- AUD/USD fades corrective pullback from intraday low of 0.7288.
- RBA’s Lowe suggests keeping strong trade ties with China.
- Aussie Wage Price Index eyed for immediate direction.
AUD/USD seesaws near 0.7300, recently declining to 0.7295, during Wednesday’s Asian session. The pair recently reacted to RBA Governor Philip Lowe’s comments while printing a two-day losing streak. In doing so, the quote also respects sluggish risk-tone amid the coronavirus (COVID-19) woes.
RBA’s Lowe praises bond-buying, touches Canberra-Beijing tension…
In addition to highlighting the importance of Chinese markets for Australia, RBA Governor Lowe also mentioned, “It’s completely right for the government to borrow to support the economy right now.” This justifies the RBA’s recent Quantitative Easing (QE) measures as well as the government stimulus. Recently, New South Wales outlined an extensive program of expenditure and tax cuts for 2020-21 worth about AUD15bn or 0.8% of GDP. This comes in addition to the AUD160bn of stimulus from the federal government, per the Australia and New Zealand Banking Group.
Read: RBA's Lowe: Australia needs to keep strong trade relationship with China
Risk-tone remains sluggish as fears that the virus is pushing Tokyo towards the highest alert level join the previous pessimism concerning European and the US economy due to the pandemic.
That said, S&P 500 Futures takes rounds to 3,600 whereas Tokyo opens with over 0.75% losses by the Nikkei 225.
Aussie Wage Price Index for the third quarter (Q3), expected to remain unchanged at 0.2% QoQ, can offer immediate direction to the pair. Though, virus updates and vaccine news become the key to watch.
Technical analysis
The 0.7340/45 area, comprising multiple tops since early September, holds the key to AUD/USD upside towards the August 31 high near 0.7415. Meanwhile, an ascending trend line from November 02, at 0.7294 now, offers immediate support ahead of Friday’s low near 0.7220. It should, however, be noted that a break of 0.7220 will confirm “double-top” and can attack the 100-day SMA near 0.7160 during the further weakness.
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
AUD/USD remains under pressure above 0.6400
AUD/USD managed to regain some composure and rebounded markedly from Tuesday’s YTD lows in the sub-0.6400 region ahead of the release of the Australian labour market report on Thursday.
EUR/USD faces decent contention around 1.0600
The knee-jerk in the Greenback reignited some buying interest in the risk complex and pushed EUR/USD to three-day highs near 1.0680, rapidly leaving behind the recent yearly low around 1.0600.
Gold eases despite risk-off mood
Gold trades in a relatively tight range near $2,390 in the second half of the day on Wednesday. In the absence of high-tier data releases, investors keep a close eye on headlines surrounding the Iran-Israel conflict.
Ethereum trades around the $3,000 support following a surge in validator queue
Ethereum (ETH) continued a sideways movement on Wednesday as investors seemed to be waiting for an upward or downward price catalyst. Despite the price stagnancy, the ETH validator queue - possibly fueled by the DeFi restaking boom - rose sharply.
Markets stabilize after Powell rules out rate hike, but the signs don’t look good
Markets are volatile right now; however, a relative calm has descended on the market and US. US stocks are down a touch, but the Vix is lower, US Treasury yields are lower, and the dollar is mostly lower vs. its G10 FX counterparts.