AUDUSD – Still Pressured by Global Risks

AUDUSD, Day

The Australian S&P/ASX 200 stock index rose 0.57% today at 7,333, led by bank stocks. This comes after reports from the RBA showed that Australia’s economy has recovered rapidly after the delta outbreak as a result of accelerating vaccination including various assistance measures. The central bank said the omicron strain was unlikely to affect recovery and has called for people to stop panicking and learn to live with it. That’s why the central bank won’t raise interest rates until wage growth is stronger. Meanwhile, there are three options for a QE cut: one starting mid-February purchasing cuts and ending the program last month. Two, cut purchases and then reviewed again in May. Third, halt all purchases.

In December, the AUD performed well against other community currencies such as NZD and CAD, but it struggled against safe haven currencies such as USD, JPY and CHF as the world continues to struggle. Concerned about the instability of omicron virus including the Fed’s QE reduction is another factor that puts pressure on other major currencies.

Technically speaking, the AUDUSD pair is bearish after breaking up from the yearly low at 0.7000 with the overall price biased downward, the MACD is still below the 0 line and the RSI is at 42. Therefore, if the price breaks the first support 0.7080, we may see the price test the yearly low of 0.7000 again. Conversely, if the price is able to rise above the 0.7220 resistance, there will still be the next key resistance at the MA50 line, and MA200.

The rest of the week’s key data include Wednesday, the last US Q3 GDP reading, which is expected to remain unchanged from the previous 2.1% reading, and Thursday’s US Core PCE inflation report.

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Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand

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