USD Trading Outlook
The USD has been heavily sold across the board after the temporary resolution to the debt-ceiling impasse showed the market that another similar situation will arise early next year. AUD/USD broke above barrier protection at .9600 and seems likely to test technical resistance levels above 97 cents. Today sees a speech from RBA Governor Stevens as well as Chinese GDP on the economic calendar. Given the events of the last 24 hours, I think we can expect a lively session with downward pressure on the USD set to continue.
It looks like an agreement has been reached on increasing the US debt ceiling and this deal is currently being voted on. The AUD has remained very well supported as ‘risk-on’ trades look to be the order of the day. AUD/JPY is trading at recent trend highs and just below important technical resistance whilst AUD/USD has taken out one barrier near .9550, although another bigger one looms at .9600. The economic calendar is again very bare and unfortunately we may be in for yet another very quiet session.
The AUD has remained quite active on the crosses over the last 24 hours as we wait for a debt-deal announcement out of Washington. Yesterday’s RBA meeting minutes suggested that a rate cut might still be possible but there is no rush, and this caused the AUD to rally across the board. Heavy topside option barriers in the AUD/USD stalled the bullish momentum. Not much of note on today’s economic calendar so we sit and wait for the US.
Yet more meetings in the White House have raised expectations that some announcement regarding an end to the debt-deal impasse might soon happen. The AUD/USD spiked higher above .9500, which had more to do with dealers breaking through an option barrier rather than any reaction to events in Washington. The latest RBA meeting minutes will be released today but all eyes and ears will be on the White House for any sign of a deal.
The AUD has opened lower in Asia after much poorer than expected China trade data which was released over the weekend. The market had expected a 6.0% YoY increase but got a fall of 0.3% YoY instead. The AUD/USD has ‘only’ fallen by 50 pips on the back of this which suggests that the market is not long and there are not very many stops on the downside. The talks in Washington regarding a solution to their debt-ceiling impasse keep dragging on and this will also weigh on risk trades and of course on the USD. Chinese CPI data is the highlight of today’s economic calendar.
Go to U.S. Dollar (USD) Archive