AUD/USD rebounds to upper 0.6800s in tandem with risk assets, still down substantially on the week

AUD/USD has rebounded into the upper 0.6800s, though remains on course for hefty on-the-week losses of over 2.5%.
Risk asset weakness plus China lockdown/growth concerns that have weighed on industrial commodities hit the Aussie hard this week.
Focus next week will be on Chinese data, the RBA minutes plus Australian Q1 WPI and labor market data.

Joel Frank Independent Analyst

The Aussie has staged a rebound on Friday in tandem with other recently hard-hit risk assets, though remains on course to post ugly on the week losses amid concerns about China lockdowns and amid associated recent downside in industrial commodity prices. AUD/USD is at present trading in the 0.6880s, higher by about 0.5% on the day after the pair hit its lowest levels since June 2020 on Thursday in the 0.6830 area.

However, the pair remains on course to end the week more than 2.5% lower, taking its losses in the last six weeks since it posted 2022 highs in the upper 0.7600s to more than 10%. Cities representing around 40% of China’s GDP, including Shanghai and Beijing, remain under some degree of Covid-19-related lockdown as of the end of this week, analysts said on Friday, warning in the same breath that upcoming Retail Sales and Industrial Production data this weekend will probably be ugly.

China also placed limits on unnecessary travel to and from the country this week. Against the backdrop of a weakening Chinese economy as it presses ahead with its zero-Covid-19 strategy and resultant harsh restrictions, it is probably too soon to bet on a rebound back into the 0.70s for AUD/USD.

A massive turnaround in the market’s appetite for risk might be enough to do it, but that also doesn’t seem likely, with the latest commentary from Fed Chair Jerome Powell on Thursday suggesting the Fed is as keen as ever to press ahead with monetary tightening in wake of this week’s hotter-than-forecast US inflation data. A rally back to the significant resistance area around 0.7000 (late 2021/early 2022 lows) likely remains a sell for many traders.

The minutes of the RBA’s last policy meeting where they surprised markets with a larger-than-expected 25 bps rate hike to 0.35% will be released on Monday, ahead of key Q1 Wage Price Index (WPI) data on Wednesday and April labour market figures on Thursday. While there will be plenty of focus on the outlook for RBA policy (more hikes expected) and the Australian economy (wage pressures likely building as the labour market tightens), this has not been a key driver of AUD/USD lately.

AUD/Usd

Overview
Today last price	0.6887
Today Daily Change	0.0031
Today Daily Change %	0.45
Today daily open	0.6856

Trends
Daily SMA20	0.7154
Daily SMA50	0.7313
Daily SMA100	0.7251
Daily SMA200	0.7273

Levels
Previous Daily High	0.6954
Previous Daily Low	0.6828
Previous Weekly High	0.7267
Previous Weekly Low	0.7029
Previous Monthly High	0.7662
Previous Monthly Low	0.7054
Daily Fibonacci 38.2%	0.6876
Daily Fibonacci 61.8%	0.6906
Daily Pivot Point S1	0.6805
Daily Pivot Point S2	0.6754
Daily Pivot Point S3	0.6679
Daily Pivot Point R1	0.693
Daily Pivot Point R2	0.7005
Daily Pivot Point R3	0.7056

Author

Joel Frank

Independent Analyst

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018, specialising in the coverage of how developments in the global economy impact financial asset

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

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.