AUD/USD basks in improved risk sentiment


  • AUD/USD bulls move in on critical resistance territories. 
  • Risk appetite improves and supports the commodity complex. 

At 0.7300, AUD/USD is higher by 0.12% as it oscillates between 0.7290/7300 and just below the 21-day moving average. 

In New York, the dollar fell across the board on Thursday as improved risk sentiment in global financial markets wiped out its post-Federal reserve gains. On China's return from holidays, Beijing injected fresh cash into its financial system ahead of an $83.5 million bond coupon by embattled property giant Evergrande. This, in turn, has lifted commodity currencies, equities and sank the US dollar.

US dollar on the backfoot

The US dollar currency index, DXY, which measures the greenback against a basket of six rivals, is down 0.38% at the time of writing trading at 93.081 after making its biggest daily percentage drop in a month, engulfing the Fed day bullish daily candle.

However, in the 93 areas, DXY remains near the 10-month high touched in late August of 93.73. Meanwhile, the offshore Chinese yuan has also strengthened versus the greenback to 6.4587 which also offers support to the Australian dollar. 

The improved risk appetite was reflected in Wall Street's major equity indexes, with the S&P 500 making its largest two-day percentage gain since late July. On Wednesday, the Federal Reserve said it will likely begin tapering its monthly bond purchases as soon as November which initially dented stocks and risk appetite. However, markets on Thursday have run with the positive economic outlook in the Fed's forecasts instead and have cheered the conciliate words from Evergrande's spokespeople.

Evergrande has resolved one coupon payment on a Shenzhen-traded bond but was due to pay $83.5 million in interest on a $2 billion offshore bond on Thursday and also has a $47.5 million dollar-bond interest payment next week. There is a 30-day window to arrange the payments for which the company says it endeavours to settle. 

''Evergrande Chairman Hui Ka Yan urged his executives late on Wednesday to ensure the delivery of quality properties and the redemption of its wealth management products, which are typically held by millions of retail investors in China,'' Reuters reported. 

Overall, ''risks for the AUD seem to be improving, however, sentiment from Asian asset markets will remain key,'' analysts at ANZ Bank said in a note on Friday. 

AUD/USD technical analysis

 

Overview
Today last price 0.7299
Today Daily Change 0.0054
Today Daily Change % 0.75
Today daily open 0.7245
 
Trends
Daily SMA20 0.7332
Daily SMA50 0.7332
Daily SMA100 0.7492
Daily SMA200 0.76
 
Levels
Previous Daily High 0.7297
Previous Daily Low 0.7222
Previous Weekly High 0.7377
Previous Weekly Low 0.7262
Previous Monthly High 0.7427
Previous Monthly Low 0.7106
Daily Fibonacci 38.2% 0.7269
Daily Fibonacci 61.8% 0.7251
Daily Pivot Point S1 0.7213
Daily Pivot Point S2 0.718
Daily Pivot Point S3 0.7138
Daily Pivot Point R1 0.7287
Daily Pivot Point R2 0.7329
Daily Pivot Point R3 0.7362

 

 

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