AUD/USD: Bears eye 0.7600 as risk aversion extends into February

AUD/USD begins February with a gap-down after taking a U-turn from highest since March 2018 peak the previous month.
Gyrations in stocks, five-day lockdown in Perth and downbeat China PMIs favor sellers.
Second-tier data from Australia, China’s Caixin Manufacturing PMI will decorate the calendar in Asia.

Anil Panchal FXStreet

AUD/USD kick-starts February with a downside gap from 0.7641 to 0.7627, currently at 0.7624, as Monday’s trading begins in Asia. The risk barometer not only bears the burden of the recent trading woes, mainly emanating from equities, but coronavirus (COVID-19) headlines and soft data from China also weighed on the quote.

Perth on a five-day lockdown…

With a fresh covid case of a hotel worker renewing fears of a wider contagion, the Australian government announced a five-day activity restriction schedule in Perth. The move from Canberra recalled the bears that recently stepped back due to the increased pace of global vaccinations and reduction in infections in the UK, the US and Europe.

Elsewhere, China’s NBS Manufacturing PMI and Non-Manufacturing PMI for January came in weaker than expected. Details suggest that the headlines Manufacturing PMI eased below 51.6 forecast to 51.3 while Non-Manufacturing PMI dropped to 52.4 from 52.6 market consensus. Weakness in the official activity numbers seems to push Caixin Manufacturing PMI towards a softer reading than the 53.00 previous, expected 52.7, for January.

On a broader scale, last week’s equity traders’ frenzy seems to have alarmed market regulators and hence the risk-off is likely to extend. As per the latest report from Goldman Sachs, last week did show the largest hedge fund positioning 'de-grossing' since February 2009 and thus there is still ongoing risk of positioning-change-driven moves.

Against this backdrop, the Wall Street benchmark closed January on a negative note while the US 10-year Treasury yields rose 1.6 basis points (bps) to 1.071%. The same risk-off moves helped the US dollar index (DXY) to trim early Friday’s losses while closing the day with no major gains or losses.

Moving on, TD Securities Inflation for January, December’s Home Loans and ANZ Job Advertisements will be the readings to watch from Australia. Though, major attention will be given to China’s Caixin Manufacturing PMI for January. It should, however, be noted that the risk catalysts will keep the driver’s seat.

Technical analysis

A sustained downside break of six-week-old horizontal support, around 0.7640, directs AUD/USD sellers toward 50-day SMA, at 0.7600 now.

Additional impotant levels

Overview
Today last price	0.7624
Today Daily Change	-17 pips
Today Daily Change %	-0.22%
Today daily open	0.7641

Trends
Daily SMA20	0.7726
Daily SMA50	0.7593
Daily SMA100	0.7386
Daily SMA200	0.716

Levels
Previous Daily High	0.7705
Previous Daily Low	0.763
Previous Weekly High	0.7764
Previous Weekly Low	0.7592
Previous Monthly High	0.7743
Previous Monthly Low	0.7338
Daily Fibonacci 38.2%	0.7659
Daily Fibonacci 61.8%	0.7677
Daily Pivot Point S1	0.7613
Daily Pivot Point S2	0.7584
Daily Pivot Point S3	0.7538
Daily Pivot Point R1	0.7687
Daily Pivot Point R2	0.7733
Daily Pivot Point R3	0.7762

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

AUD/USD falls to near 0.7100 after slipping below 50-day EMA

AUD/USD depreciates after registering minor gains in the previous day, trading around 0.7120 during the Asian hours. The technical analysis of the daily chart shows the pair consolidating sideways within a rectangle pattern, as neither bulls nor bears gain control. The AUD/USD pair is holding a slight bearish tone however as it sits beneath both the nine-day and 50-day EMAs.

Japanese Yen edges up but remains close to the 160.00 intervention threshold

The Japanese Yen edges up against the US Dollar on Friday, but the USD/JPY pair remains above 159.90 at the time of writing, unable to put a significant distance from the 160.00 level, considered the limit of tolerable JPY weakness for Japanese authorities.

Gold returns to the red, awaits US NFP

Gold price is looking to test the weekly lows, while in the red near $4,450 in the early European session on Friday. The precious metal remains vulnerable amid ongoing geopolitical turmoil. Traders will closely monitor the developments surrounding the US-Iran peace deal and the US May employment report later on Friday.

Arthur Hayes' “Holy Trinity” is dead: Exits Zcash after Orchard Pool exploit

Arthur Hayes has entirely dumped his “Holy Trinity” holdings by offloading his Zcash holdings on Friday. The privacy coin is down 13% so far on Friday, extending Thursday’s 26% decline after an Orchard Shielded Pool audit revealed a critical vulnerability that allowed the undetectable minting of fake coins. Hayes continues to hold Worldcoin ahead of the upcoming SpaceX Initial Public Offering, on the chance of a “high-beta proxy” rally.

Nonfarm Payrolls set to show stable labor market in May as markets digest Fed hawkish shift

The United States Bureau of Labor Statistics will release the Nonfarm Payrolls data for May on Friday at 12:30 GMT. Investors expect NFP to rise by 85K following the surprisingly strong 185K and 115K increases recorded in March and April, respectively.

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.