AUD/USD: Focus is on the 10-year yield differential

• The Aussie dollar's recovery rally is falling apart as the 10-year yield differential is rising again in the USD-positive manner.
• The yield differential may revisit recent highs if the Fed policymakers, scheduled to speak this week, call for above-neutral interest rates.

The Aussie dollar is closely following the action in the spread between the US 10-year treasury yield and its Australian counterpart.

The spread topped out at 54 basis points on Oct. 31. Interestingly, the AUD picked up a strong bid on the following day and rose above 0.73 on Nov. 16. During the same time frame, the spread fell back to 35 basis points.

Further, the currency pair dived out of the rising trendline on Nov. 20, signaling the end of the corrective rally, as the spread began to rise again in favor of the USD. Notably, the spread has increased by eight basis points in the last seven days and could rise even further, pushing the AUD/USD lower, if the Fed officials reaffirm the gradual path of tightening and drop hints of an above-neutral interest rate policy.

Fed policymakers - Bostic, Evans, and George - are scheduled to speak today. Fed Chair Powell will take the center stage tomorrow, followed by the Fed minutes on Thursday.

AUD/USD Technical Levels

Overview:
Today Last Price: 0.7228
Today Daily change: -2.0 pips
Today Daily change %: -0.0277%
Today Daily Open: 0.723

Trends:
Previous Daily SMA20: 0.7225
Previous Daily SMA50: 0.7179
Previous Daily SMA100: 0.7248
Previous Daily SMA200: 0.7435

Levels:
Previous Daily High: 0.7278
Previous Daily Low: 0.7224
Previous Weekly High: 0.7327
Previous Weekly Low: 0.7202
Previous Monthly High: 0.724
Previous Monthly Low: 0.702
Previous Daily Fibonacci 38.2%: 0.7245
Previous Daily Fibonacci 61.8%: 0.7258
Previous Daily Pivot Point S1: 0.721
Previous Daily Pivot Point S2: 0.7191
Previous Daily Pivot Point S3: 0.7157
Previous Daily Pivot Point R1: 0.7264
Previous Daily Pivot Point R2: 0.7298
Previous Daily Pivot Point R3: 0.7317

Source: https://www.fxstreet.com/news/aud-usd-f ... 1811270351

The NZD is the strongest and the AUD is the weakest.

The USD mostly higher but the gains are limited
The North American morning snapshot is showing the NZD is the strongest while the AUD is the weakest in what has been limited trading ahead of the main action from the G20 meeting.


The ranges and changes are minimal (see chart below). Against the USD, the GBPUSD has the largest trading range at 65 pips. That is still well below its 22 day average of 127 pips. All the other pairs have ranges less than 48 pips (USDJPY has only traded in a 21 pip range and the NZDUSD only in a 20 pip range). The major cross currency pairs - including the often more volatile JPY crosses - are also well contained. With the weekend risk from the G20, it is not surprising that the markets are not moving much. However, there can be bouts of squaring up before the close that could solicit market reactions today and any comments will be scrutinized as well.


A snapshot of the other markets is showing:

• Spot gold down -$2.00 on the stronger dollar
• WTI crude oil futures are trading down $.75 or -1.46% at $50.72.. The low reached $50.31. The high extended to $51.79
• Bitcoin on Coinbase is trading lower again today. The price is down $-229 at $3951.59. The low reached $3869. The digital currency is trading back below its 200 hour moving average of $4056 and 100 hour moving average of $3989. Staying below each will keep the bears in control.

The US equity futures are implying a lower opening

• Dow industrial average, -100 points
• S&P, -7 points
• Nasdaq, -19 points

In Europe, shares are mostly lower:

• German DAX, -0.6%
• France's CAC, 0.3%
• UK FTSE, -0.7%
• Spain's Ibex, -0.28%
• Italy's FTSE MIB, unchanged

In the US debt market, the 2 year is up modestly. the 30 year is down -1.8 bps. The 2-10 euros for it is down to about 20 basis points as the market shifts the tightening bias of the Fed in 2019.

Source: https://www.forexlive.com/technical-ana ... t-20181130

AUDUSD stalls at yesterday's high. Rotates lower.

A gap to fill from the run higher over the weekend
The AUDUSD moved higher in the Asian session into the London session and in doing so retested the high from yesterday. The highs today stalled right at the level (at 0.73928). That is not encouraging for the buyers, and they have turned around and sold.


Now, on the downside, the price did gap higher on Monday, opening and moving away from the swing high from last week at 0.73437. The low this week has reached 0.73458. Filling that gap is a downside target. A move below that level will also look to get below the swing high from November 16 at 0.7337. The 100 hour MA is behind that at 0.73305

Source: https://www.forexlive.com/technical-ana ... r-20181204

AUDUSD: Value of put options (bearish bets) rises as Australia GDP growth slows sharply

The AUD/USD fell more than 50 pips earlier today after the ABS reported a sharp slowdown in Australia's growth rate in the September quarter.

Further, the dismal GDP reading seems to have put a bid under the AUD puts. This is evident from the drop in the one-month 25 delta risk reversals (AUD1MRR) to one-week low of -0.825 from yesterday's level of -0.70.

The negative number indicates the implied volatility premium or demand for the AUD puts is higher than that for calls. So, a drop from -0.70 to -0.825 indicates the demand or value for put options has increased today.

Simply put, the investors are adding bets to position for a weakness in the AUD.

AUD1MRR
Source: https://www.fxstreet.com/news/aud-usd-v ... 1812050412

Technical Analysis: Aussie getting ready for the drop to 0.7200 figure

AUDUSD Daily Chart
AUD/USD is trading in a bear trend below the 200-day simple moving average (SMA) as the market is dropping below the 0.7400 and 0.7300 figures.
AUDUSD 4 Hour Chart
The Aussie broke below the 0.7300 as well as the 50 and 100 SMAs suggesting potential weakness in the coming sessions.
Technical indicators have also turned bearish
AUDUSD 30 Min Chart
On lower time-frames, the market is set to retest 0.7300 and then potentially drop to 0.7200 figure.
Additional key levels

Overview:
Today Last Price: 0.7269
Today Daily change: -67 pips
Today Daily change %: -0.913%
Today Daily Open: 0.7336

Trends:
Previous Daily SMA20: 0.7267
Previous Daily SMA50: 0.7184
Previous Daily SMA100: 0.7242
Previous Daily SMA200: 0.7419

Levels:
Previous Daily High: 0.7394
Previous Daily Low: 0.7326
Previous Weekly High: 0.7345
Previous Weekly Low: 0.7199
Previous Monthly High: 0.7345
Previous Monthly Low: 0.7072
Previous Daily Fibonacci 38.2%: 0.7352
Previous Daily Fibonacci 61.8%: 0.7368
Previous Daily Pivot Point S1: 0.731
Previous Daily Pivot Point S2: 0.7284
Previous Daily Pivot Point S3: 0.7242
Previous Daily Pivot Point R1: 0.7378
Previous Daily Pivot Point R2: 0.742
Previous Daily Pivot Point R3: 0.7446

Source: https://www.fxstreet.com/news/aud-usd-t ... 1812051733

AUDUSD moves back higher to test 100 day MA

Should expect sellers near the area as a battle between buyers and sellers define their levels.


The traders in the AUDUSD are in the midst of a battle.

On the downside the price low today breached below the double bottom at 0.7198, but could only reach 0.71906 before running out of steam and rebounding
On the topside, the fall today took the price below its 100 day MA at 0.72362. The price correction off the low reached 0.72324
We currently trade at 0.7215 between the two extremes. The battle is on.

Source: https://www.forexlive.com/technical-ana ... a-20181206

AUD/USD Forecast December 10-14 – Trade giveth, trade and Australian GDP taketh away

The Australian dollar hit new highs when the US and China seemingly made significant progress but dropped back with the reality. What’s next? The upcoming week features a mix of Australian and Chinese events. Here are the highlights of the week and an updated technical analysis for AUD/USD.

China, Australia’s No. 1 trade partner, agreed on a trade truce with the US in the Xi-Trump meeting in Buenos Aires. However, there were differences between the versions coming out of Washington and Beijing. Moreover, the arrest of Huawei’s CFO Meng weighed heavily on the mood. Australian data did not help. GDP increased by only 0.3% q/q in Q3, half the expectations. The RBA hardly changed its statement in its last rate decision for the next two months but may need to downgrade its assessments if the data continue disappointing.

AUD/USD daily graph with support and resistance lines on it. Click to enlarge:

• Christopher Kent talks: Sunday, 21:35. The Assistant Governor at the RBA will speak in Sydney at the wake of the new week and will have an opportunity to comment on the weak GDP data and the path of monetary policy.
• Home Loans: Monday, 00:30. After many years of a housing boom, things are slowing down, especially in Sydney. Home loans dropped by 1% in September. A slide of 0.5% is projected for October.
• HPI: Tuesday, 00:30. The House Price Index dropped in the past two quarters, both by 0.7%. No respite is due now, as expectations stand at an even greater decline, of 1.5% in Q3 2018.
• NAB Business Confidence: Tuesday, 00:30. The National Australia Bank’s monthly survey of around 350 businesses dropped to 4 points in October, at the lower end of the range that was seen in recent months. A similar score is likely for October.
• Westpac Consumer Sentiment: Tuesday, 23:30. The Westpac-Melbourne Institute Consumer Sentiment showed an increase of 2.8% in sentiment in November, a significant improvement in this volatile indicator. The survey of 1,200 consumers may drop now.
• MI Inflation Expectations: Thursday, 00:00. Australia publishes official inflation numbers only once per quarter. This monthly gauge by the Melbourne Institute fills the gap. Inflation expectations dropped to 3.6% in October after 4% in the previous three months. Another drop will indicate a slowing economy in addition to slower price rises.
• RBA Bulletin: Thursday, 00:30. The RBA publishes this quarterly in-depth report about the current and future economic conditions. Some of the data is already out, limiting the impact, but surprises cannot be ruled out.
• Chinese Industrial Production: Friday, 2:00. The world’s second-largest economy has seen a slight slowdown in the pace of growth. Output increased by 5.9% y/y in October and a repeat of the same annual growth rate is projected for November.
  *All times are GMT

AUD/USD Technical Analysis

Aussie/USD kicked off the week with a massive weekend gap and nearly reached 0.74 before falling sharply to just below 0.72.

Technical lines from top to bottom:

0.7480 capped the pair in mid-July and defends the round 0.75 level. 0.74 was the high point reached the pair reached at the wake of December. The next line to watch is 0.7340 that the Aussie hit in late November.

0.7315 was a swing high seen in late September and it remains relevant. Further down, 0.7240 separated ranges in September and in October. 0.7190 was a low point in early December.

Lower, 0.7165 was a swing low after a recovery in mid-November. 0.7085 was a low point in September.

The round number of 0.70 is closely watched by many market participants. Close by, 0.6970 played a role back in January 2017. Below, the only noteworthy level is only 0.6825 that supported the pair in late 2016 and early 2017.

I am bearish on AUD/USD

The global economy is slowing down and so is Australia. Contrary to what the RBA has said, it is more likely to see interest rates falling rather than rising in Australia. And in the US, things are going in the opposite direction.

Source: https://www.forexcrunch.com/aud-usd-for ... keth-away/

AUD/USD downside break beckons as sellers continue to defend 100-day moving average

Sellers remain in control of the pair this week
Call it a timely coincidence but the negative shift in risk sentiment today couldn't come at a better time for AUD/USD sellers. Price has been knocking on the door of the 100-day MA (red line) over the past three days but ultimately, buyers appear to have encountered failure to break above that - barring any miraculous turnaround in risk sentiment later in the day.

Price is now heading back towards a test of the December low @ 0.7172 but more importantly the technical support from the 13 November low @ 0.7164. A break below the latter will see price extend a move back downwards towards 0.7100 and possibly the year's lows once again.

Right now, sellers are in control on both the daily and hourly charts, and with fundamentals also supportive of a move lower today i.e. risk-off sentiment, this could be the needed push for sellers to drive a break to the downside. Again, for that to happen watch out for the 13 November low @ 0.7164.

As for buyers, it's all about getting back above the 100-day MA @ 0.7227 in order to get a reprieve from the recent downside pressure.

The key risk event for the pair later today will be the US November retail sales data, but that aside, it's all about risk sentiment as we close out the week.

Sources: https://www.forexlive.com/technical-ana ... e-20181214 & https://Money.net

Watch out for stops in AUD/USD

The Australian dollar is in danger of falling to a fresh cycle low. A drop below 0.7021 would take out the October low and mark the worst level since February 2016.


The low so far is 0.7024, so we're dangerously close to a breakdown and it will be coming at a tough time of year for liquidity. The 46 point drop in the S&P 500 isn't helping and neither is talk of USD-positive rebalancing flows.

Update: It's broken down to 0.7019. There are no stops yet but watch closely.

Source: https://www.forexlive.com/technical-ana ... w-20181227

AUD/USD jumps to 0.71 as greenback erases NFP-led gains after Powell comments

• Powell said Fed will reassess strategy if downside risks increase.
• US Dollar Index pares gains, falls toward 96.
  December NFP growth beats estimates by a wide margin.

After turning negative on the day near 0.7020 following the strong employment data from the United States, the AUD/USD pair rose sharply in the last hour as the greenback came under heavy selling pressure on FOMC Chairman relatively dovish comments. The pair, which touched its highest level since December 21 at 0.7110, was last seen trading at 0.7095, adding 1.3% on a daily basis.

Earlier today, the U.S. Bureau of Labor Statistics reported that nonfarm payrolls increased by 312K in December and the annual wage inflation rose to 3.2% with both data surpassing analysts' estimates. With the initial market reaction, the US Dollar Index quickly retraced its daily fall and rose to 96.60. However, FOMC Chairman Powell comments forced the index, which is now down 0.1% on the day at 96.17, to reverse its course.

Speaking in a conference in Atlanta, Fed chief Powell said that they were ready to adjust the monetary policy if data suggested that downside risks were increasing and added that they could use all the tools as appropriate in a future crisis.

Additionally, the strong upsurge witnessed in major equity indexes in the U.S. help risk-sensitive currencies outperform their rivals in the last session of the first week of 2019.

Technical levels to consider
The pair could encounter the initial resistance at 0.7110 (daily high) ahead of 0.7150 (Dec. 20, 2018, high) and 0.7200 (Dec. 28 high). On the downside, supports are located at 0.7040 (7-DMA), 0.7000 (psychological level) and 0.6920 (Jan. 3 low).

Source: https://www.fxstreet.com/news/aud-usd-j ... 1901041635