AUD/USD drops to fresh daily lows near 0.6730 as DXY climbs to multi-month highs

Australia's trade surplus narrowed more than expected in December.
US Dollar Index rose to its highest level since mid-October.
Coming up: RBA Governor Lowe speech and AiG's Performance of Services Index.

Eren Sengezer FXStreet

The AUD/USD pair posted decisive gains during the first half of the week on the back of the Reserve Bank of Australia's (RBA) optimistic tone and some upbeat macroeconomic data releases from Australia but struggled to push higher on Thursday. With the broad-based USD strength dominating the markets, the pair retraced a portion of its rally and was last down 0.12% on the day at 0.6736.

Earlier in the day, the Australian Bureau of Statistics reported that the trade surplus in December narrowed 5.2 billion AUD to cap the pair's upside. Furthermore, the National Australia Bank's Business Confidence Index in the fourth quarter stayed unchanged at -1 to miss the market expectation of 3.

In the early trading hours of the Asian session, RBA Governor Lowe will be delivering a speech and the AiG will publish its Performance of Services Index.

USD preserves strength ahead of NFP

On the other hand, the US Dollar Index on Thursday advanced to its highest level since the second week of October at 98.57 to further weigh on the pair. Dallas Fed President Kaplan said that the coronavirus outbreak was unlikely to impact the Federal Reserve's policy stance and reiterated that he was expecting the policy rate to remain unchanged throughout 2020.

Additionally, the US Bureau of Labor Statistics reported that the Nonfarm Labor Productivity in the fourth quarter improved to +1.4% from -0.2% and Unit Labor Costs rose 1.4% as expected. As of writing, the index was up 0.2% on the day at 98.45.

Nonfarm Payrolls (NFP) report on Friday will be the last significant catalyst of the week for the greenback.

Technical levels to watch for

AUD/USD

Overview
Today last price	0.6741
Today Daily Change	-0.0004
Today Daily Change %	-0.06
Today daily open	0.6745

Trends
Daily SMA20	0.6817
Daily SMA50	0.6862
Daily SMA100	0.6834
Daily SMA200	0.6866

Levels
Previous Daily High	0.6775
Previous Daily Low	0.6723
Previous Weekly High	0.6829
Previous Weekly Low	0.6682
Previous Monthly High	0.704
Previous Monthly Low	0.6682
Daily Fibonacci 38.2%	0.6755
Daily Fibonacci 61.8%	0.6743
Daily Pivot Point S1	0.672
Daily Pivot Point S2	0.6696
Daily Pivot Point S3	0.6668
Daily Pivot Point R1	0.6772
Daily Pivot Point R2	0.68
Daily Pivot Point R3	0.6824

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

GBP/USD weakens to two-week lows near 1.3520

GBP/USD trades on the back foot, returning to the low 1.3500s, or two-week troughs, on Tuesday. Cable’s bearish price action follows decent gains in the Greenback at the time when investors assess latest US data releases and the persistent uncertainty in the US-Iran crisis.

EUR/USD remains offered; breaks below 1.1600

EUR/USD now accelerates its daily correction, breaching below the key 1.1600 support level on Tuesday. The pair’s daily correction comes on the back of a decent bounce in the US Dollar despite disappointing US data releases and amid persistent geopolitical concerns.

No reaction from Gold; still targets $4,300

Gold extends Monday’s pessimism and slipped back to nearly three-week lows just above the $4,300 mark per troy ounce on Tuesday. The US Dollar’s rebound couple with rising US Treasury yields weigh on the precious metal despite tensions in the Middle East appear far from abated.

Crypto Today: Bitcoin, Ethereum, XRP struggle to extend gains despite ETF inflows

Bitcoin stalls while holding above $78,000 support as ETF inflows return. Ethereum takes a breather around $2,450 amid sustained institutional support. XRP remains pressured as the 200-day EMA provides immediate support.

Global bond market sell off haunts markets

Global sovereign bonds are selling off as we start a new month. The UK is, unsurprisingly, taking the biggest hit. Two and 10-year yields rose by 10 basis points at one point on Tuesday, and are currently higher by 7 and 8bps respectively.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.