There is little market-moving data on offer in Asia today, so AUD action will be driven largely by sentiment and local bourses. Asian share markets are likely to trade with a negative bias following Wall Street’s sharp decline on Friday, driven by downbeat corporate earnings reports which highlighted the global economic slowdown and boosted USD demand.
AUD/USD traders are sitting on their hands in early Asia, now holding above the 1.0300 handle (last at 1.0315 vs. 1.0320). Price is trading between the 23.6% and 38.2% Fibonacci retracement levels of the advance from 0.9580 to 1.0620, at 1.0375 and 1.0225, respectively.
In the week ahead, apart from Wednesday’s release of key inflation data out of Australia (Q3 CPI), AUD/USD price action is expected to be driven largely by the direction of USD, hinging on U.S. economic data and on Thursday’s outcome of the first U.S. Federal Reserve meeting since launching QE3, the third round of the central bank’s quantitative easing program in September.