AUD/USD prints mild gains around 0.7110, snapping a six-day downtrend near 2021 bottom during Thursday’s Asian session. The Aussie pair’s latest consolidation could be linked to the softer Treasury yields and mixed trade numbers from home.
Australia Trade Balance grew past 11000M forecast to 11220M in October, versus 12243M prior. The details suggest that the Imports shrank more than -2.0% previous release to -3.0% whereas Exports improved to -3.0% from -6.0% prior. Additionally, Home Loans dropped below -1.0% market consensus and -2.7% previous reading to -4.1% whereas Investment Lending for Homes eased to 1.1% versus 1.4% printed the last.
Read: Aussie Trade Balance Oct: A$11.22B vs est A$11.150B; Aussie firm
Following the data, AUD/USD prices remain mildly bid around the intraday high as traders await Friday’s US Nonfarm Payrolls (NFP) after recently mixed signals from the Fed Chair Jerome Powell weighed down the Treasury yields.
That said, the US 10-year Treasury yields stay pressured near a two-month low surrounding 1.40% by the press time whereas the S&P 500 Futures print 0.40% intraday gains after the Wall Street benchmarks marked second consecutive daily loss.
Federal Reserve (Fed) Chairman Jerome Powell reiterated his inflation fears but also said he still believes inflation will come down “meaningfully” in the second half of 2022, during testimony against a Senate Commission. On the contrary, Federal Reserve Bank of New York President John C. Williams said, per New York Times, that Omicron could prolong supply and demand mismatches, causing some inflation pressures to last.
The virus woes recently spread into the US after the first Omicron case pushed President Joe Biden’s administration to extend the rules for wearing a mask in public transit. “US President Joe Biden's administration will extend requirements for travelers to wear masks on airplanes, trains and buses and at airports and train stations through mid-March to address ongoing COVID-19 risks,” said Reuters quoting anonymous sources.
Given the mixed concerns over inflation and a 10-week low of the US inflation expectations, per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, risk appetite is likely to rely on the virus update for fresh impulse. However, the AUD/USD prices are expected to portray a sluggish move amid a lack of major data and the generally observed pre-NFP trading lull.
Read: US nonfarm payrolls take center stage after Powell’s hawkishness
AUD/USD remains bearish until defying a downward sloping trend channel from late October, between 0.7190 and 0.7075 at the latest. Adding to the upside filter is the 50-SMA and 23.6% Fibonacci retracement (Fibo.) of late October to November downside, around 0.7175-80.
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. 72.72% 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.