- AUD/USD faces barriers to extending the weekly gains.
- China reports record Coronavirus cases, witnesses civil disobedience in Shanghai, Beijing.
- Prospects of Fed’s easy rate hikes favor Aussie pair buyers even as RBA’s lacks hawkish moves.
- Australia’s Retail Sales, Inflation data and comments from RBA Governor Lowe, Fed Chair Powell can entertain traders pre-NFP.
AUD/USD witnesses hardships in stretching the weekly gains beyond 0.6750 as it begins the key week on a back foot around 0.6720.
Coronavirus fears in China joined the protest against the government’s Zero-Covid policy to add to the market’s woes. Additionally, the Reserve Bank of Australia’s (RBA) mixed comments and the Aussie pair trader’s anxiety ahead of the key data/events also challenge the AUD/USD bulls. Even so, concerns surrounding easy rate hikes from the US Federal Reserve (Fed) allowed the pair buyers to remain hopeful ahead of crucial data and events.
China reported an all-time high of COVID-19 daily cases with nearly 40,000 new infections on Saturday. The dragon nation has been using the stringent policy to limit the virus spread but the outcome hasn’t been a positive one so far. On the contrary, a deadly fire in a building was allegedly linked to the virus-linked lockdown measures and resulted in mass protests in Beijing and Shanghai.
Also negative for the AUD/USD pair could be the downbeat China data publishing this weekend. China’s Industrial Profit dropped to -3.0% during the January to October period versus -2.3% marked for the January-September era. Additionally, the record high growth in the US Black Friday online shopping also acts as a negative barrier for the AUD/USD prices.
It’s worth noting that the prospect of the Fed’s slower pace of interest rate hikes weighed on the US Dollar the previous week even if the Reserve Bank of Australia (RBA) officials appeared not too hawkish. Also positive could be the People’s Bank of China’s (PBOC) cutting of the Reserve Requirement Ratio (RRR) by 25 basis points (bps) effective from December 5.
Looking forward, Australia’s Retail Sales for October, expected 0.4% versus 0.6% prior, will act as an immediate catalyst for the AUD/USD pair. However, major attention will be given to the risk catalysts like the Covid headlines and rate concerns ahead of the nation’s recently initiated monthly inflation data, comments from RBA Governor Philip Lowe and Fed Chair Jerome Powell, as well as Friday’s US employment report for November.
Technical analysis
Despite the latest struggle, a convergence of the 100-Day Moving Average (DMA) and an upward-sloping support line from November 04, around 0.6690, restricts the short-term AUD/USD downside.
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
Editors’ Picks
GBP/USD rises to near 1.2540, driven by higher UK GDP
GBP/USD edged higher to near 1.2540 during Asian hours on Friday, buoyed by the release of higher-than-expected UK Gross Domestic Product (GDP) data for the first quarter.
EUR/USD: The crucial resistance level will emerge at the 1.0790–1.0800 region
The EUR/USD pair trades on a softer note near 1.0775 during the early European hours on Friday. The downtick of the major pair is supported by the renewed US Dollar demand amid hawkish comments from Federal Reserve officials.
Gold price attracts some buyers despite hawkish Fedspeak
Gold price edges higher for the second consecutive day on Friday. Weak employment data bolstered the speculation that the weakening economy would force the Fed to cut rates.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Rate cut optimism fuelled by higher US jobless claims
With Federal Reserve policy acting as the primary driver of investor sentiment in 2024, renewed optimism surrounding the possibility of rate cuts has propelled the Dow to its most significant rally since December.