXMAG.COM GBP/USD After last week's hesitant action, GBP/USD managed to rebound around the mid-1.2000 area early Monday. The cable pair has been falling from above 1.2050 and is currently trading at 1.2025. Sterling could fall if the Bank of England raises interest rates by 25 basis points in March, but signals that this will be the last hike. Some worrisome economic data from the UK dampened additional rate hikes after March, and money markets now appear to favor a break from the May meeting. The widening of the US-UK rate differential has recently weakened sterling, which could get even worse if the BOE formally deems a potential March interest rate hike to be its last, and given the US data still favors a tightening of the rate path interest rates for the Federal Reserve. AUD/USD The AUD/USD pair is based on Friday's good rebound from around 0.6800, the lowest level since January 6, and gaining strong traction on the first day of the new week. The Australian pair was growing towards 0.69. AUD/USD managed to drink through 0.69 and trade above that level. This momentum was interrupted and the pair dropped to 0.6901. Source: investing.com, finance.yahoo.com

Central banks are not to be envied in this cycle of monetary tightening! They have to choose between suppressing the highest inflation in decades and the danger of plunging their own economies into recession. What could be more difficult? Political pressure! The head of the Reserve Bank of Australia has faced unprecedented criticism for high rates. He is accused of intent to cause a recession and advised to choose his words when talking about continuing the cycle of monetary restriction. It is understandable that politicians are not happy with the high cost of borrowing, which limits credit, slows economic growth and creates problems in the labor market. Thus, in January, unemployment in Australia rose to an 8-month high of 3.7%, employers laid off 11,000 people, and the January figure was revised downward to -20,000. When justifying previous cash rate hikes, the RBA figured the strength of the labor market, but if scars from tighter monetary policy begin to appear, shouldn't the process be put on hold? Dynamics of Australian employment In fact, one report is unlikely to change the regulator's outlook. The central bank is doing the right thing, because Australian inflation is not slowing down. Under these conditions, it is necessary to continue the monetary restriction cycle. Yes, there is political pressure on Philip Lowe, but it can hardly be compared to Donald Trump's pressure on Jerome Powell. At one time, the former U.S. president called the Fed chairman America's enemy for his unwillingness to lower the federal funds rate. The central bank's independence is the key to continued monetary tightening, which is bullish for the AUDUSD. However, the main growth driver for the pair is the events in the global economy in general and China in particular. Read next: EY Will Review Darktrace Key Financial And Control Processes| FXMAG.COM Another liquidity injection by the People's Bank of China (PBoC) into the banking system worth 632 billion yuan indicates that the recovery of the Chinese economy after the lifting of the COVID restrictions is in full swing. Yes, the PBoC did not reduce key rates, but the local authorities have already done so for it, which in a directive order, obliged commercial banks to reduce mortgage rates. In fact, the PBoC should be thankful because monetary policy divergence could lead to a serious weakening of the yuan and capital outflows. It is crucial for Australia and its currency that its major trading partner gets better and is ready to provide half of the global GDP growth in 2023. The faster this process goes, the better for the AUDUSD bulls. Technically, a Wolfe wave reversal pattern formed on the daily chart of the analyzed pair. Its target is located near the level of 0.705. The formation of the pin bar with the long lower shadow is the evidence that the AUDUSD has found the bottom. As long as the Aussie is above $0.6886, it should be bought.   Relevance up to 11:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335563

AUD/USD has shifted its auction profile below 0.6900 amid the risk-off mood. Federal Reserve policymakers have been citing it would be premature to consider a pause in the policy tightening spell this year. Reserve Bank of Australia also considered the option of a 50 bps rate hike as the Australian inflation has not peaked yet. AUD/USD has confidently shifted above the neckline of the Head and Shoulder formation, indicating a bullish reversal. AUD/USD has surrendered the round-level support of 0.6900 in the early European session as investors getting worried that higher interest rates by western central banks are getting nightmares for the producers. The market sentiment is turning risk-averse ahead of the opening of the United States markets after a long weekend. S&P500 futures have extended their losses as the renewal of higher inflation projections after a significant jump in US Retail Sales has triggered fears of more rate hikes beyond March. The US Dollar Index (DXY) is making deliberate efforts in shifting its auction profile above 103.70. The recovery move by the USD Index in the Asian session was higher confident, however, further range extension is facing pressure. This week, the show-stopper will be the release of the Federal Open Market Committee (FOMC) minutes, which will release on Wednesday. Investors are expecting a sheer hawkish stance on the interest rate guidance as Federal Reserve (Fed) policymakers have been citing it would be premature considering a pause in the policy tightening spell this year. This has trimmed demand for US government bonds. Lower demand for government bonds has propelled the 10-year yields above 3.85%. Hawkish Reserve Bank of Australia minutes fail to support the Australian Dollar It was widely anticipated that Reserve Bank of Australia Governor Philip Lowe and his mates would be advocating for more interest rate hikes as Australian inflation is critically stubborn. The Australian Consumer Price Index (CPI) has refreshed its multi-decade of 7.8% and is showing no signs of softening ahead in spite of the fact that the Official Cash Rate (OCR) has been already pushed to 3.35%. The message from the RBA minutes was clear that more interest rates are warranted as strong consumer demand is not allowing Australian inflation to soften from its peak. According to the RBA minutes, policymakers also considered the option of 50 basis points (bps) interest rate hike considering the persistence of inflation. The RBA members also highlighted that the Unemployment Rate is the lowest in the past 50 years and job vacancies are extremely high, which is delighting households for flushing surplus funds into the economy. Aussie PMI is out, US PMI is due yet Apart from the hawkish RBA minutes, upbeat preliminary Australian S&P PMI (Feb) data has also failed to strengthen the Australian Dollar. The Manufacturing PMI landed at 50.1, higher than the consensus of 49.9 and the former release of 50.0. The Services PMI scaled firmly to 49.2 versus the estimates of 48.4 and the prior release of 48.6. Economic activities in the Australian economy are accelerating despite higher interest rates by the Reserve Bank of Australia, which indicates that consumer demand is extremely robust. In Tuesday’s New York session, preliminary US S&P PMI numbers will be keenly watched. The Manufacturing PMI (Feb) is seen lower at 46.8 vs. the prior release of 46.9. And the Services PMI is seen at 46.6 against the former release of 46.8. There is no denying the fact that producers have trimmed their dependency on borrowings from commercial banks due to higher interest rates by the Federal Reserve. And are exploiting their retained earnings to avoid higher interest obligations. Firms have postponed their expansion plans, therefore, a continuation of contraction in economic activities is highly expected. FOMC minutes to guide further movement to the FX market ahead The minutes from the Federal Reserve will provide a detailed explanation of hiking interest rates by 25 basis points (bps) in the February monetary policy meeting. The street always tries to remain ahead of the Federal Reserve (Fed) policymakers. Therefore, the major focal point for investors in the Federal Open Market Committee (FOMC) minutes is the meaningful cues that could provide guidance on interest rates. Information on the terminal rate and targets for inflation will be keenly watched. AUD/USD technical outlook AUD/USD has shifted its business above the neckline of the Head and Shoulder chart pattern plotted from January 10 low at 0.6860 on a four-hour scale. The responsive buying action from the market participants negated the downside break of the above-mentioned chart pattern. The 20-period Exponential Moving Average (EMA) at 0.6900 is acting as a cushion for the Australian Dollar. The Relative Strength Index (RSI) (14) has rebounded into the 40.00-60.00 range, which indicates a bullish reversal. A break into the bullish range of 60.00-80.00 will trigger the bullish momentum.

The dollar was parked below recent peaks on Tuesday, as a three-week rally faded and traders waited on economic data to figure out whether it's warranted to push the dollar up any further. Strong U.S. labour data and sticky inflation have raised U.S. rate expectations and supported the dollar's rally this month - Tuesday's European and U.S. manufacturing data and Friday's core PCE price index will guide the next steps. After an unannounced visit to Kiev, US President Joe Biden will visit Poland on Tuesday. Biden will reportedly talk about strengthening Poland's security by increasing NATO's presence in the country. USD/JPY USD/JPY regains positive traction on Tuesday and maintains its bidding tone throughout the first half of the European session. The pair is gradually approaching the level of 135.00. The yen pair at the time of writing is close to 134.70. The services PMI in Japan turned out to be much better than expected and from the previous reading. The manufacturing PMI was well below expectations, falling month-on-month. On the policy front, the European Central Bank has continued to aggressively tighten policy, despite signs that inflationary pressures may have peaked. The European Central Bank raised interest rates by 50 basis points at its February meeting to the highest level since late 2008, marking another hike of the same magnitude next month and reaffirming its commitment to fighting inflation. Source: investing.com EUR/USD The euro stayed below USD 1.07, oscillating around the weakest level since January 6. In the eurozone and Germany, the manufacturing PMIs turned out to be weak, below expected levels. Services PMI rose. And also ZEW economic sentiment showed an improvement in sentiment. Source: investing.com Read next: Baltic Pipe Is Alternative Energy Source For Poland| FXMAG.COM GBP/USD The data on public finances in the UK released this morning exceeded estimates. The pound strengthened on Tuesday after data showed an unexpected rebound in UK business activity, suggesting the economy could avoid a deep recession. The pound managed to break through 1.2100 and is currently trading just above. UK data showed private sector business activity surged in early February with the Composite PMI rising to 53 from 48.5, providing a boost to sterling. As the UK private sector is resilient to strong inflation, the Bank of England is likely to continue to raise its key rate without worrying about a deep recession. British Foreign Secretary James Cleverly said late Monday evening that they would hold further talks with the EU over the Northern Ireland Protocol in the coming days. Cleverly is also reportedly planning to address Tory MPs on Wednesday to give an update on the negotiations. Source: investing.com AUD/USD The minutes of the RBA meeting revealed most of what was already known to the market. The outlook for the Australian economy has many positive aspects, but a potential concern is that the CPI outperforms both PPI and wage inflation. The year-on-year CPI by the end of 2023 was 7.8%, and the PPI in the same period was 5.8%. Tomorrow the Australian Bureau of Statistics (ABS) will release the Wage Price Index. The AUD/USD pair came under renewed selling pressure on Tuesday and reversed much of the positive move from the previous day. The pair remains below the 0.6900 level for the first half of the European session. The Aussie pair is above 0.6880. Source: investing.com, finance.yahoo.com

The Australian dollar is in negative territory on Tuesday. In European trade, AUD/USD is trading at 0.6876, down 0.50%. RBA minutes indicate concern over inflation The Reserve Bank of Australia keeps getting in the way of the Australian dollar. RBA Governor Lowe appeared before a parliamentary committee last Wednesday and confirmed that further rate hikes were on the way as inflation was still unacceptably high. The Aussie responded by dropping 1.1%. The RBA minutes were released today and members expressed concern at the upside risk to inflation, noting that there was “more breadth and persistence” in inflation. The hawkish tone of the minutes has boosted rate-hike bets but the Australian dollar remains under pressure over concerns that the RBA is having trouble getting a handle on inflation, despite its aggressive rate-tightening cycle. Again, the Aussie has responded with losses. How much higher will interest rates go? That will depend to a large extent on upcoming data, starting with Wednesday’s Wage Price Index for Q4. Wages are expected to have climbed 3.5% y/y in Q4, up from 3.1% and the highest level since September 2012. Wages are an important driver of inflation and higher wages will make it more difficult for the Bank to curb inflation. The RBA minutes also indicated that members debated whether to raise rates by 25 or 50 basis points. Ultimately, the RBA opted for a modest 25-bp increase, which brought the cash rate to 3.35%. The money markets are projecting a terminal cash rate of 4.25% by August, which means that the RBA will likely be busy in the coming months. We’ll also hear from the Federal Reserve on Wednesday, with the release of the minutes from the February meeting. The Fed didn’t have any surprises and raised rates by 25 basis points. The markets will be looking to see how close the Fed was to hiking by 50 basis points. If the rate decision was a close call, the US dollar could continue to rally. Read next: The Pound Gained After The Publication Of PMI Reports, Euro Is Below 1.07, USD/JPY Pair Is Above 134.50| FXMAG.COM AUD/USD Technical AUD/USD is testing support at 0.6907. Below, there is support at 0.6784 There is resistance at 0.7001 and 0.7124 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

AUD/USD closed below the support level of 0.6873, which is what it has been unable to do since January 10. It continued to move down this morning. It seems that the target is the nearest support line at 0.6730 as the Marlin oscillator keeps on sliding down. Arriving in the oversold zone is possible. On the four-hour (H4) timeframe, the pair consolidated under the indicator lines and the resistance level of 0.6873. The Marlin oscillator is down, which suggests that the pair could reach the target level of 0.6730 soon. Relevance up to 03:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335740

The AUD/USD currency pair continues to decline steadily, despite hawkish signals from the Reserve Bank of Australia. The minutes of the RBA's February meeting, published yesterday, reflected the strong attitude of the regulator's members, who expressed their willingness to raise the interest rate within the next few months. The central bank refuted circulating rumors of a possible pause. But AUD/USD traders actually ignored this message: the aussie continues to follow the greenback, which, in turn, continues to strengthen its position across the market. What the RBA minutes say The AUD/USD pair was under pressure a few weeks ago after the release of key data on the growth of the Australian labor market in January. The data turned out to be weak in all respects: the unemployment rate rose to 3.7%, and the increase in the number of employed again turned out to be in the negative area. With a growth forecast of 20,000, a decrease of 11,500 was recorded. The negative dynamics of this indicator was due solely to the decline in full-time employment, while the part-time employment indicator, on the contrary, showed a strong growth. Note that the December Australian non-farm report also reflected the worsening situation in the labor market, so many analysts assumed that the minutes of the February meeting of the RBA would be dovish, even despite the growth of inflation indicators (consumer price index in Q4 unexpectedly exceeded forecast values). But the document published yesterday was clearly hawkish. In particular, the text of the minutes indicated that the Governing Council was considering a 25 or 50 basis point rate hike in February. The option of a pause was not considered at all. Recall that the RBA slowed down the pace of tightening of the monetary policy (up to 25 points) as far back as last autumn, that's why the announced option of a 50-point hike, which was "on the table" of the members of the regulator, demonstrates the hawkish attitude of the central bank. It signals that the RBA is considering two scenarios: either the central bank maintains the current pace or doubles down on the effort, returning to a 50-point rate of increase. That said, the minutes indicate that the further pace and duration of monetary tightening will "depend directly on incoming data and the Board's assessment of the inflation and labor market outlook." This is a rather streamlined phrase, which suggests that the RBA has "tied" its further decisions to the dynamics of inflation growth. In general, the document released yesterday reflected the intention of the RBA to raise the rate not only in March, but also in May (it is too early to talk about further prospects). At the same time, judging by the text of the February minutes, the central bank is considering two options: raising the rate by 25 points or by 50. Thus, the central bank de facto ruled out the option of a possible pause and guaranteed the maintenance of a hawkish rate at least until the end of the spring. Such hawkish attitude should promote the development of the upward trend. However, the aussie has received support from the RBA at a time when the greenback is gaining momentum across the market. Waiting for Fed minutes At the end of the U.S. session on Wednesday, another important document will be released: the minutes of the Fed's February meeting. The hawkish tone of this document may provide additional support to the U.S. dollar, which already feels quite confident against the background of strong non-farm payrolls and the combative mood of many representatives of the Federal Reserve. For example, one of the most influential members of the Fed—New York Fed President John Williams—has repeatedly stated that the regulator is likely to raise the rate to 5.5% (previously, the final level was assumed at 5.1%). At the same time, he urged the Fed to keep the rate at a high level "for several years." In one form or another, the hawkish position was voiced by other representatives of the Fed. The general essence of the voiced messages is that the regulator "has a lot of work to do" to control inflation. Conclusions The apathetic reaction of AUD/USD traders to the hawkish minutes of the RBA suggests that the Aussie is trading in the wake of the U.S. currency. The U.S. dollar, in turn, enjoys support from the Fed, whose representatives have tightened their rhetoric in response to a slowdown in inflation. Such a fundamental background contributes to the further development of the downward trend. Technically, the pair on the daily chart has overcome the 0.6850 support level (upper boundary of the Kumo cloud on D1) and is currently falling towards the bottom of the 68th figure. The next price barrier, which acts as the nearest target for the downward movement, is 0.6770. The main target of the downward trend is the level of 0.6720 (the lower boundary of the Kumo cloud on the same timeframe)   Relevance up to 10:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335794

The dollar rose slightly on Wednesday, continuing to trade near six-week highs on the back of strong economic data. Survey data released on Tuesday showed U.S. business activity unexpectedly rebounded in February to reach its highest in eight months. In the euro zone, a survey-based gauge of activity also surged, hitting a nine-month high. Investors' focus now turns to the release of the minutes from the Fed's latest meeting later on Wednesday, which could offer more insight into policymakers' plans. USD/JPY One pair is moving in a sine wave pattern today. In the first hours of trading, USD/JPY dropped to around 134.60 and then rose to around 1134.95. This move has been repeated once again, and USD/JPY is now heading down towards 134.65. Bond purchases and BOJ loans dominate the headlines in Japan. The Japanese yen found some support against the US dollar on Wednesday morning, while the Bank of Japan (BOJ) had to buy 10-year government bonds due to the yield breaking the upper limit set by the BoJ (0.5%) of their policy range. It was the second consecutive trading session during which this took place. BOJ's Tamura gave mixed messages, stating that loose monetary policy is now required, but future policy changes will be crucial at some point in the future. EUR/USD The movement of the EUR/USD pair in Asian Russia and at the beginning of the European traded in the range of 1.6550-1.6650. In the European session, the pair fell and is currently trading around 1.6300. Yesterday's data from the euro zone showed further improvement, with flash PMI beating estimates in the services sector, while production fell slightly. The Zew Sentiment Survey reflected an improvement in sentiment and optimism, with expectations and current conditions outperforming estimates in both the Eurozone and Germany. This morning brought German inflation data for January up from December, confirming comments from ECB President Christine Lagarde about a 50 basis point hike at the upcoming meeting Read next: Sweden And Finland Are Getting Closer To Becoming NATO Members| FXMAG.COM GBP/USD The cable pair in the Asian session kept its momentum above 1.21. The European session is not favorable for the gunt pair and the pair is below 1.21. At the time of writing, GBP/USD was trading at 1.2090. Sterling pulled back on Wednesday after rising sharply on stronger-than-expected British business activity as traders awaited consumer confidence data and focused on Britain's political headaches. The latest UK PMIs beat forecasts and showed business activity in the UK, especially in the services sector, picking up sharply in February. The latest data suggest that the UK economy may be improving, giving the Bank of England more wiggle room to increase interest rates. UK inflation is on the way down, but at a current level of 10.1% is sharply higher than the Bank of England’s (BoE) mandate of around 2%. Inflation is expected to fall quickly over the coming months, according to the BoE, as energy prices and the cost of imported goods fall. AUD/USD The AUD/USD pair adds to the significant losses from the previous day and remains under selling pressure for the second day in a row on Wednesday. The Aussie Pair is holding below 0.69. At the beginning of the day, AUD/USD started to fall to the level of 0.6830 and in the Asian session kept trading in the range of 0.6830-0.6840. In the first hours of trading in the European session, the Australian pair fell below 0.6820, but managed to rebound and at the time of writing was just above 0.6830. Source: finance.yahoo.com, investing.com

AUD/USD picks up bids to defend the bounce off key DMA, pokes five-week-old previous support. Bearish MACD signals, downbeat RSI keeps sellers hopeful. Buyers need to cross 0.6975 to retake control. AUD/USD holds onto the day-start rebound from a seven-week low as bulls attack the previous support line near 0.6835 during early Thursday morning in Europe. In doing so, the Aussie pair defends the bounce off the 200-DMA to print the first daily gains in three. It’s worth noting, however, that the recovery remains elusive amid bearish MACD signals and the downbeat RSI (14). Adding strength to the downside bias is the AUD/USD pair’s sustained trading beneath the support-turned-resistance line from late December 2022. That said, the AUD/USD bears are on the watch and waiting for a clear break of the 200-DMA, around 0.6800 at the latest, to initiate fresh short positions. Following that, a slump toward the previous monthly low surrounding 0.6685 can’t be ruled out. However, the last December’s bottom surrounding 0.6630 could challenge the AUD/USD bears afterward. On the flip side, a daily closing beyond the immediate hurdle, namely the support-turned-resistance line of 0.6835-40, can challenge the weekly high of 0.6920. Even so, the upside momentum remains unclear before the AUD/USD crosses a bit longer previous support line, close to 0.6970 at the latest. Also acting as an upside hurdle is the 0.7000 threshold and the mid-February swing high near 0.7030. Overall, AUD/USD rebound remains unimpressive as bears keep the reins. AUD/USD: Daily chart Trend: Bearish

Summary:  The Nasdaq 100, and S&P 500 fall for the second session with bond yields remaining at three-month highs as the FOMC meeting minutes show more tightening is on the horizon. CPI is ahead. Australian equities fall for third day on bond yields remaining at January highs. Reopening bellwethers in logistics, car dealership and air travel guide for stronger earnings ahead. Qube and APE shares lift, while Qantas needs to splurge on more aircraft to keep up with demand. Plus what to know about Rio's results and why to watch the AUDNZD. What’s happening in markets?   The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) fall for the second session with bond yields remaining at three-month highs    US equity markets remain pressured as the US 10-year yields trades in the neighborhood of three-month highs at ~3.92% with the FOMC meeting minutes showing more tightening is on the horizon. The Nasdaq 100 fell for the second day, closing at its lowest level since February 1. The S&P500 also fell the second session - moving under the key 4,000 level, at 3,991, bringing the 200-day moving average just ~1% away - at the 3,941 mark - which will quickly be tested.  Intel shares were a laggard down 2.2% after the computer processor giant cut its dividend 66% - declaring a quarterly payout of 12.5 cents a share. This followed on from Intel reporting one of its weakest quarterly earnings forecasts in its history. All in all, this highlights that companies are trying to preserve capital amid margin compression – and that’s been a major theme of earnings seasons and we think it will continue to play out in Q1 earnings reports.   Australian equities (ASXSP200.I) fall for third day -  but reopening stocks in logistics and car dealing seem supported on stronger earnings The Australian share market is being pressured by Australian bond yields rising, with the 10-year yield at its highest levels since January 4 - after the RBA affirmed it will continue to hike rates in the months ahead. The ASX200 fell briefly under its 50-day moving average with mining giants BHP and Rio trading lower after Rio reported weaker than expected numbers after the market close yesterday – but guided for a stronger 2023.    Travel stocks are continuing to gain attention on the revival of the travel sector – with a lack of fleet becoming an issue to keep up with strong demand. Qantas posted a record profit of A$1 billion in the six months to Dec 31, and announced A$500 million share buy back – as its sees relentless flight demand in 2023 - underscoring the surge in travel, post the pandemic. In fact, Qantas’ flagged higher than expected spending being needed to buy an extra aircraft, including nine Airbus A220s to keep up with surging passenger demand. Capital expenditure in the financial year ending June will rise by as much as A$400 million to between A$2.6-A$2.7 billion and will get as high as A$3.2 billion in the following 12 months. Despite guiding for strong demand, shareholders didn’t like hearing costs will need to rise – which send Qantas shares down 6% to $6.02, below its 100-day moving average. Qantas’ outlook underscores the pace and intensify of the travel industry’s recovery. Logistics giant, Qube is trading up 10% after its half year profit rose 41% to $125 million and it also noted it sees stronger growth ahead in 2023 – supported by China’s reopening. Car dealership giant, APE is up by about 7% after its results beat expectations, and it guides for a stronger year ahead with demand for new vehicles continuing to outstrip supply. Today’s earnings highlight the reopening trade is gaining pace and also growing beyond market expectations – this could be a driver of the Australian equity market in the half year, while commodity companies continue to guide for a stronger year ahead – backing our bullish commodity outlook. FX: A stronger US dollar – pressures the Australian dollar lower  With ‘a few’ FOMC members supporting a larger hike to curb inflation - with James Bullard still favouring hiking rates to 5.375% as fast of possible, the US dollar gained the upper hand, pressuring most G10 currencies lower including the Aussie dollar. The AUD/USD pair closed below trend support, which opens up for a move lower to 0.6629, being the December low.The AUD/NZD pair however made a cleaner break down lower - with the Aussie against the Kiwi falling below its 50-day moving average. Weight on the pair also came after Australian wage growth data and construction work done were softer than expected, meaning the path of RBA hikes could slow after the RBA makes its tabled hikes in the ‘months’ ahead, versus the RNBZ, that just hiked by 50bps yesterday but gave a hawkish guidance.   What to consider with Rio Tinto's results?  Rio Tinto’s profits and dividend slide in 2022, but Rio guides for a stronger 2023 - underpinned by ‘climate change scenarios’  Shares of Rio Tinto in NY fell 3.3% overnight and are down 3% on the ASX today after the world’s second largest miner reported underlying profit fell 38% to $13.28 billion in 2022 - vs the expected $13.96 billion consensus forecast. Rio’s profit fell after realised commodity prices fell from their records in the second half of 2022 – while earnings were also impacted by higher energy, raw materials prices and wages. Rio’s free cash flows fell 49% Y/Y in 2022 to $9.01 billion, resulting in Rio cutting its final (HY) dividend to $2.25 a share (down from $4.17), taking its total 2022 dividend to $4.92 - that’s a 60% pay-out ratio.Similar to BHP, Rio’s output looks stronger in 2023 with Rio guiding for higher copper, alumina, aluminium and iron ore production (but lower diamond production). It sees commodity prices being underpinned by ‘climate change scenarios’ which drive demand. Also note - in recent weeks - signs of a recovery in China have fuelled iron ore and copper prices up -with iron ore prices up 15% year to date. Rio is expanding its copper-gold presence, with the purchase of Turquoise Hill Resources- that will see Rio double its stake in the Oyu Tolgoi copper-gold project in Mongolia. Rio is also progressing the Rincon Lithium Project in Argentina – cementing itself in lithium. And despite the Serbian Government quashing its lithium mine Rio is ‘continuing to explore possibilities   To listen to our global team's take on markets - tune into our Podcast.   Source: Financial Insights: S&P500 and ASX200 pressured. But Travel, Logistics & Car dealerships see stronger earnings ahead | Saxo Group (home.saxo)

The dollar held shy of multi-week peaks against other major currencies on Thursday, a day after minutes from the Federal Reserve's last policy meeting supported, but did not add to markets' view the central bank will raise rates further. Minutes from the Federal Reserve meeting released last night confirmed the hawkish rhetoric of Fed officials over the past two weeks. The key takeaway, of course, is that the Fed is committed to keeping interest rates higher for longer to bring inflation down to the 2% target. The impact of the protocol was somewhat dampened as the meeting was preceded by a series of metrics released in February, most notably employment figures, which showed the US economy was doing well, leaving more room for the Fed to raise interest rates to bring down inflation. Markets will be focused on US GDP as well as the accompanying labor market data in the form of jobless claims. US GDP is expected to come in marginally weaker than the previous. USD/JPY USD/JPY struggles to gain any significant traction on Thursday and trades in a tight band just below the psychological 135.00 mark for the first half of the European session. The yen pair started the day above 134.90, in the Asian session USD/JPY fell towards 134.70. In the European session, USD/JPY increased and is now just below 135.00. In addition, the USD/JPY pair is also weighed down by hawkish concerns around the Bank of Japan (BoJ), due to the imminent end of the term of governor Haruhiko Kuroda. Alternatively, Fed policymakers are poised for further interest rate hikes, according to the latest Federal Open Market Committee (FOMC) meeting minutes, which in turn is fueling demand for the US dollar. EUR/USD EUR/USD in the Asian session was above 1.06, and the pair traded close to the 1.0630 level. In the Asian session, EUR/USD fell below 1.06. This morning brought data on inflation in the euro zone for January, in which annual inflation fell to 8.6% in the euro zone and to 10.0% in the EU. In January, food, alcohol and tobacco accounted for the largest contributors to the euro area's annual inflation rate, followed by energy, services and non-energy industrial goods, according to data released by Eurostat. In addition, EU members will hold further talks on a new package of sanctions against Russia after failing to reach an agreement on Wednesday. According to Reuters, the proposed package includes trade restrictions worth more than €10 billion. Russia is reportedly planning to cut oil production in response to Western sanctions. The heightened risk of rising energy prices, which will contribute to stronger inflation in the eurozone, could help the euro hold its position in the short term, as such a situation would force the European Central Bank (ECB) to raise interest rates further after March. Read next: Tesla Opens Its Global Engineering Headquarters In Palo Alto, California| FXMAG.COM GBP/USD The cable pair in the Asian session was rising towards 1.2070, but in the European session it lost momentum and fell to the level of 1.2020. Currently, GBP/USD is at 1.2022. GBP/USD extended its decline towards 1.2000 early Thursday after reversing much of the PMI-driven gains on Wednesday. Markets will be keeping a close eye on US stocks and Brexit developments for the remainder of the day. AUD/USD The AUD/USD pair was rising towards 0.6840 in the first hours of trading. Then the pair of the Australian fell and rebounded again. In the European session the Aussie Pair traded below 0.6820, currently the AUD/USD pair is trading above 0.6820. Australian capital expenditure data beat estimates across the board (reaching its highest level since Q4 2021) showing optimism in these sectors. Source: investing.com, finance.yahoo.com

The Australian dollar traded with a range of 30 pips yesterday, closing the day near the opening level. The currency pair is rising in today's Asian session, the Marlin oscillator is also turning up. The correction to the nearest resistance at 0.6873 (low of January 19) was probably outlined. Once the correction ends, I expect the pair to move to 0.6730. On the four-hour chart, the price converges with the oscillator, the signal line of which is about to move into positive territory. The first resistance is the MACD line near 0.6848. Going beyond this level will allow the price to continue rising up to 0.6873. If the price overcomes yesterday's low at 0.6784, it will continue to decline to the support at 0.6730.   Relevance up to 04:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335990

The dollar index rose to seven-week highs on Friday as investors braced for an extended hold on higher US interest rates after a series of strong economic data in the US. Investors await data on the US Personal Consumer Expenditure (PCE) Price Index. The annual core PCE price index, the Fed's preferred measure of inflation, is projected to fall to 4.3% in January from 4.4% in December. The core consumer price index (CPI) fell to 5.6% y/y in January from 5.7% in December. A modest fall in core PCE inflation should not come as a big surprise at this point. The PCE Core Price Index is expected to increase by 0.4% m/m. In the event that the monthly value exceeds the market consensus, the US dollar may gain strength. It is worth noting, however, that markets are already fully pricing in two more Fed rate hikes of 25 basis points in March and May. USD/JPY USD/JPY started the day with a decline towards 134.20. Then the yen pair moved upwards. USD/JPY hit 135.00 and is now trading at 135.3850 The Japanese yen may fall further after the new governor of the Bank of Japan, Kazuo Ueda, signaled that very loose monetary policy should be maintained. Ueda's comments after his approval in the lower house of Japan's parliament did not produce any clear hawkish signal that could fuel a resurgence of speculative demand for the yen in the near term. EUR/USD EUR/USD traded above 1.06 in the Asian session, mostly in the 1.0605-1.0610 range. In the European session, the EUR/USD pair lost momentum and returned to levels below 1.06. Currently, the pair is trading just below 1.06 at 1.0580. The euro started the European session weaker after worse than expected data on German GDP. GDP data showed that the German economy contracted (-0.4%) in the fourth quarter of 2022 and brought recession talk back. Moreover, a weaker-than-expected rise in monthly core PCE inflation could trigger a USD correction and help the EUR/USD rebound ahead of the weekend. Read next: Visa Success At The Expense Of Small Businesses| FXMAG.COM GBP/USD The cable pair in the Asian session and in the beginning of the European session traded around 1.2020. The GBP/USD pair lost momentum and fell below 1.20, at 1.1987. British consumers have become more optimistic about their personal finances and economic outlook, but their sentiment is much lower than it was before the COVID-19 pandemic, research firm GfK said on Friday. Improved consumer sentiment does not always translate to improved spending, as evidenced by the flat retail sales reading for February from the Confederation of British Industry on Thursday. However, energy prices are finally backing down from last year's highs and the UK economy is not looking as bad as expected just a few weeks ago, according to this week's Purchasing Management Index (PMI) business activity survey that showed an unexpected rebound in early February. AUD/USD The pair of the Australian in the Asian session stayed above 0.6819, but with the start of the European session it began to fall below 0.68. Currently the Aussie Pair is trading below 0.6870 The Australian yen gained in value after the alleged head of Japan's central bank maintained the status quo on monetary policy and was apparently in no rush to end its massive stimulus programme.. Source: investing.com, finance.yahoo.com

The dollar climbed to seven-week peaks on Friday, after data showed U.S. inflation accelerated while consumer spending rebounded last month, reinforcing expectations that the Federal Reserve may need to hike interest rates a few more times this year to curb the surge in prices. On Friday, the core PCE index in the US amounted to 4.7% y/y at the end of January against expected 4.3% and 4.6% earlier. USD/JPY USD/JPY started the week at 134.1140. The weekly trend of the yen pair was up as the dollar was supported by strong data from the US economy and no support came from Japan. By Wednesday, USD/JPY was trading around 134.75. The first break above 135.00 was on Thursday but the momentum did not hold, USD/JPY rose again on Friday and passed 136.00 and recorded the highest trading level of the week at 136.4960. USD/JPY closed the week at 136.4060 The Japanese yen weakened past 135 per USD, dropping to its lowest level in over two months after incoming BoJ Governor Ueda stated the central bank must maintain its ultra-low policy stance for the time being. The official also discarded immediate changes to the bank’s yield curve control, supporting bond prices worldwide. The dovish policy is set to stay despite the steady increase in Japanese consumer prices. Headline inflation jumped to 4.3 percent in February EUR/USD It was a difficult week for the EUR/USD pair. The euro pair managed to fall below 1.05 this week. The euro pair started the week at 1.0683 and then fell. Weekly high above 1.07 (1.0705). The trend was down and the lowest level was reached by the EUR/USD pair at 1.0540. The week will close at 1.0547. S&P Global's Composite Purchasing Managers Index for the currency bloc hit a seven-month high of 50.3 in January. That was above both December's 49.3 and the flash reading of 50.2. For the first time in seven months, the number was above the key figure of 50 that separates expansion from recession. The data came after better official Eurostat data from the beginning of the week. They showed that the eurozone economy grew by 0.1% in the last quarter of 2022, beating expectations for a decline of 0.1%. GBP/USD For the cable pair, the week was mixed. GBP/USD started trading for the week at 1.2043, closing the week was much lower at 1.1942. The best day for the cable pair was Tuesday as the pair received support from the UK economy (positive PMI readings) and GBP/USD traded above 1.21, which was the week's high (1.2141). Trading lows occurred at the end of the week, with the all-time low at 1.1935. The British pound fell below $1.20, hovering around its lowest level since January 5, as data pointing to a still-tight US labor market and sticky US inflation fueled expectations that the Federal Reserve would keep interest rates higher for longer. At the same time, the Bank of England will raise the interest rate by another 25 basis points to 4.25% next month to combat double-digit inflation before the end of the current tightening cycle. AUD/USD The Aussie pair started trading at the 0.6869 level and on the first day rose above the 0.69 level. Above 0.69, the AUD/USD pair reached a weekly high of 0.6922. The Australian couple did not enjoy an increase for long and in the following days it decreased. Similar to European counterparts, AUD/USD reached its lowest level on Friday. The weekly low was at 0.6721. The Aussie Pair ended the week trading at 0.6727. Source: finance.yahoo.com

AUD/USD has refreshed its seven-week low at 0.6700 amid geopolitical tensions and rising hawkish Fed bets. The USD Index has refreshed its day’s high above 104.90 and is expected to recapture the 105.00 resistance. A higher-than-projected Australia GDP will accelerate troubles for the RBA. The AUD/USD pair has refreshed its seven-week low near the round-level support of 0.6700. More downside in the Aussie asset looks favored as investors are channelizing their funds into the US Dollar Index (DXY). Investors are favoring investment in the USD Index to dodge volatility inspired by a revival in consumer spending in the United States and escalating geopolitical tensions. The USD Index has refreshed its day’s high above 104.90 and is expected to recapture the 105.00 resistance. Western nations are still concerned about the rumors of China’s support to Russia in providing arms and ammunition against Ukraine. United States National Security Advisor Jake Sullivan said on CNN’s “State of the Union,” China’s stance on the Russian invasion of Ukraine puts it in an “awkward” position internationally and any weapons support to Russia would come with “real costs.” Risk-perceived assets like S&P500 futures are facing heat of the geopolitical tensions. The 500-stocks futures basket has surrendered the majority of gains earned in morning, portraying further strengthening of the risk-aversion theme. Meanwhile, the return generated on 10-year US Treasury yields is hovering around 3.94%. Higher-than-projected US consumer spending in January has highlighted the fact that the battle between the Federal Reserve (Fed) and the sticky inflation is getting brawled further. Fed chair Jerome Powell has been left with no other option than to tap hawkish measures to bring down the stubborn inflation. Read next: The Effect Of Shifting The Aggregate Demand Curve - Demand Shocks| FXMAG.COM On the Australia front, recession fears are escalating as inflation is not showing signs of deceleration, which is bolstering the case of further policy tightening by the Reserve Bank of Australia (RBA). This week, Australia’s Gross Domestic Product (GDP) (Q4) numbers will be keenly watched. The quarter GDP is seen higher at 0.9% vs. the former release of 0.6%. This might create more troubles for RBA Governor Philip Lowe as higher activities will favor further hikes.  

The dollar fell from a seven-week high on Monday as investors took stock of last week's strong US economic data and outlook for global interest rates. Friday's data showed that US consumer spending rose sharply in January, while inflation accelerated. Traders now expect the Fed to raise interest rates to around 5.4% by the summer. USD/JPY The first day of the new week for the USD/JPY pair was mixed in both the Asian and European sessions. The pair started the week at 136.4430, but fell to 136.00 during the day. At the time of writing, the yen was trading at 136.2970. In late February, the Japanese yen weakened above 136 to the dollar, hitting its lowest level in more than two months as Ueda, nominated governor of the Bank of Japan, doubled down on the bank's very restrictive monetary policy. The new governor of the Bank of Japan, Kazuo Ueda, said on Monday that the benefits of the bank's current monetary policy outweigh the costs, stressing the need to maintain support for the Japanese economy with very low interest rates. The comments reinforced signals that the bank will not turn away from its dovish attitude anytime soon. Previously, Ueda had opposed monetary tightening in response to cost-driven inflation and rejected immediate changes to the bank's yield curve control, warning that such measures would deeply hurt growth. EUR/USD EUR/USD started the week at 1.0556. In the Asian session, it mostly traded near 1.0550 and even 1.0560, then fell below 1.0540. In the European session, the euro was rising towards 1.0570. Currently, the EUR/USD pair is trading around 1.0560. The US currency has benefited widely from the view that its central bank has more power and leeway to counter inflation. Meanwhile, the Eurozone has to meet the varying needs of its twenty national economies, some of which will struggle to cope with even minor further interest rate increases. Interest rate differentials are likely to dominate euro fundamentals this week, although some key domestic data is emerging, most notably official eurozone inflation data. Due for release on Thursday and the annual base rate is expected to remain unchanged at 5.3% Read next: BNP Paribas Sued For Providing Financial Services To Companies That Allegedly Contribute To Deforestation Of The Amazon Rainforest| FXMAG.COM GBP/USD The movement of the cable pair resembles the movement of EUR/USD. GBP/USD started the week at 1.1950, but during the day GBP/USD fell towards 1.1930. In the European session, it gained an upward momentum and exceeded the level of 1.1980. Politically, European Commission President Ursula von der Leyen is due to travel to the UK today to meet Prime Minister Rishi Sunak on a new Brexit deal. This could see a resumption of trade between Northern Ireland and the UK, but it has not really translated into the GBP yet. AUD/USD The AUD/USD pair is the worst performer among the major currency pairs. The Aussie Pair started the day above 0.6730 but fell towards 0.6700 in the next session. In the European session, AUD/USD has slightly increased and at the time of writing it is just above 0.6710. The Australian dollar weakened to around $0.67, trading at its lowest level in nearly 2 months as better-than-expected US economic data boosted expectations that the Federal Reserve would need to raise interest rates further to stem rising inflation. Weak domestic employment data also affected the currency with Australia's unemployment rate unexpectedly rising to 3.7% in Q4 despite expectations to hold steady at 3.5%. Meanwhile, the Reserve Bank of Australia's latest monetary policy statement showed it had revised its inflation forecast for this year higher, saying price pressures were spreading to services and wages. Source: investing.com, finance.yahoo.com

Yesterday, the Australian dollar started the day with a strong decline, but it failed to consolidate under 0.6730. In fact, now we see support being pierced, and in case it climbs to 0.6873, a false breakout. In the current technical conditions, there is no sign that the price could break through the resistance at 0.6873, so we will consider the beginning of the correction on the lower chart. On the four-hour chart, the price is above 0.6730, the Marlin oscillator is attacking the zero neutral line. There are all the conditions for the MACD line resistance at 0.6795. Keeping the price above this line will allow it to continue rising up to 0.6873. Consolidation below 0.6730 along with overcoming yesterday's low (0.6698) will open the target level of 0.6640 again.   Relevance up to 03:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336241

After testing the area level of its Bearish Fair Value Gap-nya which is strong enough to hold the rate of rise of this commodity currency pair made the AUD/USD fall again, especially when it was confirmed by the appearance of the Bearish Flag pattern and deviations between price movements and the Stochastic Oscillator indicator and price movements that are below the EMA 10, it is certain that sellers are in the currency pair AUD/USD commodity money is currently dominating so that in the near future AUD/USD will try to test and break below the 0.6630 level. If this level is successfully broken down, then the 0.6586 level will be the main target, and the Bullish Fair Value Gap area level will be the second target level. with a note that if on the way down there is no significant correction again, especially if the level 0.6923 is successfully penetrated upwards because if this level is successfully penetrated then all scenarios of decline with the targets outlined earlier will become invalid and cancel automatically. (Disclaimer)   Relevance up to 05:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120315

AUD/USD struggles to capitalize on its modest uptick amid renewed USD buying. Hawkish Fed expectations, elevated US bond yields help revive the USD demand. Recession fears offset the upbeat Australian Retail Sales and act as a headwind. The AUD/USD pair attracts some sellers following an uptick to mid-0.6700s and stalls a modest recovery from its lowest level since January touched the previous day. The pair retreats to the lower end of its daily range, around the 0.6730-0.6725 region during the early European session and is pressured by reviving US Dollar demand. The prospects for further policy tightening by the Fed remain supportive of elevated US Treasury bond yields and continue to act as a tailwind for the USD. In fact, the markets seem convinced that the US central bank will stick to its hawkish stance for longer in the wake of stubbornly high inflation. The bets were reaffirmed by the stronger US PCE Price Index released last Friday, which indicated that inflation isn't coming down quite as fast as hoped. Market participants, meanwhile, remain worried about economic headwinds stemming from rapidly rising borrowing costs. Apart from this, geopolitical tensions keep a lid on the overnight optimistic move in the equity markets, which further benefits the safe-have Greenback and contributes to capping the upside for the risk-sensitive Aussie. This overshadows better-than-expected Australian Retail Sales and does little to lend any support to the AUD/USD pair. In fact, the Australian Bureau of Statistics reported that Retail Sales grew by 1.9% in January against consensus estimates for a 1.5% rise and the 3.9% downfall recorded in the previous month. The AUD/USD pair's inability to gain any meaningful traction in reaction to the upbeat domestic data suggests that the downtrend witnessed since the beginning of this month is still far from being over. Bears, however, might wait for a sustained break below the 0.6700 mark. Traders now look to the US economic docket - featuring the release of regional manufacturing PMI and the Conference Board's Consumer Confidence Index. This, along with the US bond yields and the broader risk sentiment, might influence the USD price dynamics and provide some impetus to the AUD/USD pair later during the early North American session. Nevertheless, the fundamental backdrop suggests that the path of least resistance for spot prices is to the downside.

The U.S. dollar resumed its rally on Tuesday after dipping against sterling and the euro a day earlier, putting it back on track for its first monthly gain since September. The greenback's rally gathered momentum in recent weeks as upbeat economic data led to mounting expectations that the U.S. Federal Reserve will have to raise interest rates more than initially expected. The US economic report will include the Conference Board's Consumer Confidence Survey for February. In January, the annual expected consumer inflation component of this survey rose to 6.8% from 6.6% in December. The latest inflation data for January showed that price pressure remained higher than expected. If consumers' inflation expectations continue to rise, the US dollar could gain strength in the second half of the day. USD/JPY In the Asian session, the yen traded in the range of 136.20-136.30, but in the Asian session there was a sharp increase and at the time of writing USD/JPY is trading at 136.6930. Recent comments from new BOJ vice-president Shinichi Uchida and current BOJ governor candidate Kazuo Ueda had a dovish tone during testimony before the upper house of the Japanese parliament. Ueda confirmed his intention to stick to "abenomics" and defend the central bank's monetary policy stance. Japanese data released overnight were mixed as industrial production was weaker than expected and retail sales rose. Industrial production recorded the first decline in 3 months, when production fell in January by 4.9%MoM. Retail sales rose by a solid 1.9% m/m, with clothing and motor vehicles having the largest share. Manufacturing in Japan remains an area of ​​concern; however, consumption looks good and is indeed on track to recover. EUR/USD The euro pair fell in the morning session from levels above 1.06 to levels around 1.0585. In the European session, the EUR/USD pair rose significantly above 1.0620. At the time of writing, the EUR/USD pair is trading around 1.0615. However, deteriorating market sentiment seems to be limiting the pair's gains for now as the focus shifts to the Conference Board's US consumer confidence survey. The consumer price index (CPI) in France rose to 7.2% y/y in flash estimates in February from 7% in January. Similarly, the annual CPI in Spain rose to 6.1% from 5.9% in the same period. After stronger-than-expected inflation figures from major eurozone economies, markets are almost fully pricing in the European Central Bank's (ECB) final interest rate at 4%, down from 3.75% last week, with hawkish ECB betting helping the euro hold its ground. GBP/USD The cable pair in the Asian session maintained a downward trend and in its decline headed to the level of 1.2028. The European session provided a positive impulse for GBP/USD and the pair rose above 1.2090. The pound pair managed to break above the 1.21 level but failed to hold and is currently trading below that level at 1.2098. Meanwhile, British Prime Minister Rishi Sunak announced late Monday that he had reached an agreement with the European Union to replace the Northern Ireland Protocol with the Windsor Framework. While it's too early to tell whether these developments could have a lasting impact on sterling's valuation and the Bank of England's (BOE) policy outlook, the initial market reaction helped the pair to gain momentum. UK Prime Minister Sunak also noted that MPs would vote on the new deal and that they would respect the results of the vote. Later in the session, several BOE decision makers will give speeches. AUD/USD In the Asian session, the Australian pair recorded a significant drop from the 0.6750 levels to the 0.6710 levels. In the European session, the AUD/USD pair is rising again and trading around 0.6730. Source: investing.com, finance.yahoo.com, dailyfx.com

The Australian dollar remains under pressure and has edged lower on Tuesday. AUD/USD dropped below the 0.67 line on Monday for the first time since Jan. 3. Australian retail sales bounce back Australian retail sales jumped 1.9% m/m in January, following an upwardly revised 4% decline in December and beating the consensus of 1.5%. The data indicates that consumer demand remains resilient despite rising interest rates and higher inflation. For the RBA, the upswing in consumer spending is a sign that the economy can continue to bear higher rates. The central bank has hiked some 325 basis points since May 2022 in a bid to curb inflation. The cash rate is currently at 3.35% and the markets have priced in a peak rate of 4.3%, with four rate hikes expected before the end of the year – one more than what is expected for the Fed. The RBA meets on March 7 and is widely expected to raise rates by 25 basis points. Wednesday could be a busy day for the Australian dollar, as Australia releases inflation and GDP reports. Inflation for January is expected to ease to 7.9% y/y, following an 8.4% gain in December. GDP for the fourth quarter is projected to slow to 2.7% y/y, after a robust gain of 5.9% in Q3. A decline in inflation and in GDP would indicate that high interest rates are having their intended effect and slowing economic activity. The question is whether the RBA will be able to guide the slowing economy to a soft landing and avoid a recession. In the US, a recent string of strong numbers has raised speculation that the Fed could raise interest rates as high as 6%. The unseasonably warm weather in January may have played a part in the better-than-expected numbers and we’ll have to see if the positive data repeats itself in February. The markets have shifted their stance from a final rate hike in March with rate cuts late in the year to pricing in three more rate hikes in 2023. If upcoming inflation, employment and consumer spending reports point to a weaker economy, we can expect the markets to revert to pricing in a dovish pivot by the Federal Reserve.   AUD/USD Technical AUD/USD has support at 0.6656 and 0.6586 There is resistance at 0.6788 and 0.6858 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

A double whammy of slowing growth and moderating inflation, but it won't be enough to get the central bank to pause next week Governor of the Reserve Bank of Australia, Philip Lowe 0.5% 4Q22 GDP growth QoQ sa Lower than expected 4Q22 GDP growth slows, and looks like it will slow further Despite some stronger private investment data earlier in the week, which led to the consensus of forecasters revising up their expectations for today's GDP release, the published growth figure actually came in quite a bit weaker than the 0.8% quarter-on-quarter expectation, growing only 0.5% from the previous three months.  Following some slightly softer monthly labour reports, is this finally conclusive evidence that the economy is slowing? It certainly looks that way.  Contribution to QoQ GDP Growth Source: CEIC, ING Consumer spending falling, inventories rising To work out what exactly is going on, we've calculated the contributions to quarter-on-quarter seasonally adjusted GDP growth broken down into some of its main constituents, to see what is weakening, and what is holding up better, and compared this over the last three quarters.  When you do this, you see that the total GDP growth rate has declined at a very steady pace over the last few quarters. Much of that decline can be laid at the feet of private consumption, the growth rate of which has dropped steadily over this period. Helping to pull the total down this quarter, net exports were also a drag.  Somewhat worryingly, the fourth quarter GDP growth total would have been closer to zero had it not been for some inventory building, some of which will probably prove to have been involuntary, and will reverse in the coming quarters.  So in short, it does look as if there is more to this than just some statistical noise, and we could be looking at a sub 0.5% QoQ figure for the first quarter. Inflation falls are broadly spread Source: CEIC, ING Inflation also fell sharply January inflation also dropped sharply following its surge higher in December, dropping to 7.4%, a full percentage point below the December figure.  We have performed a similar breakdown of the inflation numbers to see what is driving this result, and what we find is very different to the GDP numbers.  Whereas the GDP figures appear to have some obvious drivers for the latest weakness, this is much less apparent in inflation, where the contributions to inflation have remained very steady, but slightly weaker across a wide range of components. Even the reversal of the big surge in holiday prices, which helped lift the inflation rate in December, had a relatively modest impact on the inflation rate in January. The recreation sub-component which encompasses holiday travel dropped back 0.3pp in terms of its overall contribution to the inflation total. Accounting for the rest of the drop in today's inflation rate, were small declines across a wide range of items.  That actually sounds like a more solid slowdown in inflation than if it were just the result of, say, food price swings or gasoline costs for example. And indeed, the inflation rate excluding volatile items fell to 7.2% from 8.1%, suggesting that this was a fairly broad-based, though at this stage, modest, decline in core inflation.  Should the RBA take notice? Combined with the GDP numbers, these latest inflation figures may prompt thoughts of a different tack by the Reserve Bank of Australia, coming just a week before its next rate-setting meeting. However, we think this would be a bit premature. And financial markets seem to agree.  For one thing, the inflation rate, though sharply down, remains well above 7%, a rate that hardly indicates a pause is likely anytime soon. Moreover, today's drop in inflation, though broad-based, only reverses last month's spike, so we really aren't any better off yet, even if the signs for further declines are a little more promising. And finally, the RBA at its last rate-setting meeting provided very strong forward guidance that suggested inflation would not return to its 2-3% target range until 2025. This is a forecast we completely disagree with, but that is irrelevant to the fact that the RBA will want to maintain its hawkish credentials right up until the point that either the market calls its bluff or policymakers drop the pretence and admit things are going better than they had predicted.  Markets have scaled back their expectations for RBA tightening following today's figures, and the implied peak rate from cash rate futures in October has dropped back to  4.182% from 4.275% the day before. But markets are still pricing in a much greater than 50% chance of a rate hike next week, and after some initial weakness, the Australian dollar has shrugged off the data and has appreciated for most of the day.  Read this article on THINK TagsReserve Bank of Australia RBA rate policy Australian inflation Australian economy AUD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

AUD/USD is struggling to extend recovery above 0.6760, upside looks favored amid the risk-on impulse. Federal Reserve might turn more hawkish if US ISM Manufacturing PMI delivers a surprise jump. A sense of relief has been observed by the Reserve Bank of Australia as inflation has softened significantly. AUD/USD looks failing to turn bullish despite a responsive buying move amid an Inverted Flag formation. AUD/USD has stretched its V-shape recovery move above to near the 0.6760 resistance in the early European session. The Aussie asset witnessed a sell-off in the Asian session after the release of the downbeat Australian Gross Domestic Product (GDP) and a sheer decline in the monthly Consumer Price Index (CPI). The downside bias in the Australian Dollar faded after the release of the upbeat Caixin Manufacturing PMI data, which infused fresh blood into the Aussie and resulted in a V-shape recovery. S&P500 futures have turned positive after recovering significant losses posted in the Tokyo session, portraying a sheer recovery in the risk appetite theme. The US Dollar Index (DXY) has refreshed its day low below 104.47 as investors have ignored the uncertainty associated with hawkish Federal Reserve (Fed) bets. Also, the safe-haven assets are struggling to find a cushion as investors have underpinned the risk-on mood. Contrary to the positive market sentiment, the return offered on the 10-year US Treasury bonds looks still solid around 3.94%. RBA senses relief as Australian Inflation softens and GDP trims Investors dumped the Australian Dollar in the Asian session after the Australian Bureau of Statistics reported significantly lower monthly Consumer Price Index (CPI) figures than anticipation. The monthly Consumer Price Index (CPI) (Jan) dropped significantly to 7.4% from the expectations of 8.0% and the prior release of 8.4%. A mammoth decline in the inflation data is going to provide a big relief to Reserve Bank of Australia (RBA) policymakers. The Reserve Bank of Australia has been making efforts in bringing down inflationary pressures by the continuation of policy tightening. Reserve Bank of Australia Governor Philip Lowe has already pushed its Official Cash Rate (OCR) to 3.35% in order to tame the stubborn inflation. And, more rates must be in pipeline to achieve price stability sooner. Apart from the monthly CPI, Australian Gross Domestic Product (GDP) (Q4) has dropped to 0.5% from the consensus of 0.8% and Q3 figure of 0.6%. On an annualized basis, the GDP has remained in line with expectations at 2.7%. A decline in GDP numbers also showcases lower demand from households, which will trim inflation projections ahead as producers will be forced to scale down the prices of their offerings. Upbeat Caixin Manufacturing PMI strengthens the Australian Dollar It was widely anticipated that China’s manufacturing sector will outperform after the rollback of strict lockdown measures. Chinese administration and the People’s Bank of China (PBoC) are dedicated to spurring economic recovery by improving domestic demand. The IHS Markit reported the Caixin Manufacturing PMI data at 51.6, higher than the expectations of 50.2 and the former release of 49.2. Apart from that, China’s National Bureau of Statistics (NBS) Manufacturing PMI (Feb) landed higher at 52.6 vs. the consensus of 50.5 and the prior release of 50.1. The Services Manufacturing PMI exploded to 56.3 against 54.4 released in January while the street was anticipating a downbeat figure at 49.7. It is worth noting that Australia is the leading trading partner of China and a sharp recovery in the Chinese economy is also supportive of the Australian Dollar. ISM Manufacturing PMI- the next trigger for the US Dollar The street is awaiting the release of the United States Institute of Supply Management (ISM) Manufacturing PMI data. As per the consensus, the economic data is seen at 48.0 from the former release of 47.4. Apart from that, the New Orders Index that conveys forward demand is expected to rebound to 43.7 from the prior figure of 42.5. It is worth noting that the Manufacturing PMI is in a contraction phase consecutively for the past three months. A figure below 50.0 is considered as a contraction in the extent of activities. Federal Reserve policymakers are expected to keenly watch the PMI figures as a surprise upside could strengthen the expectations of more hikes ahead. AUD/USD technical outlook Despite a responsive buying action near the round-level support of 0.6700, the outlook for AUD/USD looks gloomy as the asset is forming an Inverted Flag chart pattern. The chart pattern indicates a sheer consolidation that is followed by a breakdown. Usually, the consolidation phase of the chart pattern serves as an inventory adjustment in which those participants initiate shorts, which prefer to enter an auction after the establishment of a bearish bias. The 100-period Exponential Moving Average (EMA) around 0.6760 is acting as a barricade for the Aussie bulls. Also, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, indicating a consolidation ahead

The dollar weakened and the Chinese yuan gained on Wednesday after Chinese manufacturing activity rose at the fastest pace since April 2012, while the euro gained after regional price data in Germany boosted inflation concerns. The Australian and New Zealand dollars also benefited from strong Chinese economic data that beat expectations, with the official Industrial Purchasing Managers' Index (PMI) rising to 52.6 last month from 50.1 in January. Upbeat China PMI data showed that Chinese economic activity continued to gain momentum following the decision to reopen the economy in December. The situation sparked a rally in major Asian stock indices, with the Euro Stoxx 50 index opening in the red. USD/JPY The yen traded above 136.25 in the Asian session, but fell sharply below 136.00 in the European session. The USD/JPY pair has dropped significantly to 135.30 in the last hours. USD/JPY at the time of writing is just above 135.30 (135.3040). The Japanese yen (JPY) strengthened slightly after data released today showed the Manufacturing PMI (Feb) was better than expected. EUR/USD On Wednesday, the trade of the euro pair is significantly positive, the EUR/USD pair has been rising since the beginning of the day. At the time of writing, the EUR/USD pair is trading around 1.0670. Data released on Tuesday showed accelerating inflation in France and Spain, the eurozone's two largest economies, raising the European Central Bank's (ECB) expectations for interest rate hikes. The pair is taking advantage of the ECB's hawkish expectations and the significant weakness of the US dollar. All eyes are on German inflation and US ISM PMI data. Markets expect the Harmonized Index of Consumer Prices (HICP), the European Central Bank's preferred measure of inflation, in Germany to fall to 9% yoy in February from 9.2% in January. If the annual HICP unexpectedly approaches or even exceeds January's value, the euro's initial reaction is likely to outpace its rivals. Markets are almost fully pricing in the ECB's final interest rate at 4% in 2023, and a strong inflation print from Germany should allow the ECB's hawkish bets to dominate the euro's valuation. Read next: Developer Vanke Is Selling 300 Million Shares To Allocate For The Proceeds To Debt Repayment| FXMAG.COM GBP/USD The GBP/USD pair is not doing as well as EUR/USD, despite rising to levels above 1.2080 in the Asian session. In the European session, the cable pair fell towards 1.2020, but rebounded and rose above 1.2050. Sterling rose marginally against a weaker dollar on Wednesday, trimming gains made earlier in the session after Bank of England Governor Andrew Bailey said nothing had been decided in terms of whether interest rates would need to rise again. Meanwhile, British Prime Minister Rishi Sunak reportedly told his MPs to give the Democratic Unionist Party (DUP) time and space to study the details of the new deal. The recent UK-EU deal or "Windsor Framework" has given the pound some momentum but it has struggled to maintain said gains. The reasons for this may be partly because the economic impact of the deal is unlikely to be significant for the UK economy as it does not improve trading conditions between the rest of the UK and the EU. A recent poll by the Bank of England found Brexit no longer a key uncertainty for UK businesses. AUD/USD AUD/USD gains on Wednesday. The Aussie Pair fell significantly at the beginning of the day, but then rebounded and maintained its upward trend. The Australian pair is trading above 0.6775 at the time of writing. The Australian dollar fell below 67 cents after Q4 quarter-on-quarter GDP was 0.5% instead of the 0.8% forecast and compared to the previous 0.7%, which was revised up from 0.6%. The currency trimmed losses later in the day thanks to solid data from China. Annual GDP by the end of December was 2.7%, in line with expectations. Today's GDP figures come ahead of the Reserve Bank of Australia's monetary policy meeting next Tuesday. They are expected to raise their target cash rate by 25 basis points (bps) to 3.60%. If it does, it will be the tenth increase since it started in May last year. The latest inflation reading is well above the RBA target range of 2-3% at 7.8% year-on-year. Source: finance.yahoo.com, investing.com

The Australian dollar is showing strong gains for the first time in a week. AUD/USD is trading at 0.6764 in Europe, up 0.53%. Australia’s inflation eases Australia’s inflation fell to 7.4% in January, down from 8.4% in December and below the estimate of 8.0%. Australian Treasurer Jim Chalmers said that he was “cautiously hopeful” that inflation has peaked, but inflation still remained the economy’s biggest challenge. The GDP report was not as positive, with a gain of 0.5% q/q in Q4, below the Q3 gain of 0.7% and the forecast of 0.8%. On an annualized basis, GDP slowed to 2.7% in Q4, down sharply from 5.9% in the third quarter. The RBA’s rate-hike cycle has slowed economic activity and is responsible for the drop in inflation as well as the soft GDP. The central bank will have to consider how aggressive it should be with regard to future rate increases. Inflation needs to come down much further, but further rate hikes raise the risk of the economy tipping into a recession. The RBA is expected to raise rates by 25 basis points next week but may pause at the April meeting if the data, particularly inflation, allows the Bank to take to a breather. The Aussie received a boost today from strong Chinese PMIs. Manufacturing and Non-manufacturing PMIs improved in February and beat expectations, with readings of 52.6 and 56.3, respectively. A reading above 50.0 indicates expansion. China is Australia’s largest trading partner and a stronger Chinese economy means greater demand for Australian exports, which is bullish for the Australian dollar. China’s transition from zero-Covid to reopening the economy has gone well so far and a rebound in China is important not just for China and the region but for the global economy as well. Read next: Euro Is Rising, USD/JPY Falls Below 136.00, The Aussie Pair Also Gains| FXMAG.COM AUD/USD Technical AUD/USD has support at 0.6656 and 0.6586 There is resistance at 0.6788 and 0.6858 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The Australian dollar gained 32 pips yesterday and closed the day with a white candlestick and settled above support at 0.6730. The Marlin oscillator behaves with restraint. This morning, there was already an attempt to attack this support. The attempts will probably be repeated, since the situation on the smaller chart is consistent with such a plan. A success will allow the price to establish itself in the starting positions for a breakout to the next support at 0.6640. In case it crosses yesterday's high (0.6786), the aussie will try to take a high target level at 0.6873 (January 19 low). On the four-hour chart, yesterday's rise was stopped by the resistance of the balance and MACD lines. The Marlin oscillator is in the positive area, but since it belongs to the leading oscillators, it can fall and return to the negative area. The signal is when the price settles below the 0.6730 level   Relevance up to 03:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336495

AUD/USD takes offers to extend pullback from late February. Previous resistance line, weekly horizontal support can challenge Aussie pair bears amid descending RSI towards oversold territory. U-turn from immediate upside hurdle, bearish MACD signals keep sellers hopeful; bulls need validation from 200-HMA. AUD/USD holds lower grounds near the intraday bottom surrounding 0.6730, reversing the previous day’s gains heading into Thursday’s European session. In doing so, the Aussie pair extends the previous day’s pullback from the February 23 swing low amid bearish MACD signals. Adding strength to the downside bias is the lower-high formation since late Wednesday, as well as the quote’s sustained trading below the 200-Hour Moving Average (HMA). Amid these plays, the AUD/USD pair is all set for further downside. However, a convergence of the previous resistance line from February 20 and a horizontal area comprising the lows marked so far during the current week, around the 0.6700 round figure, appears a tough nut to crack for the sellers. Not only the stated support confluence but the RSI (14) line also challenges the Aussie pair’s further downside by speedily dropping towards the oversold territory. In a case where the AUD/USD remains bearish past 0.6700, a quick fall toward December 2022 low surrounding 0.6630 can’t be ruled out. On the flip side, a successful break of the aforementioned horizontal resistance near 0.6785 guards the AUD/USD pair’s immediate upside. Following that, the 200-HMA level of near 0.6800 may act as the last defense of the bears. AUD/USD: Hourly chart Trend: Limited downside expected

An improvement in risk sentiment after the publication of upbeat macroeconomic data from China made it difficult for the US dollar to find demand on Wednesday. USD/JPY The USD/JPY pair in the Asian session recouped losses and rose towards 136.80. At the beginning of the European session, the yen dropped significantly to 136.2540, but quickly began to recover. At the time of writing, USD/JPY is trading at 136.7450 So far, the Japanese yen has been stable this week in a period where the US dollar has weakened significantly against most of its G-10 peers. The yen's lack of strength may reflect the belief that the new Governor of the Bank of Japan (BoJ) Kazuo Ueda will maintain the very loose monetary policy of his predecessor. EUR/USD The euro pair is in a downtrend. It started the day high above 1.0670 but dropped to trade around 1.0620. The euro fell against the dollar on Thursday after data showed inflation in the euro zone was not as high as investors had feared based on national readings in recent days. Eurozone inflation eased to 8.5% in February from 8.6% a month earlier on lower energy prices. The core inflation rate in the Euro Area rose for a third successive month hitting a fresh record high of 5.6% in February. The core CPI which excludes prices of energy, food, alcohol and tobacco went up 0.8%. The core number reinforces the idea that without decreases in energy prices inflation remains sticky and adding credence to the recent hawkish rhetoric from ECB policymakers. Investors now see the ECB's 2.5% deposit rate rising by a combined 100 basis points in March and May, then to around 4.1% at the turn of the year. Read next: Tesla Intends To Cut Assembly Costs, The White House Released The National Cyber Strategy | FXMAG.COM GBP/USD The pound pair against the euro is down today. GBP/USD traded below 1.20 again. GBP/USD extended its decline and dropped below 1.2000 on Thursday after failing to capitalize on Wednesday's US dollar (USD) weakness. The couple looks delicate. The British pound loses against the US dollar this Thursday as the dollar finds some support. Last night, Fed officials (Kashkari and Bostic) maintained their hawkish stance. From the UK's perspective, the Brexit deal between the Prime Minister and the EU. Trade disputes with Northern Ireland have now been resolved, but the most surprising aspect of the deal was the favorable reception from some senior Brexiteers who praised the new concessions. While this is positive for the overall UK economy, the currency remains driven by central bank policy. The Brexit deal could bring short-term relief to the pound against the USD. AUD/USD The Australian movement is similar to its European counterparts. The AUD/USD pair remains above 0.67 despite a significant drop from 0.6767 to 0.6730. Source: finance.yahoo.com, investing.com

AUD/USD grinds near intraday high, defends the first weekly gains in three. Bulls keep the reins amid hopes of US-China peace on trade, upbeat China data and mixed Aussie statistics. Fresh talks of Fed’s pivot trigger retreat in yields and propel Aussie pair. Markets remain dicey ahead of US ISM Services PMI, limiting AUD/USD moves. AUD/USD appears well-set to snap a two-week downtrend as it seesaws around the intraday top of 0.6752 during early Friday in Europe. In doing so, the Aussie pair cheers the US Dollar’s pullback amid risk-positive headlines about China. However, the cautious mood ahead of the US ISM Services PMI and mixed Aussie data, not to forget chatters of the Reserve Bank of Australia’s (RBA) policy pivot, seems to probe the bullish bias. Talks surrounding the resumption of the Sino-American trade dialogue seemed to have triggered the market’s optimism of late, which appears to favor the AUD/USD buyers. On the same line could be the hopes for an easy monetary policy from the People’s Bank of China (PBOC). However, the US-China tension at the Group of 20 Nations (G20) meeting, amid the former’s push for sanctions on countries having strong ties with Russia and aiding Moscow in the war with Ukraine, pokes the optimism and checks the Aussie pair’s upside momentum. It should be noted that the firmer China data and mixed Aussie figures, as well as the unimpressive US statistics, also challenge the pair traders. That said, China’s Caixin Services PMI traced the latest activity data for the dragon nation while printing 55.00 figures for February, versus 50.0 market forecasts and 52.9 previous readings. At home, Australia’s S&P Global PMIs for February came in firmer and help the AUD/USD buyers to keep the reins. Though, downbeat prints of Australia Home Loans and Investment Lending for Homes, for January, seem to cap the quote of late. On the other hand, the US Jobless Claims dropped to 190K during the week ended on February 24 versus 195K market forecasts and 192K prior. Further, Nonfarm Productivity for the fourth quarter (Q4) eased to 1.7% from 3.0% prior and 2.6% market forecasts while the Unit Labor Costs jumped 3.6% versus 1.6% analysts’ estimations and 1.1% previous readings. Elsewhere, Thursday’s statements from Federal Reserve Bank of Atlanta President Raphael Bostic renewed concerns about the Fed’s policy pivot as the decision-maker said, “The central bank could be in a position to pause the current tightening cycle by mid to late summer.” It should be observed, however, that Boston Fed President Susan Collins kept supporting the higher rates for longer as she said, “More rate hikes are required to bring inflation back in control.” Against this backdrop, the 10-year coupons drop two basis points to 4.05% while its two-year counterpart seesaws around 4.89% by the press time. Further, S&P 500 Futures struggle for clear directions after mild losses. The latest Reuters poll suggesting a peak in the RBA rate during the second quarter (Q2) of 2023 joins the polls suggesting the Fed’s policy pivot to challenge the AUD/USD traders. To overcome the indecision, today’s US ISM Services PMI, expected at 54.5 versus 55.2 prior readings, will be crucial ahead of the next week’s key events. Technical analysis AUD/USD portrays a one-month-old falling wedge bullish chart formation. However, a clear break of the 0.6775 hurdle becomes necessary for the buyers to retake control.

The US dollar declined against its major trading partners early Friday ahead of the release of service sector data for February from S&P Global. The US economic docket will feature the ISM Services PMI report on Friday. Recession fears could return if the headline PMI comes in below and the US Dollar could come under pressure ahead of the weekend. The Fed appearance schedule is also full on Friday. Dallas Fed President Lorie Logan is scheduled to speak followed by Atlanta Fed President Raphael Bostic, Fed Governor Michelle Bowman and Richmond Fed President Tom Barkin. Logan and Bowman both vote on the Federal Open Market Committee in 2023. USD/JPY The yen pair traded in the range of 136.60-136.70 in the Asian session. In the European session there was a dip to close to 136.00, but USD/JPY rebounded and traded at 136.19 Following the previous day's sharp slide from a multi-week high, the US Dollar (USD) was back in demand amid a further rise in the US Treasury bond yields and turned out to be a key factor acting as a tailwind for the major. The Japanese Yen (JPY), on the other hand, is weighed down by expectations that the Bank of Japan (BoJ) will stick to its dovish stance for the foreseeable future. In fact, the incoming BoJ Governor Kazuo Ueda stressed the need to maintain the ultra-loose policy to support the fragile economy and said earlier this week that the central bank isn't seeking a quick move away from a decade of massive easing. The market focus now shifts to the upcoming BoJ monetary policy meeting, scheduled next week. In the meantime, the divergent Fed-BoJ outlook should continue to lend support to the USD/JPY pair. EUR/USD The last day of the trading week for the euro pair was up in the Asian session. Also in the European session, the EUR/USD pair was increasing with moments of decline. Currently, the pair is at the level of 1.0614 ECB Governing Council member Pierre Wunsch said early Friday that a terminal rate of 4% could not be excluded if core inflation in the eurozone remains persistently high. Meanwhile, Morgan Stanley said in its latest research note that they have updated the ECB terminal rate projection to 4% following "material revisions" to inflation forecasts. GBP/USD A pair of cable makes up for losses all Friday. GBP/USD started the day at around 1.1950 and is now trading above 1.1990 The pound rose on Friday, boosted by data that showed business activity rose at the fastest rate in eight months in February, bolstering investors' view that UK rates would continue to rise after March. The final version of the S&P Global/CIPS UK Services Purchasing Managers' Index (PMI) rose to 53.5 last month from 48.7 in January, the strongest rate of increase since June last year. Any reading above 50 means expansion. AUD/USD The Austalitic exchanged similarly to the pound today, but fell in the European session and is currently trading above 0.6750. Source: investing.com, finance.yahoo.com

The U.S. dollar slid from a 2-1/2-month high versus the Japanese yen on Friday, on track for its largest weekly loss since mid-January against a basket of six major currencies, as traders stepped back to gauge the path for Federal Reserve policy. At the beginning of the week, optimistic PMI data for manufacturing from China allowed risk flows to return to the markets and hindered the strengthening of the USD. USD/JPY The yen pair started trading at 136.3840 for the week. Throughout the week, USD/JPY held above 136.00 except on Wednesday, where it traded below that level, recording a weekly trading low of 135.27. The next day, the yen pair rose and registered its highest trading level of the week at 137.05. The pair failed to maintain momentum and fell below 136.00 on the last day of trading to end the week at 135.8310. The Japanese Yen is weighed down by expectations that the Bank of Japan (BoJ) will stick to its dovish stance for the foreseeable future. In fact, the incoming BoJ Governor Kazuo Ueda stressed the need to maintain the ultra-loose policy to support the fragile economy and said earlier this week that the central bank isn't seeking a quick move away from a decade of massive easing. EUR/USD The beginning of trading in the EUR/USD pair was at weekly lows. The euro pair started trading at 1.0550 and for the first two days of the week rose above 1.06. This increase did not last long and the EUR/USD pair fell below 1.06. The beginning of the new month was very favorable for the euro pair as it gained and reached the highest trading level of the week at 1.0689. The exemplary momentum did not last long and the pair found themselves under pressure to fall towards 1.0580 again. The pair last day rebounded and traded above 1.06 (1.0638). GBP/USD The beginning of the week and at the same time the end of the month was favorable for the pound and the GBP/USD pair gained and thus reached the highest trading level of the week (Tuesday) at 1.2140. The new month brought a downward move to the cable pair and the pair tested below 1.20 again. On the last day, GBP/USD made up for the previous day and managed to cross the 1.20 level and close the trade at 1.2045. The British pound found some support on Friday thanks to the UK Services PMI data, as well as renewed risk appetite after better-than-expected China PMI data. From the UK's perspective, the focus will be on British GDP, which is likely to fall below 0%, and if the actual figures are confirmed, fears of recession will return, possibly hampering GBP growth. AUD/USD For the Australian, trading in the week was mixed, with both highs and lows. For the first days of trading, the AUD/USD pair gained in the direction of 0.6760, then fell sharply to open the week's low at 0.6698. After falling, the Aussie Pair rose until it reached a weekly high at 0.6783 before falling back towards 0.6710. The last day of trading was up for the AUD/USD pair, the pair ended the week close to the week's high, at 0.6771. The decline in the Australian dollar stalled after surprisingly strong data on manufacturing and services in China. However, for the AUD/USD rebound to be sustainable, a reversal in Australia's monetary policy and growth divergence with US monetary policy may be necessary. The macro data from Australia since early March has been disappointing. The Australian economy expanded at its weakest pace since last quarter, while monthly consumer prices rose less than expected in January. Building permits have fallen the most in history, suggesting the housing market is in the throes of interest rate hikes by the Reserve Bank of Australia. The main focus now is on the RBA's interest rate decision scheduled for March 7 - the central bank is widely expected to raise the cash rate by 25 basis points. Source: finance.yahoo.com, investing.com

Visually, the Australian dollar is consolidating at the support level of 0.6730 with short-term price retreats below the level by the lower shadows of the daily candlesticks. The overall consolidation range is marked by a gray rectangle. Currently, the gap is still open, so the price will likely head towards the upper limits of the range (0.6786). The Marlin oscillator is rising ahead of the price, and so far it is interpreted as a slowdown before it falls further. The price can reach the target support at 0.6640, the area where the November 29, 2022 low is located. On the four-hour chart, the price is above the MACD indicator line, the Marlin oscillator is in the area of growth, suggesting that the gap will close and the price will hit 0.6786. The Australian dollar as a whole is set for tomorrow's Reserve Bank of Australia meeting, where the consensus forecast is that the rate will be raised to 3.60% from the current 3.35%. Relevance up to 03:00 2023-03-07 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336759

In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, AUD/USD has now likely moved into a consolidative range. Key Quotes 24-hour view: “Last Friday, we expected AUD to trade sideways between 0.6700 and 0.6760. While AUD rose to 0.6775, there is no marked improvement in upward momentum. Today, AUD is unlikely to advance much further. Instead, AUD is more likely to trade between 0.6735 and 0.6780.” Next 1-3 weeks: “We have a negative AUD view since the middle of last month. In our latest narrative from last Thursday (02 Mar, spot at 0.6755), we indicated that ‘downward momentum is waning rapidly and the odds for AUD to weaken further have diminished considerably’. In NY trade, AUD rose to a high of 0.6775. While our ‘strong resistance’ level at 0.6800 is not breached, downward momentum has more or less fizzed out. In other words, the weak phase in AUD has ended. The current price actions are likely the early stages of a consolidation phase and AUD is likely to trade between 0.6695 and 0.6820 for the time being.”  

The US dollar weakened on Monday as investors awaited testimony from Federal Reserve Chairman Jerome Powell ahead of February's employment report later in the week, which is likely to influence how much more the US central bank raises interest rates. After making massive hikes last year, the Fed raised rates by 25 basis points in its last two meetings, but a plethora of resilient economic data fueled market fears that the central bank might return to an aggressive path. USD/JPY The yen pair started the week at 136.0380 but failed to stay above 136.00 and fell to 135.3890. After this fall, the USD/JPY pair rebounded, but at the beginning of the European session it fell again. Also after the second drop, the pair rebounded and managed to break above 136.00, but failed to hold. USD/JPY is trading below 136.00 at 135.94. The Japanese yen strengthened above 136 to the dollar amid general dollar weakness as investors cautiously awaited Tuesday and Wednesday's congressional testimony from Federal Reserve Chairman Jerome Powell. Meanwhile, the yen remains more than 6% below its January highs as Ueda, nominated governor of the Bank of Japan, doubled down on the bank's ultra-easy monetary policy. During the second parliamentary hearing of the approval process, Ueda stated that the benefits of the BJ stimulus outweigh the negative effects for the current economic scenario, adding that a move to more restrictive policies would only be necessary if inflation increased significantly. Ahead this week, the Bank of Japan’s (BoJ) monetary policy decision will be made on Friday although the market is not expecting any changes there. EUR/USD The EUR/USD pair started trading at 1.0628 and initially traded in the range 1.0625-1.0630. The euro pair then rose to levels around 1.0650, then to above 1.0660. This increase in the European session did not last and the pair dropped to levels around 1.0625. The euro may end the month slightly higher against the dollar, supported by signals from the European Central Bank about further interest rate hikes. ECB officials continue to point to a 50bps rate hike at its March 16 meeting as a deal done, with the market pricing in another 150bps hike by year-end GBP/USD The cable pair started trading at 1.2032 and held in the range of 1.2025-1.2040 in the Asian session. In the European session, the GBP/USD pair, as well as the EUR/USD pair, fell below 1.20, but rebounded and at the time of writing is at 1.2008. Sterling trading could be stable this week as it's hard to find a catalyst to break the currency out of recent ranges. Any further progress on the UK-EU deal to review post-Brexit trade arrangements in Northern Ireland is unlikely to be worth much more than pound sterling. AUD/USD The Australian pair started the week with a dip to the 0.6757 level and then fell to the 0.6743 level. After this decline, the AUD/USD pair rose to 0.6770 but failed to maintain momentum. The last hours of the Asian session for the Australian were in the range of 0.6750-0.6760. With the start of the European session, the AUD/USD pair began a decline, and at the time of writing it reached the level of 0.6728. The Australian dollar lost some of its gains Monday morning after the Chinese National People's Congress (NPC) released more conservative 2023 GDP forecasts. The forecast is currently at 5%, as opposed to the expected range of 5.5-6%, which could be disappointing for commodity-exporting countries like Australia, but a lower base could allow for a better chance of an upside surprise. Looking ahead, the Reserve Bank of Australia (RBA) will be in the spotlight tomorrow morning with its interest rate decision. The consensus is in favor of another 25 bp rate hike, which will be the 10th rate hike in a row by the central bank. This could cause the Australian dollar to find some support against the US dollar Source: investing.com, finance.yahoo.com

The Australian dollar is under pressure at the start of the new trading week. AUD/USD is trading at 0.6735 in Europe, down 0.50%. RBA expected to hike by 25 bp The RBA is widely expected to raise rates by 25 basis points on Tuesday, which would bring the cash rate to 3.60%, the highest level in a decade. The RBA’s aggressive rate tightening cycle has not been as effective as the central bank had hoped, as inflation has been stickier than expected. Australia’s monthly CPI for January dropped to 7.4%, down from 8.4% a month earlier. This drop indicates that rate hikes are having an impact on the economy, but there is a long road ahead before inflation falls back to the RBA’s target of 2-3%. There was some positive news on Monday, as the Melbourne Inflation gauge for February showed a drop in core inflation to 4.9% y/y, down from 5.3% in January. The headline figure remained unchanged at 6.3% y/y. Australian Treasurer Jim Chalmers has said he is “cautiously hopeful” that inflation has peaked, but it’s likely that the RBA will have to hike rates at least one more time before it can hit the pause button. Investors will be keeping a close eye on Governor Lowe’s rate statement, which will likely be hawkish given the stubbornly high inflation levels. Any hints about the need for further rate increases would likely be bullish for the Australian dollar. In the US, it promises to be a busy week. The key events are Fed Chair Powell’s semi-annual testimony before Congress and the nonfarm payroll report, both of which could move the US dollar. The markets will be keeping a close eye on Powell’s remarks and whether he will sound less hawkish, given the recent string of unexpectedly strong US releases. Nonfarm payrolls sizzled in January with 517,000 new jobs, but this is expected to be a one-time bump, with the estimate for February standing at 200,000. The surprisingly resilient labour market has the Fed concerned about wage pressures, and a strong wage growth release could raise expectations for further rate hikes.   AUD/USD Technical AUD/USD is testing support at 0.6749. Below, there is support at 0.6660 There is resistance at 0.6862 and 0.7025 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

AUD/USD has failed to capitalize on the hawkish RBA policy. The RBA continued the 25 bps rate hike spree and pushed the OCR to 3.60%. Australia’s monthly CPI indicator suggests that inflation has peaked. The AUD/USD pair is displaying a sideways auction in the early European session after a Reserve bank of Australia (RBA)’s monetary policy-inspired volatility. The Aussie asset looks vulnerable above the 0.6700 support despite the upbeat market mood. In the interest rate decision, RBA Governor Philip Lowe pushed the Official Cash Rate (OCR) by 25 basis points (bps) consecutively for the fifth time to 3.60% to sharpen monetary tools in the battle against persistent Australian inflation. RBA’s Lowe cited “The monthly CPI indicator suggests that inflation has peaked in Australia,” as reported by Reuters. Further downside in the US Dollar Index (DXY) looks likely amid the absence of recovery signs after printing a fresh day low near 104.16. S&P500 futures have reported more gains, indicating that investors have underpinned the risk-appetite theme. AUD/USD is showing a tad longer consolidation in the range of 0.6700-0.6784 on an hourly scale. The 50-period Exponential Moving Average (EMA) at 0.6737 is acting as a major barricade for the Australian Dollar. A slippage by the Relative Strength Index (RSI) (14) in the bearish range of 20.00-40.00 is indicating a downside momentum ahead. A downside move below March 01 low around 0.6700 will drag the Aussie toward December 07 low at 0.6669 and December 20 low at 0.6629. In an alternate scenario, a confident break above March 01 high at 0.6784 will send the asset toward the round-level resistance at 0.6800 followed by February 06 low at 0.6855. AUD/USD hourly chart  

The U.S. dollar held steady on Tuesday ahead of testimony before Congress by Federal Reserve Chair Jerome Powell, while the Aussie slid after the Reserve Bank of Australia hinted it might nearly be done with monetary tightening. The RBA is no exception in warning of further tightening. Central bankers, including the US Fed and European Central Bank, said more work needed to be done to fight inflation. The prospects for further policy tightening by the Fed continue to act as a tailwind for the US Dollar (USD), the markets seem convinced that the US central bank will stick to its hawkish stance and keep rates higher for longer in the wake of stubbornly high inflation. The bets were lifted by the incoming US macro data. Investors will also face the release of the closely watched monthly US employment data, popularly known as the NFP, this week. USD/JPY The USD/JPY pair started trading above 136.00 on Tuesday and traded above 136.10 in the first hours. The yen pair failed to hold and fell below 136.00 and tested the level of 135.8440. In the European session there was an even greater drop to 135.60. Currently, the pair has managed to rebound and the hadel takes place close to 136.00. The decline, however, remains contained amid expectations that the Bank of Japan will maintain very loose policy to support a fragile domestic economy. In fact, the new BoJ governor, Kazuo Ueda, said last week that the central bank is not aiming for a quick turnaround from a decade of massive monetary easing. As such, the BoJ's monetary policy decision, scheduled to be announced on Friday, is unlikely to give the JPY any respite. EUR/USD The euro pair traded high above 1.0680 in the Asian session. In the European session, the EUR/USD pair fell below 1.0660. At the time of writing, the EUR/USD pair is just above 1.0660. Looking ahead, it seems that comments from central bank officials could be a driving force for the EUR/USD rate along with other FX markets and bond markets in general. The ECB is scheduled to meet on Thursday, March 16 ahead of the Fed, which begins its meeting next week on March 22. An additional risk of events may also be data on GDP in the whole euro, which will be released on Wednesday. GBP/USD The cable pair started trading above 1.2020 and traded around this area in the Asian session. GBP/USD managed to rise above 1.2060 but lost momentum and fell below 1.20. The pound pair is at the time of writing just below 1.20, at 1.1992. Although the US dollar came under renewed selling pressure on Monday, the GBP/USD pair struggled to gain traction. Furthermore, a sense of stability has returned to the UK property market after last year's turmoil, with a second consecutive month of gains after falling in December 2022. However, prices remain at 2.5% q/q, and underlying activity continues to indicate a downtrend. AUD/USD The pair of the Australian started trading above 0.67, but had already fallen to 0.66 earlier in the Asian session. The Aussie pair is currently trading below 0.6670. The Reserve Bank of Australia raised its benchmark interest rate by 25 basis points in an attempt to control inflation reaching its highest level in three decades. The Reserve Bank of Australia raised its cash rate by a quarter of a percentage point to 3.60% and said further monetary policy tightening would be needed. Source: finance.yahoo.com, investing.com

The Australian dollar continues to lose ground and is sharply lower on Tuesday. In the European session, AUD/USD is trading at 0.6676, down 0.81%. Earlier, the Australian dollar fell as low as 0.6674, its lowest level since December 23rd. RBA delivers a ‘dovish hike’ There were no surprises from the RBA, which hiked rates by 25 basis points and raised the cash rate to 3.6%. This marked a fifth consecutive increase of 25 bp, as the central bank continues to raise rates in modest increments in a bid to curb inflation without choking economic growth. This rate decision was noteworthy in the language of the rate statement, which suggested that the RBA could be nearing the end of the current rate cycle. The statement removed a reference in the February statement to needing to raise rates “over the months ahead”, and instead stated that “tightening of monetary policy will be needed to ensure that inflation returns to target. The markets picked up on this change in language as a dovish signal. As well, the statement explicitly said that inflation had peaked, another hint that multiple rate hikes may not be needed. The dovish tone of the statement has sent the Australian dollar considerably lower today. In the US, Federal Reserve Chair Powell testifies today on the semi-annual monetary policy report. The Fed has been consistently hawkish about the need to continue raising rates and the markets have aligned their expectations closer to the Fed. It was only a few weeks ago that the markets were projecting a pause followed by rate cuts, but this has changed to expectations for three more rate hikes this year. There is a lot of uncertainty in the air about inflation and interest rates after a host of stronger-than-expected data in January, such as a blowout employment report. These strong numbers may have been a blip, and it will be interesting to see if Powell reiterates a hawkish stance and ignores the January numbers. The markets are widely expecting a 25-basis point hike at the March 22 meeting, but a 50 bp increase cannot be discounted, as the Fed has said that the pace of rate hikes could be ‘higher and longer’.   AUD/USD Technical AUD/USD is testing support at 0.6749. Below, there is support at 0.6660 There is resistance at 0.6862 and 0.7025 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

AUD/USD picks up bids to pare the biggest daily loss in a month. Short-term support line joins oversold RSI (14) to trigger corrective rebound. Previous support line from February, 50-SMA restrict recovery moves. Multiple levels to prod the Aussie pair bears around 0.6540-20 region. AUD/USD recovers from a four-month low surrounding 0.6565 as it approaches the 0.6600 threshold heading into Wednesday’s European session, poking 0.6595 by the press time. In doing so, the Aussie pair bounce off a two-week-old descending support line while paring the biggest daily loss since February 03. Not only the downward-sloping support line from February 17 but the oversold RSI (14) also puts a floor under the AUD/USD price. The recovery moves, however, remain elusive as the previous support line from February 06, close to 0.6625 at the latest, guards the pair’s nearby upside. Following that, the 50-SMA hurdle surrounding 0.6725 can challenge the AUD/USD buyers. It should be noted that the upside break of 0.6725 isn’t an open invitation to the AUD/USD bulls as the monthly high near 0.6775 appears the key hurdle. Meanwhile, a downside break of the aforementioned support line, close to 0.6565 at the latest, could drag the Aussie prices towards the 0.6540-20 support zone as multiple levels marked in October 2022 might challenge the bears afterward. In a case where the AUD/USD pair remains bearish past 0.6520, the odds of witnessing a slump toward the previous yearly low surrounding 0.6170 can’t be ruled out. AUD/USD: Four-hour chart Trend: Limited recovery expected

The dollar hit multi-month highs against most other major currencies on Wednesday after Federal Reserve Chairman Jerome Powell warned that US interest rates may need to rise even faster and higher than expected to contain stubborn inflation. Powell told lawmakers on Capitol Hill on Tuesday that recent economic data from the United States was better than expected, so the pace and size of future hikes may also need to be stepped up, pushing expectations for short-term US interest rates higher. Higher interest rates are good for the dollar as they improve its yield and investors seek safety while global stock markets fall. The dollar also surpassed its 200-day moving average against the yen for the first time this year. The dovish slope from the RBA contrasted with the hawkish Jerome Powell. USD/JPY The yen pair started the day trading above 137.40 and rising towards 137.90. After this increase, the USD/JPY pair began to fall. At the time of writing, the USD/JPY pair was above 137.40, but has the potential to fall further towards 137.30. On the Japanese front, during the final political meeting with Governor Haruhiko Kuroda this week, the Japanese central bank will maintain a very loose monetary policy. Data on Tuesday showed Japan's real wages fell by the most in nine years in January, as four-decade high inflation erodes Japan's purchasing power. EUR/USD The EUR/USD pair started trading above 1.0545, but quickly started a decline towards 1.0530. After this decline, the EUR/USD pair started rising towards 1.0545 and kept trading in the 1.0540-1.545 range. At the time of writing, papra has dropped to 1.0540 and is now at 1.0537. German data released today showed that retail sales weakened more than expected, while industrial production rose sharply, easily beating forecasts. Moreover, the hawkish tone of Powell's comments also seems to have an impact on expectations of interest rate hikes by the European Central Bank (ECB). According to Reuters, markets see a 65% probability that the ECB's final interest rate will be 4.25% this year, compared to a 4.00% final interest rate last week alone. The ECB's hawkish bets could help the euro limit losses in the short term. GBP/USD The cable pair started trading above 1.1825 but similarly to the euro then fell. After falling to the level of 1.1810, the GBP/USD pair rebounded and rose towards 1.1840. After breaking above 1.1845, the pound pair fell back towards 1.1830. The pound reacted negatively to Fed Chairman Jerome Powell's more aggressive guidance during yesterday's appearance before the Senate Banking Committee. UK OIS markets are now fully pricing in a 25 basis point (BoE) rate hike for the first time since February 27. While BoE expectations are hawkish, the policy divergence is more pronounced than ever with CME Group's FedWatch tool pointing to a 75% probability of a 50 bp rate hike at the next Fed meeting. AUD/USD The movement of the Australian pair is similar to that of the pound-euro pair. After falling to the level of 0.6570, the AUD/USD pair broke again and broke above 0.66, but did not hold and fell to the level of 0.6698. The Australian dollar fell to a four-month low on Wednesday as diverging interest rate expectations between the US and Australia sent local yields to their biggest discount to government bonds in nearly four decades. Source: finance.yahoo.com, investing.com

The Australian dollar has stabilized on Wednesday after a dreadful outing a day earlier. In the European session, AUD/USD is trading just below the 0.66 line. AUD/USD sustained its second most bearish day this year on Wednesday, with a staggering decline of 2.1%. Earlier today, the Australian dollar touched a low of 0.6567, its lowest level in four months. A combination of a dovish rate hike by the Reserve Bank of Australia and hawkish comments from Fed Chair Powell sent the Australian dollar reeling. The RBA hike of 25 basis points was practically business as usual, but investors picked up on the removal of a reference to raising rates “over the months ahead”, a possible signal that the RBA could be near the end of the current rate-tightening cycle. The rate statement explicitly said that inflation had peaked, clearly a dovish signal from policy makers. Earlier today, Governor Lowe used a second “p” word which weighed on the Australian dollar, saying that a pause in rate increases was closer. Does that mean that the April meeting will be a “one and done”? Perhaps, but Lowe has said previously that the Bank will make its rate decisions on a meeting-by-meeting basis, after evaluating the data. This means that the next inflation and employment reports will have a critical impact on what the RBA does at next month’s meeting. In the US, Fed Chair Powell remained in hawkish mode in his testimony on Capitol Hill. Powell pointed to the recent string of strong releases and said the Fed would likely need to raise rates more than it had anticipated. Powell said that the Fed would evaluate the need to increase the pace of rate hikes based on the “totality of the data”. The remarks caused a huge shift in market pricing, with the likelihood of a 50-bp at the March 22 meeting rising to 70%, up from 25% prior to Powell’s testimony, according to the CME Group.   AUD/USD Technical 0.6565 is a weak support line. Below, there is support at 0.6402 There is resistance at 0.6626 and 0.6749 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The Australian dollar traded in a 60-point range yesterday, shedding tension after Tuesday's strong decline. The upper limit of the correction was the target level of 0.6640. The price started the day lower, but it is unlikely to fall below support at 0.6550, as market participants are preparing for tomorrow's U.S. labor report. A breakthrough of 0.6550 will open the target at 0.6455. On the 4-hour chart, the price is falling ahead of the oscillator, and if the price falls today, ahead of the important U.S. report, it will turn into a local convergence. And so the aussie's sideways movement is supported. Let's wait for Friday   Relevance up to 03:00 2023-03-10 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337088

AUD/USD is attempting to scale above 0.6600, however, the risk-off mood is still intact. A Doji candlestick formation indicates indecisiveness among market participants. An oscillation in the 20.00-40.00 range by the RSI (14) indicates that the bearish momentum is currently active. The AUD/USD pair is displaying a subdued performance below 0.6600 in the Asian session. The upside in the Aussie asset seems restricted as Reserve Bank of Australia (RBA) Governor Philip Lowe has considered a pause in the rate-hiking spree and the Chinese economy is struggling to accelerate domestic demand despite significant reopening measures. S&P500 futures have witnessed immense pressure as a sense of deflation conveyed by Chinese Consumer Price Index (CPI) and Producer Price Index (PPI) data indicates that the economy will take plenty of time to strengthen its economic outlook. The US Dollar Index (DXY) is auctioning in a limited range above 105.20 as investors are awaiting the release of the United States Nonfarm Payrolls (NFP) data for fresh impetus. AUD/USD has formed a Doji candlestick pattern, which indicates indecisiveness among the sentiment of market participants for further direction. Usually, a Doji formation indicates a reversal after an established trend. However, it requires more filters to confirm a reversal. Also, the negligence of Doji is considered as the continuation of the ongoing trend. The Australian Dollar might continue to face selling pressure from the 10-period Exponential Moving Average (EMA) at around 0.6700. An oscillation in the 20.00-40.00 range by the Relative Strength Index (RSI) (14) indicates that the bearish momentum is currently active. The momentum indicator is not shown any sign of divergence and a situation of oversold. Going forward, a breakdown of Wednesday’s low at 0.6568 will drag the asst toward the horizontal support plotted from October 4 high at 0.6547 followed by the round-level support at 0.6500. In an alternate scenario, a break above Doji’s high at 0.6629 will push the Aussie asset toward December 22 low at 0.6650. A break above the same might expose the major to February 27 low near 0.6700. AUD/USD daily chart  

The dollar held near a three-month high on Thursday, backed by a message from Federal Reserve Chairman Jerome Powell that interest rates will need to go higher and possibly faster. On the second day of his testimony before Congress on Wednesday, Powell confirmed his message, though he made a cautious point, saying that the debate over the scale and path of future interest rate hikes is still ongoing and will depend on the data. USD/JPY The yen pair has been in a downtrend since the beginning of the day. During the day, USD/JPY dropped from 137.2360 to 136.2230. Concerns about a deeper global economic downturn continue to weigh on investor sentiment, which in turn favors a safe haven for the Japanese yen (JPY) and puts some downward pressure on the major currency. Market concerns were further fueled by the latest Chinese inflation data, which showed that domestic demand remains weak and weakened hopes for a strong recovery in the world's second largest economy. However, any significant pullback in USD/JPY still seems elusive amid expectations that the Bank of Japan (BoJ) will remain dovish to support a fragile domestic economy. In fact, the new BoJ governor, Kazuo Ueda, recently stressed the need to maintain ultra-loose policy settings and said the central bank is not aiming for a quick turnaround from a decade of massive easing. Bets were further raised after the release of the final GDP print, which showed Japan's economy narrowly avoided a technical recession in the final months of 2022. EUR/USD The euro pair started the day with a drop from 1.0556 to 1.0542. After this decline, the EUR/USD pair started an upward move towards 1.0570. After this move, the EUR/USD pair fell to the level of 1.0562. EUR/USD remains close to monthly lows after the recovery faded near 1.0570 during the US session. The US dollar failed to pick up a new leg, but maintained its recent gains. The dollar looks solid as markets are priced at "higher for longer" US interest rates. Data released on Wednesday helped consolidate expectations. Market participants also see a more hawkish European Central Bank (ECB) as recent research points to a higher final rate. Thursday's economic report does not include first-tier reports for the eurozone and preliminary claims for US unemployment benefits. Markets will continue to weigh Powell's message as they prepare for non-farm payrolls. GBP/USD The beginning of trading in the GBP/USD pair started trading with the application to the euro. Then, still in the Asian session, it rose slightly. The cable pair recorded a significant increase at the beginning of the European session and exceeded 1.1880. Currently, the level of the GBP/USD pair is above 1.1870. A permanent rebound seems unlikely as buyers refrain from betting on sterling further strengthening due to policy divergence between the US Federal Reserve and the Bank of England, although BoE expectations are hawkish. AUD/USD The Australian pair traded in the 0.6580-0.6595 range at the beginning of the Asian session. Still in the Asian session there was a significant increase above 0.6610. After this surge, AUD/USD traded in the 0.6610-0.6615 range. At the time of writing, the Aussie pair is trading at 0.6612. The Australian dollar is trying to bounce back this Thursday after Tuesday's decline. The morning started with weak economic data from Australia in the form of building permits and private home permits for January. Both sets of data printed in line with estimates but reached levels last seen in January 2022. This deterioration in the housing and construction sectors is a reflection of the high interest rate environment created by the Reserve Bank of Australia (RBA). Source: investing.com, finance.yahoo.com

The dollar index was steady on Friday, a rare spot of calm in volatile global markets ahead of key U.S. payrolls data later in the day, while the yen weakened after the Bank of Japan kept stimulus settings steady. The focus for today is the publication of the non-farm payroll (NFP) in the US with forecasts of 205,000. USD/JPY With the beginning of the trade, USD/JPY traded later at 136.00, but quickly bounced back to 136.75. In the following hours of the Asian session, the prices of the yen pair were above 136.50. At the beginning of the European session, the pair's exchange rate fell to the level of 136.25, but this time it managed to recover. At the time of writing, USD/JPY is trading above 136.95 but still below 137.00. In his last meeting as the BOJ Governor Haruhiko Kuroda left policy settings steady, in line with expectations, given the Japanese central bank adjusted the yield band as recently as December. Incoming BOJ Governor Kazuo Ueda has said the central bank must maintain its current ultra-easy policy for now until there are signs that inflation has sustained above BOJ’s 2% target EUR/USD The euro pair trading on Friday is quite mixed. In the Asian session, the EUR/USD pair was held just after 1.06 and above 1.0585. In the European session, the euro was both above 1.0605 and below 1.0580. At the time of writing, the EUR/USD pair is below 1.0590. The euro rises against the dollar after heavy losses at tech-focused U.S. lender SVB Financial and could extend its gains on potentially softer U.S. jobs data later. The euro gained some support this Friday morning thanks to slightly weaker dollar and better than expected German CPI data. Although the actual numbers were printed as forecast, the figure of 8.7% underscores heightened and persistent inflationary pressures in Germany. As Germany is the largest economy in the Eurozone, the inflation release acts as a proxy for the wider region, reinforcing hawkish sentiment on the part of the European Central Bank (ECB). To close the trading session from a EURUSD perspective, ECB's Christine Lagarde is due to speak and may reiterate the need to suppress inflation after today's German data. GBP/USD The pair of the pound, contrary to the euro, trades calmly. In the zajastj session, the cable pair held around 1.1930, but was mostly below this level. With the European session, the GBP/USD pair began to grow. The GBP/USD pair managed to get close to the 1.20 level, but did not maintain momentum and at the moment of writing the text is trading after 1.1977. Sterling rose on Friday after Britain's economy was shown to have grown by more than expected in January, further allaying fears of a recession. The Office for National Statistics (ONS) said Britain's economy expanded 0.3% month-on-month, after a drop of 0.5% in December. AUD/USD The movement of the pair Aussie equals and z is mixed. At the beginning of the Asian session, the AUD/USD pair fell towards 0.6570 and then increased towards 0.66. In the following hours, the Australian pair remained in the range of 0.6585-0.6595. After a surge, AUD/USD has fallen again and is now trading below 0.6590 Source: investing.com, finance.yahoo.com

The dollar weakened on Friday after U.S. labor data for February showed slower wage growth, suggesting an easing of inflation pressures may keep the Federal Reserve's pace of interest rate hikes modest and thereby reduce the greenback's appeal. USD/JPY The yen pair started trading this week at 135.9770. For the first two days, USD/JPY traded mostly below 136.00. After that, the yen pair rose and reached a trading high of 137.8850. After reaching the top, the pair turned down and the pair fell towards 136.00. The lowest trading level was recorded on the last day of trading at 134.1710. The USD/JPY pair traded at 135.0480 . In his last meeting as the BOJ Governor Haruhiko Kuroda left policy settings steady, in line with expectations, given the Japanese central bank adjusted the yield band as recently as December. Incoming BOJ Governor Kazuo Ueda has said the central bank must maintain its current ultra-easy policy for now until there are signs that inflation has sustained above BOJ’s 2% target. EUR/USD The euro pair started trading at 1.0632. For the first two days of trading, the EUR/USD pair rose towards 1.0695, but failed to maintain momentum and plummeted below 1.06. After this drop, the euro remained below 1.06 for the next trading days, reaching its lowest level at 1.0529 on Wednesday. Despite the low level below 1.06, the pair was increasing its level day by day. The highest level was recorded by the EUR/USD pair on the last day of trading and it managed to exceed the level of 1.07 (1.0701). The trading session closed at 1.0643 . Moreover, the hawkish tone of Powell's comments also seems to have an impact on expectations of interest rate hikes by the European Central Bank (ECB). The ECB is scheduled to meet on Thursday, March 16 ahead of the Fed, which begins its meeting next week on March 22. GBP/USD The cable pair started trading at 1.2033. For the first two days of trading, GBP/USD traded in the 1.2000-1.2050 range, but failed to maintain momentum and plummeted below 1.19. After this decline, the pound pair remained in the range of 1.1810-1.1850 for the next trading days, and the lowest level was recorded in the range at 1.1812. The GBP/USD pair broke the high end of the range in the second half of Thursday and has been on the rise since then, crossing the 1.19 level. The highest level of the week was reached by the pair on the last day of trading at 1.21107. The closing of the trading session was at 1.2032. AUD/USD The Australian pair started the week trading at 0.6755. The AUD/USD pair was falling, but remained above 0.67 for the first few days. Already on Tuesday in the American session, the AUD/USD pair recorded a significant drop to levels below 0.66. Over the next few days, AUD/USD traded in the 0.6575-0.6625 range. The lowest level was also recorded by the Aussie pair in this range, at 0.6572. The highest level of the week was in the first trading days on Monday at 0.6771. The AUD/USD pair ended the week at 0.6584 . Weak economic data from Australia in the form of building permits and private home permits for January arrived this week. Both sets of data printed in line with estimates but reached levels last seen in January 2022. This deterioration in the housing and construction sectors is a reflection of the high interest rate environment created by the Reserve Bank of Australia (RBA). The Reserve Bank of Australia raised its cash rate by a quarter of a percentage point to 3.60% and said further monetary policy tightening would be needed. Source: finance.yahoo.com, investing.com

The Australian dollar showed restraint on Friday, as the U.S. dollar fell 0.59% (USDX). This morning, the aussie is trying to grow as far as the technical factors allow it. Resistance is at 0.6640, the Marlin oscillator is rising ahead of the price and this boosts the chances of the price settling above this level. In case it succeeds, the price can climb up to 0.6730. But ideologically, the AUD/USD is still late with growth. And in today's Asian session, commodity prices fell, and Australian government bonds have barely made it out of the yield pit after a two-week decline from 3.73% to 3.15% (5-year bonds). On the four-hour chart, the price encountered resistance from the MACD and balance lines. Convergence with the oscillator is almost worked out, but the signal line is intensively growing. Therefore, I expect growth after AUD climbs above the MACD line at 0.6655. Nevertheless, this is still an alternative scenario, though there is still a high probability of its realization. As for the main scenario, I expect the price to settle below 0.6640 and fall to 0.6550. We're waiting for a resolution to this scenario Relevance up to 03:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337350

In the opinion of Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia, a potential drop to the 0.6500 region in AUD/USD seems to be losing traction in the short term. Key Quotes 24-hour view: “Last Friday, we held the view that AUD ‘is likely to trade with a downward bias but 0.6560 is expected to offer strong support’. AUD subsequently dropped to 0.6565 before rebounding to a high of 0.6641. While there is no significant improvement in upward momentum, AUD could advance further to 0.6660. The strong resistance at 0.6700 is unlikely to come under threat. On the downside, a breach of 0.6580 (minor support is at 0.6600) would indicate that AUD is unlikely to advance further.” Next 1-3 weeks: “In our most recent narrative from last Wednesday (08 Mar, spot at 0.6585), we highlighted that AUD ‘is likely to weaken further but any weakness is likely to be at a slower pace’. We added, ‘The major support at 0.6500 may not come into view so soon’. Last Friday, AUD dipped to 0.6565 before rebounding sharply. Downward pressure is beginning to ease and the odds of AUD dropping to 0.6500 have diminished. However, only a break of 0.6700 (no change in ‘strong resistance’ level) would indicate that AUD has moved into a consolidation phase.”

The dollar fell on Monday on heightened expectations the Federal Reserve will be less aggressive with monetary policy as authorities stepped in to limit the fallout from the sudden collapse of Silicon Valley Bank. The U.S. government announced several measures early in the Asian trading day, saying all SVB customers will have access to their deposits starting on Monday. Tomorrow’s US CPI report will make things interesting should inflation come in higher than expected, making the Fed’s task that much harder. USD/JPY The yen pair started the new week at the level of 134.8590 and in the first trading hours it was in the range of 134.25-134.75. USD/JPY then started a dip towards 133.75 but rebounded back to near 134.75. In the European session, USD/JPY fell again, but this time towards 133.00. At the time of writing, the yen pair is trading around 133.40. Concerns about the imposition of a global economic action continue to weigh on investor sentiment, which in turn favors a safe haven for the Japanese yen (JPY) and puts some downward pressure on the major currency. Both added further fueled by recent Chinese volume data, which appear to have left domestic demand weak and lowered on a strong recovery in the world's second-largest economy. However, any significant pullback in USD/JPY still seems elusive amid expectations that the Bank of Japan (BoJ) will remain dovish to support a fragile domestic economy. In fact, the new BoJ governor, Kazuo Ueda, recently stressed the need to maintain ultra-loose policy settings and said the central bank is not aiming for a quick turnaround from a decade of massive easing. Bets were further raised after the release of the final GDP printout, which showed Japan's economy narrowly avoided a technical recession in the final months of 2022. EUR/USD The euro pair started the day at 1.0686, but started falling. After the decline, the EUR/USD pair gained momentum and exceeded 1.07. In the following hours, the EUR/USD pair traded in the 1.0720-1.0730 range. In the European session, the euro fell again below 1.07 and at the time of writing trades above 1.0670. EURUSD rose overnight to a new monthly high of 1.0737 as the USD sell-off continued. At the European open, EURUSD pulled back slightly, flirting again with 1.0700 as markets scrutinize the SVB news and emergency measures taken by the US authorities to ensure confidence in the banking sector. Regulators have confirmed that the Bank's customers will have access to their deposits on Monday, while launching a new facility to give banks access to emergency funds.  EURUSD continues to look more favorable going forward as market participants dropped expectations for a 50bps hike by the Federal Reserve at its March meeting on Friday. This is in contrast to the European Central Bank (ECB), whose interest rate decision will be taken on Thursday, with consensus and market participants favoring a 50 basis point hike. GBP/USD GBP/USD started the day at 1.2077 and the first moves were similar to the euro. In the Asian session, the pair of the cable crossed the level of 1.2125, but did not maintain momentum and started a downtrend that is still ongoing. At the time of writing, GBP/USD is below 1.2075. AUD/USD The movement of the Australian pair is like the euro. AUD/USD started trading at 0.6633 and then fell towards 0.6600. After the decline, the Aussie pair rose and for the next hours of trading in the Asian session it was in the range of 0.6660-0.6670. In the European session, the AUD/USD pair started a downward move towards 0.6610. At the time of writing, the trading level of the Aussie pair was below 0.6620. The Australian dollar gained support on Monday morning after continued concerns over the collapse of the Silicon Valley Bank. The result was a dovish overestimation of Fed interest rates. Money markets have drastically reduced the potential for a 50bps towards a 25bps increment. Source: finanace.yahoo.com, investing.com

The Australian dollar is considerably higher on Monday. In the European session, AUD/USD is trading at 0.6617, up 0.58%. Earlier in the day, AUD/USD rose 95 points before paring much of those gains. Bank collapse clouds Fed policy The week is starting off with a light data calendar, but the markets are abuzz after the Silicon Valley Bank (SVB) suddenly collapsed. The failure of SVB has raised contagion fears but so far the damage seems contained and hasn’t weighed too much on the large banks. The Federal Reserve and Treasury Department stepped in quickly and said SVB depositors would be protected, which calmed down jittery markets to some extent. The SVB debacle was the largest failure of a US bank in 15 years and has dramatically shifted market pricing of interest rates expectations. Before the collapse, the markets had priced a 50-bp hike at 70% and a 25-bp at 30%. Currently, there is a 70% of a 25-bp increase and a 30% chance of the Fed taking a pause. This shift away from a 50-bp hike is weighing on the US dollar, which has lost ground against the major currencies as a result. Still, if it becomes clear that no further banks are in danger of failing, we could see the markets again price in a 50-bp increase. Besides the contagion issue, investors will be keeping a close eye on Tuesday’s inflation report. The February US employment report on Friday was hot/cold. Job growth came in at 311,000, blowing past the estimate of 225,000. The rest of the report was not as impressive and lent support to the view that the labour market may be about to cool. Wage growth ticked lower to 0.2% m/m, down from 0.3% in January and a consensus of 0.3%. As well, the unemployment rate rose to 3.6%, above the prior reading of 3.4%, which was also the estimate. Australia releases consumer and business confidence indicators on Tuesday, with both expected to show improvement. Westpac Consumer confidence is expected to post a gain of 0.1% after a miserable -6.9% reading, while National Australia Bank’s Business Conditions are projected to improve to 21, following a reading of 18 prior.   AUD/USD Technical AUD/USD tested 0.6639 in resistance earlier in the day. Above, there is resistance at 0.6713 There is support at 0.6508 and 0.6434 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

AUD/USD hits the high at 0.6716 and retraces. Risk-averse environments keeping a lid on AUD/USD price appreciation. US CPI could reinforce the pair to break major support at 0.6560.    AUD/USD hits the ceiling on a descending trendline after a rebound from the four-month low at 0.6564. The sharp rebounds came on Monday upon the US Dollar's weakness. Receding bets for a 50-bps Federal Reserve (Fed) rate hike have prompted AUD/USD to surge higher, although the downside bias is likely to remain intact, in a risk-averse environment led by SVB fallout.   Any upside momentum for AUD/USD is likely to remain capped at Monday’s high around the 0.6713 mark, which is a support-turned-resistance and coincides with a descending trendline starting from February on a daily chart. A break above will lead the pair to confront the next resistance at around 0.6766 which is pegged with 21-day Moving Average (DMA). Both the 21-DMA and 50-DMA are pegged above the current price level, which is technically exerting overhead price pressure on AUD/USD and also confirming the bearish bias for the pair.  Downside support is seen at 0.6560, which is a key support level for the AUD/USD. A convincing break below will likely put the pair in a vacuum without any major support for a long distance. Regarding the said level, the pair has respected it on the last three attempts and AUD/USD looks resilient above that price point. The intermediate support lies at the psychological 0.6500 level.     AUD/USD: Daily chart  

The dollar rose in somewhat calmer trading on Tuesday after collapsing on Monday following the collapse of Silicon Valley Bank (SVB) as investors waited for the release of US consumer inflation data later in the day. Tuesday's data on the Consumer Price Index (CPI) could potentially fuel further volatility in global markets, coming a day after fears of a potential banking crisis caused traders to quickly lower their expectations of a Federal Reserve rate hike. Over the weekend, US authorities took emergency action in response to the collapse of the SVB, promising depositor protection to bolster bank confidence. US President Joe Biden on Monday announced measures to ensure the security of the banking system. USD/JPY The yen pair started the day at 133.0870. The USD/JPY pair rose towards 134.00 in the first hours of trading, but failed to maintain momentum and fell towards 133.25. From then on, USD/JPY traded around 133.50 until the end of the Asian session. In the European session there was an upward impulse and the yen pair breaks through 134.00. At the time of writing, USD/JPY is above 134.10. EUR/USD The Asian session for the euro pair, which started Tuesday's session at 1.0727, was bearish. At the end of the Asian session, EUR/USD fell below 1.07. The European session brought an upward impulse to the EUR/USD pair and the trade rebounds above 1.07 again. The euro is trading cautiously this morning which is to be expected as markets prepare for the upcoming US CPI report. Meanwhile, markets are also trying to figure out whether SVB collapse will influence the European Central Bank's (ECB) rate decision later this week. ECB policymaker Yannis Stournaras said on Tuesday that he does not see any impact from the collapse of Silicon Valley Bank (SVB) on Eurozone banks. Although the ECB is in quiet period, the Euro could stay resilient against its rivals in case other ECB policymakers deliver similar comments. GBP/USD The cable pair started Tuesday's session at the level of 1.2168 and, just like the euro pair, was in a downward move in the Asian session. Towards the end of the Asian session, the GBP/USD pair got a strong upward impulse towards 1.2180. In the European session, the pound pair again started to fall towards 1.2150. At the time of writing, GBP/USD is trading above 1.2160. Early Tuesday, the data published by the UK's Office for National Statistics showed that the Unemployment Rate remained unchanged at 3.7% in three months to January. More importantly, annual wage inflation in the three months to January, as measured by Average Earnings Including Bonus, declined to 5.7% from 6% in December. Similarly, Average Earnings Excluding Bonus retreated to 6.5% in the same period from 6.7%. AUD/USD The Aussie pair started trading at 0.6656 and like the European pairs the first move was down. Still in the Asian session, the AUD/USD pair rebounded and grew towards 0.6672. The upward momentum was not maintained in the European session and the pair of the Australian pair started a downward move towards 0.6645. At the time of writing, AUD/USD is trading at 0.6651. Most Asian currencies weaken against the USD in the morning session amid higher Treasury yields. Source: investing.com, finance.yahoo.com

The AUD/USD pair updated its 4-month price low last Friday, hitting 0.6567. The bears managed to end the trading week within the 65th figure, despite the general weakening of the U.S. dollar. At the beginning of the current trading week, the buyers took the initiative but their achievements remain relatively modest. On Monday, the pair sharply surged to 0.6720, but by the end of the trading day it retreated to the 66th figure, where it drifted. The Aussie seems to be the outsider on the backdrop of the other major currency pairs. For instance, the pound gained almost 300 points against the greenback, and the yen gained 400 points. The Australian dollar, in its turn, could not take advantage of the situation to the full extent: the buyers of AUD/USD are wary of the upward price surges and take profit at the first opportunity (thus canceling the upward momentum). This skepticism towards the Aussie seems an echo to the March RBA meeting, the outcome of which was not in favor of the Australian dollar. The RBA is getting ready to draw a line Reacting to the outcome of the Reserve Bank of Australia's latest meeting, the AUD/USD pair plummeted almost 200 pips despite hawkish decisions by the central bank. The regulator increased the interest rate by 25 points (i.e., to 3.60%) and simultaneously announced that the central bank will discuss further tightening of monetary policy. However, the formal results did not impress traders, while the rhetoric of the accompanying statement disappointed AUD/USD buyers. The RBA significantly softened the wording of the final communique. For example, the text of the February statement was very straightforward. The Central Bank then indicated that in the coming months, the regulator will need to further increase the interest rate "to ensure the return of inflation to the target level." While the March text of the accompanying statement looks completely different. In particular, the central bank refused to talk about future interest rate hikes and instead applied a more vague wording, noting only the need for further tightening of monetary policy. Such a verbal signal was interpreted by the market unambiguously—as a softening of the RBA's rhetoric. In addition, the Reserve Bank announced another important phrase—that inflation in Australia has reached its peak. Recall that the consumer price index in January fell sharply to 7.4%, with an estimate decline at 8.1%. At the same time, the RBA drew attention to the slowing growth of the Australian economy: according to the latest data, the volume of Australian GDP in Q4 2022 increased by only 0.5% against the forecast growth of 0.8%. In other words, the tone of the RBA's rhetoric was clearly "terminal." According to a number of currency strategists (in particular, Societe Generale), the Reserve Bank will announce a pause in rate hikes at the next (April) meeting. The Australian jobs report, which will be published Thursday, March 16, may play a certain role in this. Australian Jobs Report According to preliminary forecasts, the unemployment rate in Australia in February will decrease to 3.6% after a slight increase in January to 3.7%. The employment growth rate should enter positive territory (after two months of being below zero). According to forecasts, almost 50,000 jobs were created in February. The Australian consumer inflation estimates (a good indicator of current household inflation sentiment) is also expected on Thursday. According to forecasts, this indicator will again demonstrate a downward trend, reaching 4.9% (the lowest value since March last year). Conclusions Despite the upward corrective pullback, the downward trend for the AUD/USD pair is still in force. If the above macroeconomic reports come out in the "red zone," the Aussie will come under additional pressure, as the likelihood of a pause from the RBA will increase again. In general, the current dynamics of AUD/USD is indicative: the Aussie could not build on the success even against the background of the extremely weak positions of the greenback. All this suggests that as soon as the USD stabilizes (for example, if inflation in the United States starts to gain momentum again), the downward trend will resume, as the Aussie will not be able to pull the price up by itself. The technical picture tells the same. The pair on the daily chart is between the middle and lower lines of the Bollinger Bands indicator, as well as below all lines of the Ichimoku indicator (including the Kumo cloud). The main target of the downward movement in the medium term is the lower line of the Bollinger Bands indicator on the D1 timeframe, which corresponds to 0.6530.   Relevance up to 10:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337533