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AUD/USD pair eyes rebound after iron ore catches bid on 11th president’s comment -by Ecork

AUD, AUD/USD, Iron Ore, 11th Chief, Japanese CPI – Talking Points

  • The Australian dollar is falling against the US dollar as markets turn risk averse
  • The BRICS 2022 summit is scheduled to kick off today in a virtual format
  • AUD/USD looks set for further weakness above major trendline support

Asia Pacific forecast for Friday

Asia Pacific Markets It is set to open higher after a rosy night session on Wall Street. The New York trading session saw a rally in risky assets, with all three US stock indices posting gains. The Nasdaq -100 Index with a high beta (NDX) outperformed, and closed 1.47% higher. Bitcoin prices are up more than 3%, in line with the positive market sentiment. Traders were unmoved by the negative economic data, as the S&P Global PMI data for the US in June came in below estimates, although it remained in expansion territory.

However, the activity in the foreign exchange market has not kept pace with what the stock markets have been communicating with. The US dollar, which usually strengthens on risk aversion, has risen against risk-sensitive peers, such as the Australian dollar. The dollar’s strength was shown after the Treasury sellers disappeared in the middle of the day, pushing yields slightly higher.

The Japanese yen may see some volatility today following the release of Japanese inflation data for the month of May. Analysts expect to see core inflation — a measure that removes volatile food and energy prices — cross the wires at 2.1%, according to a Bloomberg survey. The Japanese yen is nearing its weakest level against the dollar since 2002. A higher-than-expected inflation reading may help support the strength of the Japanese yen, but the Bank of Japan has remained defiant against hawkish policy despite the massive collapse in its currency.

Elsewhere, industrial and precious metals prices have fallen. The growing threat of a global recession sent copper prices down more than 5% in New York. China’s sensitive iron ore prices were able to benefit from President Xi’s comments. The Chinese leader reiterated his commitment to support economic growth at the BRICS 2022 summit. The Australian dollar remains weak despite the iron ore rebound, but today traders may take note and put a bid on the Australian currency.

Highlights for June 24th:

  • Singapore – Industrial Production (May)
  • Taiwan – M2 Money Supply (May)
  • China – Current Account Final (Q1)
  • Australia – Reserve Bank of Australia Governor Lowe’s speech

Click here to view today’s full economic calendar

AUD/USD Technical Forecast

AUD/USD found support from a trendline formed from the October 2021 swing high. This trendline may continue to support prices, but a downside breakout is likely to test the May swing low. The psychologically important 0.7000 level remains a visible target for the bulls, should prices rebound. Meanwhile, the MACD oscillators and the RSI remain negative.

AUD/USD daily chart

The graph was created using TradingView

— By Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or Tweet embed on Twitter

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