AUD/USD trends back below 200-hour moving average after strong sell-off


  • AUD/USD's upside correction meets heavy supply as US dollar firms on solid Retail Sales data.
  • US/Sino trade deal will bring some near-term stability to China’s trade outlook, potentially support AUD as a proxy. 
  • Chinese commitments (on trade) seem very ambitious, could be problematic down the line. 
  • Attention now turns to Aussie key economic data ahead of RBA Feb 4th meeting. 

AUD/USD has dropped back from the corrective highs of 0.6933 and lost the 0.69 handle today, printing a low of 0.6887 in recent trade, piercing the 200-hour moving average. The US dollar has firmed across the board on the back of solid Retail Sales data, bucking a negative run of domestic data of late. Retail Sales in the United States increased by 0.3% on a monthly basis in December, bang in line with market expectation and also matched the previous month’s upwardly revised reading.

Sino/US trade deal a step in the right direction, but ...

Yesterday, the ‘Phase-1’ trade agreement between the US and China was finally signed. The signing of the deal will bring some near-term stability to China’s trade outlook and financial markets. However, there are concerns that the Chinese have more obligations than the US and it is not a balanced agreement, potentially kicking up problems down the line. 

"The eight-chapter agreement outlines many pragmatic action points in several areas, while others remain vague. At the same time, issues such as 5G technology, cybersecurity and SOE subsidies have not been included in the current agreement and could be topics for further negotiations, if there are any," analysts at ANZ Bank argued. 

There are significant pledges by China and commitments (on trade) that seem very ambitious. "Above all, we argue that this agreement has created a temporary but unstable equilibrium; the deal could still collapse," analysts at Rabobank argued. 

RBA back in focus

Nevertheless, the CNY is higher and probably has some way to go yet should the consensus favour a positive outlook for the US and Chinese relation. Subsequently, what is positive for the yuan tends to be positive for the Aussie as well. However, the trade deal won’t help Australia recover from disastrous bushfires. The key focus will be with the Reserve Bank of Australia on the 4th Feb and the key domestic data leading up to it with jobs and the consumer a prime focus. Pricing for an RBA rate cut in Feb has edged back above 50%.

AUD/USD levels

AUD/USD

Overview
Today last price 0.6894
Today Daily Change -0.0011
Today Daily Change % -0.16
Today daily open 0.6905
 
Trends
Daily SMA20 0.693
Daily SMA50 0.6869
Daily SMA100 0.6838
Daily SMA200 0.6889
 
Levels
Previous Daily High 0.6918
Previous Daily Low 0.6877
Previous Weekly High 0.6959
Previous Weekly Low 0.6848
Previous Monthly High 0.7033
Previous Monthly Low 0.6762
Daily Fibonacci 38.2% 0.6902
Daily Fibonacci 61.8% 0.6893
Daily Pivot Point S1 0.6882
Daily Pivot Point S2 0.6859
Daily Pivot Point S3 0.6841
Daily Pivot Point R1 0.6923
Daily Pivot Point R2 0.6941
Daily Pivot Point R3 0.6964

 

 

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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD trims intraday gains returns to mid-1.17

The EUR/USD pair retreated after flirting with the 1.1800 figure, as the market mood somehow turned sour. Focus on the next US fiscal relief package, coronavirus, and economic progress.

EUR/USD News

GBP/USD approaches 1.3000 once again

GBP/USD is easing towards weekly lows as dollar bulls are giving it another try. Brexit concerns and UK lockdowns in the eye of the storm.

GBP/USD News

XAU/USD bull-bear tug-of-war extends around $1975

XAU/USD sidelined heading into the European session. Downside limited by dollar weakness, coronavirus concerns. Focus remains on the USD dynamics and the United States/China updates.

Gold News

What you need to know about trading in August

The generally received wisdom is that summer is a quiet month for trading. Traders are on holiday and markets quieten down. That’s the expectation among many. However, the reality is that August can be one of the most volatile trading months of the year.

Read more

WTI: Bulls await API data to attack $41.00

WTI struggles to extend recovery moves from $40.74 beyond $41.00. Virus woes join OPEC output increase to combat drop in Russian oil production. US Factory Orders, API inventories will be the key.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures