AUD/USD struggles near weekly lows, just below 0.7100 handle

Haresh Menghani FXStreet

• The USD preserves the previous session’s upbeat US data-led gains.
• Bulls shrug off better than expected Chinese manufacturing PMI print.
• Traders now eye US economic docket for some meaningful opportunities.

The AUD/USD pair now seems to have entered a bearish consolidation phase and was seen consolidating in a narrow trading band near the lower end of its weekly trading range.

Having faced rejection near the 0.7200 handle earlier this week, the pair came under some additional selling pressure on Thursday following stronger than expected US economy, especially an unexpectedly stronger GDP growth figures.

The advance GDP estimate showed that the US economic growth stood at 2.6% annualized pace in the last quarter of 2018 and the Chicago PMI rose to a reading of 64.7 in February as compared to 56.7 in the previous month.

Upbeat US economic data triggered a fresh leg of an upsurge in the US Treasury bond yields, which provided a goodish lift to the US Dollar and eventually exerted some additional downward pressure on the major.

The China-proxy Australian Dollar held on the defensive and failed to gain any respite from Friday's release of better-than-expected Caixin China manufacturing PMI, which jumped to 49.9 in February from 48.3 in January.

Moving ahead, market participants now look forward to the US economic docket, highlighting ISM manufacturing PMI and revised UoM Consumer Sentiment index, for some fresh impetus on the last trading day of the week.

Technical levels to watch

Immediate support is pegged near the 0.7070 region, below which the pair is likely to accelerate the slide towards the 0.7050-40 intermediate support before eventually falling to the key 0.70 psychological mark. On the flip side, the 0.7130 region now seems to act as an immediate hurdle, which if cleared might assist the pair to make a fresh attempt towards conquering the 0.7200 handle.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Week ahead: US CPI, France’s budget crisis and Q3 earnings to set the market tone

The US dollar held relatively strong this week, despite the disappointing US jobs report on October 2, which further decreased the probability of a back-to-back rate hike by the Fed at the upcoming gathering on October 28.

CFTC Report: Euro and Aussie shorts expand amid diverging signals

The week in one sentence: Euro and Australian Dollar shorts deepened in the week to October 6, while Yen longs rebuilt. In addition, Coffee buying continued, and Gold exposure remained elevated despite another price decline. Speculators turned more negative on the Euro, increasing the net exposure to around 99.3K contracts.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?