AUD/USD: Mildly positive after better than forecast Aussie NAB Business data
|- AUD/USD bounces off 100-day SMA but still remains below 21-day SMA.
- Australia’s NAB Business data marked upbeat readings for October.
- Risk-off regains market attention amid trade/political pessimism.
Despite upbeat readings of Australian business sentiment data, AUD/USD stay mildly on the bids around 0.6850 during early Tuesday.
October month Business Confidence and Business Conditions from National Bank of Australia (NAB) cross marked forecast for an unchanged reading of 0 and 2 to 2 and 3 respectively.
While better the forecast sentiment data helps the Aussie to bounce off 100-day SMA, trade/political tension keep recovery in check.
Recent updates from Hong Kong, via Reuters, suggest that police use Rubber Bullets to counter the protesters' tear gas firings. That said, the US official condemns the use of deadly force the latest protests, which in turn might push China to reiterate its call to the US to stay away from their domestic politics. As a result, deteriorating odds for the US-China trade deal could have an additional burden.
Elsewhere, market sentiment shrugs off speculations that the US President Donald Trump will drop tariffs on the European Union (EU) automobiles as well as upbeat conversations between the US and French leaders.
It’s worth mentioning that the US 10-year treasury yields shed nearly two basis points (bps) to 1.91% after the extended weekend stopped bond trading on Monday. Also, Wall Street marked mild losses and S&P 500 Futures follow the suit while portraying the market’s risk-off.
Given the initial reaction to the Aussie data, markets could continue looking for fresh clues from the US-China trade front and global politics amid a lack of major data/events up for publishing on the economic calendar during the Asian session. However, comments from the Federal Reserve (Fed) policymakers and the United States (US) President Donald Trump, at the Economic Club lunch in New York, will be the key to follow during the later part of the day.
Technical Analysis
Even if 100 and 21-day Simple Moving Averages (SMA) limit the pair’s immediate moves between 0.6847 and 0.6855 respectively, overall weakness in trade sentiment, coupled with failures to cross 200-day SMA level of 0.6944, could keep bears hopeful for 0.6800.
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