Slobodan Drvenica
Windsor Brokers
AUD/USD
Australian dollar fell to new multi-month low in early Wednesday, after coming under increased pressure from risk aversion and slowdown in Chinese factory activity.
China’s manufacturing PMI fell to 48.8 in May vs 49.2 contraction in April and well below 51.4 forecast, with deeper drop below 50 level which divides growth from contraction, adding to worries about the pace of country’s post-pandemic recovery.
Australia’s inflation report, which was released simultaneously, showed that inflation unexpectedly rose to 6.8% in April vs 6.4% consensus, though slightly below 7.0% in March and add pressure to the central bank, raising prospects for further rate hikes, though positive impact on Aussie dollar from the report was minor and short-lived.
On the other hand, fresh hawkish comments from Fed policymakers, favoring continuation of policy tightening cycle and keeping high interest rates for some time, inflate US dollar.
The pair is on track for the fourth consecutive monthly loss that adds to negative outlook, as technical studies are firmly bearish on daily and weekly chart.
However, the price action may face increased headwinds in coming sessions as daily studies are oversold, with upticks likely to be limited as overall picture is bearish.
Broken Fibo 61.8% (0.6547), falling 10 DMA (0.6562) and weekly cloud base (0.6581) mark significant barriers which should cap upticks and keep larger bears in play for extension towards targets at 0.6403/0.6272 (Fibo 76.4% of 0.6170/0.7157 / Nov 11 trough).
Res: 0.6547; 0.6562; 0.6581; 0.6637.
Sup: 0.6451; 0.6403; 0.6386; 0.6272.
Interested in AUD/USD technicals? Check out the key levels
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
Recommended Content
Editors’ Picks
AUD/USD failed just ahead of the 200-day SMA
Finally, AUD/USD managed to break above the 0.6500 barrier on Wednesday, extending the weekly recovery, although its advance faltered just ahead of the 0.6530 region, where the key 200-day SMA sits.
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Bitcoin price could be primed for correction as bearish activity grows near $66K area
Bitcoin (BTC) price managed to maintain a northbound trajectory after the April 20 halving, despite bold assertions by analysts that the event would be a “sell the news” situation. However, after four days of strength, the tables could be turning as a dark cloud now hovers above BTC price.
Bank of Japan's predicament: The BOJ is trapped
In this special edition of TradeGATEHub Live Trading, we're joined by guest speaker Tavi @TaviCosta, who shares his insights on the Bank of Japan's current predicament, stating, 'The BOJ is Trapped.'