FXStreet (Guatemala) – There has been a market for the bid in AUD/USD, despite the longer term implications of inflationary pressures dragging below the RBA’s target as shown in yesterday’s TD Securities mean trim for Nov Y/Y.
Instead, markets rather pay attention to the headline 0.1% m/m vs prior 0.0% m/m as the RBA tracks performance on a m/m basis while investors are gauging each and every development on a shorter term basis as we head into the closing weeks of the year. However, while a series of data of late has been stacking up on the less bullish side vs the RBA’s more positive outlook coupled with the possibility of a Fed hike, the downside remains compelling and recoveries may remain shallow.
Nonfarm Payrolls / OPEC key events
Besides the RBA meeting, expected to stay on hold, the Nonfarm Payrolls is the key data for this week and will likely underpin a strong dollar is indeed the numbers remain positive. It will also be a big week in commodities with the OPEC meeting coming up where risk could lead to a stabilization of prices, supporting the outlook of firmer commodity currencies.
AUD/USD levels
Technically, 0.7170 is a key target to the downside and a break of which should crystalise the bearish trend in the medium term. The price has recently broken to the upside and above the key 100 DMA again, making a hard life for the bears who are looking for a series of daily closes below this level at 0.7197. The Sep lows at 0.6907 would be back into focus on any sustained downside with 0.7015 and 0.6950 supports to break first. The upside is limited below the 0.74 handle and 200 DMA at 0.7470.
(Market News Provided by FXstreet)