AUD/USD ANALYSIS & TALKING POINTS
- Tug of battle between Chinese and U.S. components dictate AUD value motion.
- Thinning liquidity reflective in AUD/USD as markets await basic catalyst.
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AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP
The pro-growth Australian greenback is in a consolidatory part of latest being pushed and pulled by exterior world components. Primary drivers have been Chinese optimism round stimulating financial progress in 2023 (boosting commodity costs) as nicely a fluctuating USD primarily based on U.S. financial knowledge. Markets could also be barely overreacting to world ‘risk on’ sentiment contemplating the worsening COVID scenario in China potential exposing the Aussie greenback to subsequent weak point within the coming week in addition to Q1 of 2023.
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Next week is extraordinarily mild within the midst of the festive interval with no Australian knowledge scheduled, U.S. releases will take priority. The housing and labor markets shall be in focus and supply further steerage for the Fed in 2023.
Source: DailyFX financial calendar
AUD/USD DAILY CHART
Chart ready by Warren Venketas, IG
Daily AUD/USD value motion stays beneath the psychological 0.6700 help degree. After the latest rising wedge sample (black) breakout, expectations might have been for larger draw back however the AUD has managed to stay surprisingly elevated. That being stated, there may be nonetheless scope for additional decline however the Relative Strength Index (RSI) suggests market hesitancy on the midpoint 50 mark.
Key resistance ranges:
Key help ranges:
IG CLIENT SENTIMENT DATA: MIXED
IGCS reveals retail merchants are at the moment LONG on AUD/USD, with 61% of merchants at the moment holding lengthy positions. At DailyFX we sometimes take a contrarian view to crowd sentiment however latest modifications in lengthy and brief positioning end in a short-term cautious bias.
Contact and observeWarrenon Twitter:@WVenketas