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
More View more
Real Time News
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/wwxKQFibW6
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am EST on DailyFX! A look at the levels heading into #FOMC - https://t.co/lxd5fZnn4H
  • 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/Nx6AHxZksK
  • Markets Week Ahead: Euro, Dollar, Gold, S&P 500, Earnings, Inflation Check out @RichDvorakFX's latest market recap and preview plus all the weekly forecasts from the @DailyFXTeam at the link below! Link to Analysis - https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2021/07/25/markets-week-ahead-euro-dollar-gold-sp500-fed-earnings-inflation.html $EURUSD $SPX #Trading
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/xKkBwu951j
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/MYWlQphqtb
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/paOy1oQmn3
  • US indices have a packed week ahead with earnings from the major technology names, US GDP data due and an FOMC rate decision. With so much on the docket the potential for volatility is heightened. Get your stock market forecast from @PeterHanksFX here: https://t.co/CH4WoStHvu
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/otJwnuR7qe
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/s4lZWdJoXV
Australian Dollar Strength Challenged by China Data, US Impasse

Australian Dollar Strength Challenged by China Data, US Impasse

Ilya Spivak, Head Strategist, APAC
Australian_Dollar_Strength_Challenged_by_China_Data_US_Impasse_body_123456.png, Australian Dollar Strength Challenged by China Data, US Impasse

Australian Dollar Strength Challenged by China Data, US Impasse

Fundamental Forecast for Australian Dollar: Bullish

  • Australian Dollar Recovery Faces Important Test Amid Key Chinese Economic Data
  • Breakout of Risk Aversion Still a Threat as US Debt Ceiling Deal Remains Elusive
  • DailyFX SSI Shows Speculative Sentiment Balance Now Favors Aussie Dollar Gains

We’ve argued in favor of a significant Australian Dollar recovery since early August. We thought an improvement in Chinese news-flow will help arrest the slide in economic growth expectations for the East Asian giant, boosting the outlook for Australia’s mining sector exports and prompting a positive shift in the RBA policy bets. The case for an upside scenario seemed all the more compelling against a backdrop of highly over-extended speculative net-short positioning and we proceeded to enter long AUD/USD after an attractive technical setup presented itself.

Prices turned higher as expected, with the COT data over recent weeks pointing to aggressive short-covering. Furthermore, not only have RBA interest rate cut expectations fizzled, but a gauge of priced-in policy bets from Credit Suisse now stands at the highest since June 2011 and calls for modest tightening over the next 12 months. The week ahead will test the Aussie’s resilience however amid a slew of top-tier Chinese economic data.

Expectations call for a supportive set of Chinese economic indicators. Third-quarter GDP figures are due to show the year-on-year economic growth rate accelerated to 7.8 percent, marking the best performance yet this year. September’s industrial production, capex and retail sales numbers are likewise tipped to show improvement. Needless to say, such outcomes would bode well for the Aussie.

However, Chinese news-flow notably flat-lined relative to expectations in September having shown strong improvements in July and August while recent pullbacks on PMI readings have been a bit worrisome. That leaves the door open for a downside surprise on one (or more) of the key indicators slated for next week, putting the Australian unit’s recovery at risk.

The risk of an adverse shock from macro-level forces remains significant as well. The Aussie is still significantly sensitive to broad-based risk appetite trends, with AUD/USD showing meaningful correlations to various measures of market sentiment including the S&P 500, the MSCI World Stock Index and DailyFX’s own Risk-Reward index. That makes for a vulnerability to the outbreak of risk aversion in the event that continued wrangling over the US budget in Washington DC fails to produce a deal before the October 17 deadline to raise the so-called “debt ceiling”.

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

DISCLOSURES