The Australian economy is looking stronger according to October data released this week. Exports in October declined by 3% month-on-month compared to 6% in the previous month despite continuous tension with China, while retail sales were up by 4.9% against 1.3% in September. It seems that the Australian economy is compensating for some export losses from China with growing domestic demand. This is confirmed by rising Q3 GDP that was up by 3.9% against 3% expected by analysts.
Such developments may attract elevated interest to the AUDUSD. The Greenback is usually the leader in this pair and the American currency managed to push the Australian Dollar to 0.7060 from 0.7560 at the end of October. However, the Dollar has been seen to lose steam recently as the U.S. Dollar index rebounded from a 97 point high in November to 95.86 points on December 2 amid fears over the new Omicron coronavirus variant and the recovery of the U.S. economy. The positioning of the U.S. Dollar may push the Aussie higher with a little delay, and the continuous economic recovery in Australia may also lead to the rise of the currency. There are also some technical reasons for the Aussie to climb. The AUDUSD has recently hit a major support level on the daily timeframe chart at 0.71. The entire decline from the maximum of late October almost moved without any corrections, so the rebound, even in a form of a correction, may be justified.
Another reason for the upside recovery of the Aussie may come to light on December 3 if the Non-Farm Payrolls data fails to satisfy the U.S. Dollar bulls. The nearest upside target is at 0.72, and the next one is at 0.7250-0.7300.
Nevertheless, the upward trend for the U.S. Dollar is still intact and this possible upside move of the Aussie may rather be a correction than a change of the running trend. This development may further support a rebound of the Australian Dollar.
Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.94% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2022 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.