Markets are off to a relatively quiet trading start to the historically low-volatility week between Christmas and New Year’s. As of writing, European equities are trading down slightly (with the exception of the UK’s FTSE index, which is holding on to negligible gains), the dollar is essentially flat, and major commodities including gold and oil are falling once again.
Against this backdrop, the AUD/USD’s flat start to the week is relatively impressive. The Aussie traded higher every single day last week after finding support at its rising bullish trend line, keeping the cautiously optimistic outlook for 2016 in play. Meanwhile, both the MACD and RSI indicators remain in bullish territory, bolstering the case for further gains as we flip our calendars to 2016.
Not surprisingly, there are few major economic data releases scheduled but there are a few reports to keep an eye on. Out of the US, traders will look forward to tomorrow’s Consumer Confidence report, which will cover the critical holiday shopping period, along with Wednesday’s November Pending Home Sales report and Thursday’s release of initial unemployment claims and Chicago PMI. While the economic calendar is completely barren Down Under, Thursday’s PMI reports out of China will shed some light on how Australia’s largest trading partner is doing and could therefore have a notable impact on AUD/USD.
Amidst the current low liquidity conditions, the next 100 pip move in AUD/USD will be difficult to judge, but the medium-term bias will remain in favor of the bulls as long as rising trend line support around .7120 holds. Therefore, bulls may look to fade a near-term dip if seen, with the potential for an eventual move up to key previous resistance and the 200-day MA, in the .7380-.7400 range.
This research is for informational purposes and should not be construed as personal advice. Trading any financial market involves risk. Trading on leverage involves risk of losses greater than deposits.
Recommended Content
Editors’ Picks
EUR/USD holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays firm above 156.00 after BoJ Governor Ueda's comments
USD/JPY stays firm above 156.00 after surging above this level on the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.