AUD/USD on-guard with key RBA speakers this week and trade deal sentiment


  • AUD/USD is a toss-up between the dovish RBA and positive trade deal headlines.
  • Technical indicators in the mentioned chart have pared their declines.

AUD/USD ended on Friday around where it started the day, around 0.6780 and had ranged between a high of 0.6803 and 0.6780. The US dollar was firm into the close in New York and took out the positives that came from bullish trade deal headlines. 

Financial markets were more buoyed going into the weekend as investors weighed the series of positive manufacturing data as the week drew to a close, indicating to markets that the sluggishness in global manufacturing may have started to peter out. 

US data improves and boosts the dollar

Markit US PMI figures rebounded and bat expectations for November. US Manufacturing PMI climbed from October's 51.3 to 52.2 in November, which was a seven month high and the third successive rise in the index. Meanwhile, the composite and services PMI data also impressed by rising to 51.9 and 51.6 respectively. The data boosted the US dollar which moved higher across the board of major currencies. The DXY ended Friday + 0.31% and cruised through 98 the figure to score a high of 98.31 vs a low of 97.84. 

Conflicting trade deal headlines keep AUD under pressure

Meanwhile, the Aussie has been caught in the crossfire of conflicting news flows around the Sino-American trade negotiations. However, the latest developments are a touch more positive and perhaps that US dollar can give back some ground to allow AUD/USD to penetrate into the slightly more bullish territory at the start of this week – The confluence of the 21-day and 50-day moving averages is located just through 0.68 the figure at 0.6830 as a compelling target for the bulls. President Donald Trump said a 'phase-one deal is 'potentially very close' and if it had not been for positive US data, the Aussie would have surely found some traction on such headlines. 

A case for the downside on dovish RBA

On the other hand, the Aussie will have a hard time of upside conviction in the wake of the latest jobs report which only goes to support speculations that the Reserve Bank of Australia will be back to cutting rates in the months ahead - 'Currently, the OIS curve is displaying a 21% implied probability of a cut in December and a 62% in the following meeting in February," analysts at ING Bank explained, noting  two scheduled RBA speakers next week:

"First, Deputy Governor Debelle will give a speech about the labour market (a hot topic, given recent upward dynamics in unemployment), on Tuesday (Monday night GMT). The following day, Governor Lowe will discuss unconventional monetary policy at a dinner in Sydney," adding, "Market’s high sensitivity to this prospect suggests we may see speculation about more RBA easing mounting next week, which should keep AUD below 0.68, barring any major breakthrough in trade negotiations."

AUD/USD levels

"The AUD/USD pair is bearish according to the daily chart, as selling interest surged on an approach to a bearish 100 DMA, which capped the upside throughout the week," Valeria Bednarik, the Chief analyst at FXStreet explained:

"Technical indicators in the mentioned chart have pared their declines, but remain well into negative territory, in line with further slides ahead. Shorter-term, and according to the 4-hour chart, the risk is also skewed to the downside as a bearish 20 SMA contained advances, while technical indicators hold directionless within negative levels."

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD slides to 1.0650 amid strong USD, dovish ECB commentary

EUR/USD slides to 1.0650 amid strong USD, dovish ECB commentary

EUR/USD is falling further to test 1.0650 after dovish commentary from the ECB policymaker Stournaras weighed on the Euro. Divergent ECB-Fed policy outlooks keep the US Dollar strongly bid ahead of the US sentiment data and Fedspeak. 

EUR/USD News

GBP/USD extends decline below 1.2500 on sustained USD strength

GBP/USD extends decline below 1.2500 on sustained USD strength

GBP/USD extends losses below 1.2500, struggling even after the January month UK GDP was revised higher to 0.3% while the UK industrial sector showed robust growth. Resurgent US Dollar demand and geopolitical tensions keep the pair undermined. 

GBP/USD News

Gold price taps on $2,400 for the first time on record

Gold price taps on $2,400 for the first time on record

Gold price tests $2,400 for the first time on record, scaling new lifetime highs amid persistent geopolitical tensions. The upsurge seems unaffected by reduced Fed rate cut bets and bullish USD. Extremely overbought conditions might prompt some profit-taking around the metal.

 

Gold News

Robert Kiyosaki steers clear from ETFs, opts for holding Bitcoin directly instead

Robert Kiyosaki steers clear from ETFs, opts for holding Bitcoin directly instead

Rich Dad Poor Dad author Robert Kiyosaki says he will not buy Bitcoin ETFs. Kiyosaki stated his dislike for Wall Street’s financial products and preferred packaging his own. 

Read more

US banks in focus, as earnings season gets underway

US banks in focus, as earnings season gets underway

Today sees the big banks kick off earnings season in the US, with JP Morgan Chase, Wells Fargo, Blackrock, Citigroup, and State Street all reporting before the bell.

Read more

Forex MAJORS

Cryptocurrencies

Signatures