News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Slippage can be a common occurrence in forex trading but is often misunderstood. Understanding how forex slippage occurs can enable a trader to minimize negative slippage, while potentially maximizing positive slippage. Learn about FX slippage here: https://t.co/Blrl0uF2Ct https://t.co/B0Y3XJhkRS
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/1xhewkdV21
  • (USD Weekly Tech) US Dollar Dominant Uptrend Back In Focus: EUR/USD, USD/JPY, NZD/USD, USD/CHF https://www.dailyfx.com/forex/technical/article/special_report/2021/09/20/US-Dollar-Dominant-Uptrend-Back-In-Focus-EURUSD-USDJPY-NZDUSD-USDCHF.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/IpwzBGCi7P
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/qv8keXFzHZ
  • Join @IlyaSpivak at 22:00 EST/2:00 GMT for his cross-market weekly outlook webinar. Register here: https://t.co/MKGHc9ae64 https://t.co/JMlT0Wn3DK
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/sbejkd7XT5
  • *Reminder: Weekly Strategy Webinar Monday morning at 8:30am ET - https://t.co/lxd5fZnn4H Mid-Week Market Update on Wednesday at 9:30am ET - https://t.co/8SFBJxNZrA
  • Are you new to trading? Technical analysis of charts aims to identify patterns and market trends by utilising different forms of technical chart types and other chart functions. Get a refresher on technical analysis or begin building your knowledge here: https://t.co/qV3c7a4YR3 https://t.co/CJR61cljOe
  • (AUD Weekly Tech) Australian Dollar May Wilt, Downtrends Resume: AUD/USD, AUD/JPY, AUD/NZD, AUD/CAD https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2021/09/19/Australian-Dollar-May-Wilt-Downtrends-Resume-AUDUSD-AUDJPY-AUDNZD-AUDCAD.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/DedoOKJMXh
  • Entry orders are a valuable tool in forex trading. Traders can strategize to come up with a great trading plan, but if they can’t execute that plan effectively, all their hard work might as well be thrown out. Learn how to place entry orders here: https://t.co/1mnOXUuBpt https://t.co/GQB0ic9Ahe
Australian Dollar Outlook Grim on Yield Curve as Jobs Data Looms

Australian Dollar Outlook Grim on Yield Curve as Jobs Data Looms

Daniel Dubrovsky, Strategist

Asia Pacific Market Open Talking Points

  • Australian Dollar at risk as sentiment sours on rising US recession worries
  • Aussie gains on jobs report could dwindle as global growth prospects fade
  • AUD/USD downside momentum fading but positioning offers bearish bias

Find out what the #1 mistake that traders make is and how you can fix it!

Australian Dollar at Risk as US Yield Curve Inversion Sinks Sentiment

The sentiment-linked Australian and New Zealand Dollars underperformed over the past 24 hours as rising fears of a US recession roiled financial markets. The Dow Jones Industrial dropped over 3 percent in its worst day on Wall Street this year as the S&P 500 fell by almost as much. Meanwhile, the anti-risk Japanese Yen and similarly-behaving Swiss Franc soared.

The source of panic likely stemmed from the inversion of the spread between US 10-year and 2-year government bond yields. The higher premium for near-term Treasuries compared to those maturing at a later date is historically seen as an acute signal of a looming recession. The more closely watched 10-year and 3-month spread has already been inverted since the end of May.

This is despite the US delaying a portion of additional $300b in Chinese import tariffs until December, perhaps reflecting fading confidence of a trade resolution between the countries down the road. Meanwhile, the global economy is becoming increasingly vulnerable after growth in Chinese industrial production slowed to its weakest in 17 years and German GDP contracted 0.1% q/q in the second quarter.

Thursday’s Asia Pacific Trading Session

Ahead, this leaves the sentiment-linked Australian Dollar at risk as it awaits an upcoming local employment report. Australia is anticipated to add 14.0k jobs in July and it may very well beat estimates. Relative to economists’ expectations, data has been tending to surprise to the upside in Australia as of late. While this may bode well for AUD/USD in the near-term, down the road it may fall flat on its face if global risk aversion escalates.

Join me as I cover AUD/USD and the Australian jobs report beginning at 1:15 GMT as I discuss the Aussie outlook

Taking a look at S&P 500 futures, they are pointing notably lower heading into Thursday’s Asia Pacific trading session. This may lead local benchmark stock indexes, such as the Nikkei 225 and ASX 200, to the downside. As such, this poses a threat to the Aussie while potentially benefiting the anti-risk Japanese Yen if the turmoil in markets continues.

AUD/USD Technical Analysis

Positive RSI divergence in AUD/USD does warn of ebbing momentum to the downside, offering bears a sign of caution. This may precede a turn higher or translate into further consolidation. The latter has been more of the case as of late as prices hover above March 2009 lows. Near-term resistance appears to be well-solidified as a range between 0.6827 and 0.6865. These are the former 2019 lows.

AUD/USD Daily Chart

Australian Dollar Outlook Grim on Yield Curve as Jobs Data Looms

Chart Created in TradingView

AUD/USD IG Client Sentiment

Meanwhile, IG Client Positioning is offering a stronger AUD/USD bearish contrarian trading bias. The number of net-short Aussie trading is unwinding quicker than net-long positioning. If this continues, we may see the downtrend in the Australian Dollar pick up pace. If you would like to learn more about using this tool in your trading strategy, join me every week on Wednesday’s at 00:00 GMT to see how!

Australian Dollar Outlook Grim on Yield Curve as Jobs Data Looms

FX Trading Resources

--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES