Australian Dollar has retreated from 4-1/2 month highs
|AUD - Australian Dollar
In what was a volatile week for the Australian dollar having seen a range of 0.6800 and 0.6938 against the Greenback in just 3-days, this morning the AUD/USD pair has retreated and opens lower. Bloomberg had reported report that the US had reached a “phase-one” trade deal with China which suspended the planned US tariffs on around $160 billion worth of Chinese goods due to take effect on December 15. This coupled with weakness in the US dollar primarily on the back of an upsurge on the Pound, the AUD/USD touched highs of 0.6938 on Friday morning.
Sadly, the trade-deal news was not enough to keep the Aussie’s momentum and the sellers emerged in slightly overbought conditions as we went into the European and North-American trading sessions. This morning we open at 0.6873 and expect to see some volatility as we move through the last week before the holidays begin for most. We can expect to see initial support at 0.6830 and 0.6800 on the downside. On the topside, a sustained move above 0.6900 will indicate some buying activity and if there is enough upside momentum then look to a rally towards 0.6935 and 0.6970.
Key Movers
The UK Conservative party won the general election securing a landslide victory against the Labour party. The final numbers were 365 seats vs 203 seats which is the biggest win since Thatcher’s landslide in 1987. Jeremy Corbyn apologised for the defeat and said he will not be leading the party into another election. The GBP/USD surged from levels of around 1.3110 to a high of 1.3514 touching 18-month highs as Johnson’s deal is now likely to be passed in Parliament . The Pound did reverse about half of those gains and closed the week at 1.3330.
In other news, the we saw US Retail Sales numbers released on Friday, sales increased by 0.2% last month which were less than forecast of a 0.5% increase. Americans are cutting back on discretionary spending such as restaurant, bars and book stores.
Expected Ranges
AUD/USD: 0.6810 - 0.6930 ▼
GBP/AUD: 1.9050 - 1.9500 ▼
AUD/NZD: 1.0350 - 1.0500 ▼
AUD/EUR: 0.6120 - 0.6220 ▼
AUD/CAD: 0.9000 - 0.9100 ▼
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