AUD/USD finds itself at a 13-month low after suffering its worst week in 19. Strong US data has propelled the USD higher while the Aussie also continues to track the Chinese yuan lower. A break of a key trendline from the 2022 low seems probable.
By : Matt Simpson, Market Analyst
Last week’s GDP figures have certainly rekindled hopes of an RBA cut. Or to be exact, three cuts. By Friday’s close, three 25bp cuts were fully priced into the RBA’s cash rate futures curve. The first is estimated to arrive in April, followed by another two in April and December. The RBA’s cash rate curve estimates just a 9% chance of a cut on Tuesday.
Click the website link below to get our Guide to central banks and interest rates in Q4 2024.
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See the expectations for the Fed, ECB, and BOJ...and more importantly, what could drive monetary policy in Q4 and beyond!
The annual rate of GDP fell to a 4-year low of 0.8% and the quarterly read of 0.3% was below the 0.5% estimated. It will be interesting to hear if the RBA acknowledges the soft GDP figures at their meeting on Tuesday, even though the RBA is expected to hold rates at 4.35%.
But, considering the RBA’s cautious approach in general, they’ll likely retain their slight hawkish bias anyway. Besides, they’ll want to see Thursday’s employment figures, and of course the quarterly inflation figures in January before publicly entertaining the thought of a cut.
Employment data remains robust overall, and business confidence from NAB (to be released on Tuesday) reached a 2-year high last month. I do not think the three cuts priced in next year are a slam dunk. Especially if US inflation ticks higher this week, and Trump’s policies turn out to be as inflationary as originally feared next year.
Click the website link below to get our exclusive Guide to AUD/USD trading in Q4 2024.
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If the RBA is able to stick to its plan and keep monetary policy unchanged, AUD/USD may stick to its bullish seasonal trend in Q4, though volatility could increase.
The Australian dollar printed its lowest weekly close in thirteen months, during its most bearish week in 19. Support was found at the October 2022 trendline, but with the daily bearish trend accelerating away from its 20-day EMA, it seems likely we’ll see a break beneath it. Especially with USD/CNH considering a break above 7.3.
AUD/USD likely favours bears seeking to fade into rallies, in anticipation of a break of the 2022 trendline and August low as it heads towards 63c. Which sits conveniently by the lower 1-week implied volatility band.
– Written by Matt Simpson
Follow Matt on Twitter u/cLeverEdge
forex.com
AUD/USD finds itself at a 13-month low after suffering its worst week in 19. Strong US data has propelled the USD higher while the Aussie also continues to track the Chinese yuan lower. A break of a key trendline from the 2022 low seems probable.
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
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By : Matt Simpson, Market Analyst
- The RBA is expected to hold rates at 4.35% on Tuesday
- Although three 25bp cuts have been fully priced in by December, following soft Q3 GDP data
- The Australian dollar was the weakest FX major last week and down against all major currencies
- AUD/USD saw its lowest weekly close in 13 months during its worst week in 19
Last week’s GDP figures have certainly rekindled hopes of an RBA cut. Or to be exact, three cuts. By Friday’s close, three 25bp cuts were fully priced into the RBA’s cash rate futures curve. The first is estimated to arrive in April, followed by another two in April and December. The RBA’s cash rate curve estimates just a 9% chance of a cut on Tuesday.
Click the website link below to get our Guide to central banks and interest rates in Q4 2024.
Central Banks Q4 2024 Market Outlook - FOREX.com US
See the expectations for the Fed, ECB, and BOJ...and more importantly, what could drive monetary policy in Q4 and beyond!
The annual rate of GDP fell to a 4-year low of 0.8% and the quarterly read of 0.3% was below the 0.5% estimated. It will be interesting to hear if the RBA acknowledges the soft GDP figures at their meeting on Tuesday, even though the RBA is expected to hold rates at 4.35%.
But, considering the RBA’s cautious approach in general, they’ll likely retain their slight hawkish bias anyway. Besides, they’ll want to see Thursday’s employment figures, and of course the quarterly inflation figures in January before publicly entertaining the thought of a cut.
Employment data remains robust overall, and business confidence from NAB (to be released on Tuesday) reached a 2-year high last month. I do not think the three cuts priced in next year are a slam dunk. Especially if US inflation ticks higher this week, and Trump’s policies turn out to be as inflationary as originally feared next year.
AUD/USD futures – market positioning from the COT report:
- Asset managers increased net-short exposure to AUD/USD futures by 8.4k contracts
- Large speculators decreased net-long exposure by -10.4k contracts
- That’s a bearish shift of ~19k contracts
- Both sets of trades increased gross shorts and trimmed longs
Click the website link below to get our exclusive Guide to AUD/USD trading in Q4 2024.
AUD USD Q4 2024 Market Outlook - FOREX.com US
If the RBA is able to stick to its plan and keep monetary policy unchanged, AUD/USD may stick to its bullish seasonal trend in Q4, though volatility could increase.
AUD/USD technical analysis
The Australian dollar printed its lowest weekly close in thirteen months, during its most bearish week in 19. Support was found at the October 2022 trendline, but with the daily bearish trend accelerating away from its 20-day EMA, it seems likely we’ll see a break beneath it. Especially with USD/CNH considering a break above 7.3.
AUD/USD likely favours bears seeking to fade into rallies, in anticipation of a break of the 2022 trendline and August low as it heads towards 63c. Which sits conveniently by the lower 1-week implied volatility band.
– Written by Matt Simpson
Follow Matt on Twitter u/cLeverEdge
AUD/USD weekly outlook: RBA, AU jobs, US CPI on tap
AUD/USD finds itself at a 13-month low after suffering its worst week in 19. Strong US data has propelled the USD higher while the Aussie also continues to track the Chinese yuan lower. A break of a key trendline from the 2022 low seems probable.
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
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