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Australian Dollar Eyes PBOC Rate Cuts Amid Protracted China Power Woes
- 2022/8/22
- Posted by: admin
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No CommentsAUSTRALIAN DOLLAR, AUD/USD, CHINA, PBOC, RATES, TECHNICAL OUTLOOK – TALKING POINTS
APAC markets set to open the week on shaky ground after China extends power cuts
The People’s Bank of China (PBOC) is expected to slash two key lending rates
AUD/USD’s technical posture points to more losses after a big 3.5% weekly drop
How to Trade AUD/USDHow to Trade AUD/USDAsia-Pacific markets look vulnerable after Wall Street traders closed the week on the back foot, with equity losses accelerating on Friday in New York. The benchmark S&P 500 fell 1.21%, and the high-beta Nasdaq-100 (NDX) closed 2.38% lower. A large number of options, around $2 trillion worth, expired on Friday, likely bolstering volatility.
Sichuan province, one of China’s most populous, extended power rationing across the region amid extreme heat and drought. Factories and other industrial plants are to remain closed until August 25, extending the original order by five days. The protracted industry shutdown will likely add to the economic headwinds from sporadic Covid lockdowns and could even reverse some progress made on congested supply chains.
According to a Bloomberg survey, the People’s Bank of China (PBOC) is expected to cut its 1- and 5-year loan prime rates today. Credit growth has been lackluster recently, likely underpinning the central bank’s commitment to easing policy. The PBOC unexpectedly cut several other lending rates last week. China’s property sector is another problem still looming over the economic powerhouse. AUD/USD fell 3.5% last week. Currency traders increased their net short position on AUD, according to the latest CFTC data.
An eight-day strike at the United Kingdom’s Felixstowe port started on Sunday, threatening to inflict further damage on global supply chains and adding to Europe’s price pressures. PMI readings for the United Kingdom’s services and manufacturing sectors are due. Analysts expect to see both gauges remain in expansion for July but fall from the prior month.
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AUD/USD TECHNICAL OUTLOOK
AUD/USD’s technical positioning doesn’t offer an optimistic view. The currency pair set a fresh August low last week, although the 61.8% Fibonacci retracement level provided some support but only after an already big move. The 50-day Simple Moving Average was broken shortly after RSI crossed below its midpoint. The MACD oscillator is also on track to cross below its own midpoint, another bearish sign.
— Written by Thomas Westwater, Analyst for DailyFX.com -
Dollar Recovers Some Losses After Inflation-Driven Drop
- 2022/8/12
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Investing.com — The dollar made up some losses on Thursday after a steep drop the previous day on softer than expected inflation data out of the U.S.
The dollar index, which measures the greenback against a number of other global currencies, was trading 0.08% higher at 105.28 as of 02:47 ET (06:47 GMT).
The headline U.S. consumer price index rose by 8.5% on an annual basis in July and was flat compared with June, below estimates of 8.7% and 0.2%, due in part to a decline in petrol costs. The print led some investors to revise their expectations for a Federal Reserve interest rate hike in September, with the uptick now seen at 50 basis points instead from 75 basis points, according to the CME’s Fedwatch tool.
Fed policymakers also warned following the data that they would maintain rate hikes until inflation pressures subside.
Aggressive Fed monetary tightening to quell soaring price growth has undergirded recent strength in the dollar, as traders seek the relative safety of the currency amid concerns that the rate increases may weigh on broader economic growth.
The dollar touched a one-month low in the wake of the release of the inflation data.
Meanwhile, the EUR/USD pulled back slightly from its largest daily percentage gain since mid-June, with the European common currency now changing hands up 0.16% at $1.0313.
The Japanese yen was down 0.11% against the dollar at JPY 132.70, after a 1.6% fall on Wednesday.
Elsewhere, the AUD/USD, another gauge of risk appetite, edged higher by 0.27% to $0.71, while GBP/USD held mostly steady at $1.22.
Additionally, Bitcoin rose 7.04% to $24,553.4, nearing a two-month high for the cryptocurrency.
By Scott Kanowsky
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AUD/USD Buoyed by Rising Iron Ore Prices as Traders Eye Westpac Consumer Confidence
- 2022/8/9
- Posted by: admin
- Category: 暂无
TUESDAY’S ASIA-PACIFIC OUTLOOK
The Australian Dollar is searching for direction in Asia-Pacific trading after rising more than 1% overnight. Stocks closed mixed on Wall Street. The tech-heavy Nasdaq-100 Index (NDX) fell, and the small-cap Russell 2000 rose. Rising oil prices helped support energy stocks, with WTI crude oil and Brent oil prices rising more than 2%.Copper and iron ore prices are higher, aiding the commodity-sensitive Aussie Dollar. China’s trade balance data showed a renewed appetite for many commodities in July. Goldman Sachs cut its Brent crude oil price forecast for the third quarter from $110 to $140. Energy traders are watching for monthly reports from OPEC and the International Energy Agency this week, along with inventory data from the API and EIA.
OZ Minerals rejected an unsolicited offer from BHP Group worth A$8.34 billion. The CEO of OZ Minerals appeared unimpressed with the offer, but it is unknown if BHP will adjust its bid. Overall, however, it’s a positive sign for the copper industry. The recent drop in prices does favor the position of larger companies that are likely better capitalized.New Zealand’s electronic retail card spending fell 0.2% from the prior month in July. NZD/USD climbed above its 50-day Simple Moving Average during New York hours. A move higher in iron ore prices helped support AUD, but prices face a potentially volatile session today, with Westpac consumer confidence due shortly. The gauge has fallen since January, and the RBA’s recent rate hike may have dragged sentiment further.
NOTABLE EVENTS FOR AUGUST 09:
Philippines – Balance of Trade (June)Australia – NAB Business Confidence
Philippines – GDP Growth Rate QoQ (Q2)
Thailand – Consumer Confidence (July)
Japan – 30-Year JGB Auction
Indonesia – Retail Sales YoY (June)
AUD/USD TECHNICAL OUTLOOK
AUD/USD is trading back above its 50-day Simple Moving Average (SMA) after rising from its 20-day SMA. A break above the 0.7036 level may clear a path for more gains. However, RSI and MACD, while positive, have started to moderate. A pullback would aim for support around the 20- and 50-day SMAs.
— Written by Thomas Westwater, Analyst for DailyFX.com -
AUD/USD Prices Hinge on RBA Statement as APAC Traders Brace for US Jobs Report
- 2022/8/5
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US stock indexes closed mixed overnight on Wall Street as traders prepare for the United States non-farm payrolls report. The jobs report is a vital component to help gauge Federal Reserve policy as rhetoric among Fed members pushes back against softening rate hike bets. Cleveland Federal Reserve President Loretta Mester reaffirmed the Fed’s commitment to fighting inflation. Short-term Treasury yields rose but failed to lift the Greenback.
The Bank of England’s policy announcement sent the British Pound lower against its major peers. The central bank sees a recession taking hold in the fourth quarter until 2023. That, and a stronger inflation outlook, clouds the United Kingdom’s economic outlook. The Sterling fell more than half a percent against the Euro despite a 50-basis-point rate hike from the BOE. That was somewhat surprising, seeing as how Europe is subject to the same energy-driven cost pressure, perhaps even more so than the UK.
Gold prices rose, hitting the highest level since July 5 after gaining over 1.5% overnight. The weaker Greenback helped support bullion even as US Treasury rates. Rose. The VanEck gold miners ETF closed 3.48% higher, the biggest daily gain since June. Bitcoin fell following Chinese missile strikes around Taiwanese water, which revived geopolitical risks stemming from the US House Speaker’s visit. While a direct military conflict is unlikely as of now, the strikes represent an increase in hostility between China and Taiwan.
The Reserve Bank of Australia’s Statement on Monetary Policy may elicit a strong Australian Dollar response. Traders will analyze the economic assessment and inflation outlook updates to help gauge future policy actions. RBA Governor Philip Lowe was less hawkish than many expected after his institution hiked its rate by 50 bps earlier this week. Mr. Lowe’s rhetoric disappointed policy hawks and punished the AUD. The market believes the RBA is behind the curve on inflation. That puts AUD prices at risk, should today’s report temper rate hike bets further.
The Indian Rupee is at risk of falling to a fresh low against the US Dollar if the Reserve Bank of India (RBI) delivers a rate hike below the expected 35-bps increase. Australia’s Ai Group Services Index (Australian PSI) rose to 51.7 in July from 48.8 in June, putting the performance of services index back into expansion, a bright sign for economic growth.
— Written by Thomas Westwater, Analyst for DailyFX.com -
Australian Dollar Technical Forecast: AUD/USD Rally Rips into Resistance
- 2022/7/29
- Posted by: admin
- Category: 暂无
The Australian Dollar rallied nearly 5% off the yearly lows against the US Dollar with AUD/USD reversing off downtrend support earlier in the month. A two-week recovery now takes Aussie into the first technical downtrend resistance zone and we’re looking for a reaction here into the close of the week / month for guidance. Is this just a bear-market bounce or is there a larger correction underway? These are the updated targets and invalidation levels that matter on the AUD/USD weekly technical chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Aussie technical setup and more.
Notes: In my last AUD/USD Weekly Technical Forecast we noted that AUD/USD was, “testing downtrend support on building momentum— Written by Michael Boutros, Technical Strategist with DailyFX divergence for nearly four weeks now and the immediate short-bias may be vulnerable while above the lower parallel. From at trading standpoint, rallies should be capped by 7000 IF price is still heading lower on this stretch…” Aussie turned sharply off trend support with a two-week rally now testing key resistance at 6991- 7016- a region defined by the November 2020 swing low, the objective 2020 yearly open, the 2021 lows and the January low-week close. We’re looking for price inflection into this zone.
A topside breach / weekly close above would be needed to suggest a larger correction is underway here with such a scenario exposing the 38.2% retracement / May high-week close / 52-week moving average at 7188-7207. Support now rests with the low-week close at 6792 – note that a break / close below this threshold could threaten another accelerated decline for the Aussie with initial support objectives eyed at the 2008 low-week close / 2019 low at 6660/70 and the 61.8% Fibonacci retracement of the entire 2020 rally at 6461.
Bottom line: A rebound off downtrend support takes AUD/USD into the first major downtrend resistance zone – looking for possible price inflection up here. From a trading standpoint, a good zone to reduce short-exposure / raise protective stops – watch the weekly / monthly close with respect to 6991-7016 for guidance. I’ll publish an updated Australian Dollar Price Outlook once we get further clarity on the near-term AUD/USD technical trade levels.
— Written by Michael Boutros, Technical Strategist with DailyFX
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Central Bank Watch: Fed Speeches, Interest Rate Expectations Update; July Fed Meeting Preview
- 2022/7/27
- Posted by: admin
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CENTRAL BANK WATCH OVERVIEW:
Rates markets are fully discounting a 75-bps rate hike by the Federal Reserve this week, with a 13% chance of a 100-bps rate hike.
A weakening US economy has capped US Treasury yields and led to a decline in market-based expectations of how much more tightening may be on the horizon: there is no longer a 25-bps rate hike priced-in for December; and rate cuts are being discounted in 2023.
As markets are ever-forward looking, this week’s rate hike from the Fed may not be a bullish catalyst for the US Dollar if additional rate hikes this year are not signaled.
— Written by Christopher Vecchio, CFA, Senior Strategist -
Australian Dollar Forecast: AUD/USD Faces a Busy Week Ahead
- 2022/7/25
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MONDAY’S ASIA-PACIFIC OUTLOOK
Asia-Pacific traders face a potentially volatile week, with several high-impact events ahead that may shift market sentiment. Equity indexes moved higher across US, European and APAC markets as the US Dollar pulled back. The DXY Index fell for a second week, weighed down by an advancing Yen, Euro and Australian Dollar.The Australian Dollar may see more gains this week if risk appetite holds up, although market sentiment has been fragile as traders continuously digest economic data, central bank commentary and other indicators. Later this week, Australia’s second-quarter inflation rate may lift AUD/USD if the data surprises to the upside. The Bloomberg consensus forecast sees a 6.3% year-over-year increase, up from 5.1%.
{{GUIDE|AUD}
China’s property sector woes and its broader economic condition will likely continue to play a large part in influencing market sentiment. Hong Kong’s Financial Secretary Paul Chan wrote in a blog post over the weekend that Hong Kong’s financial situation is sound. Mr. Chan’s comments are in response to the large number of capital outflows seen over the last several months, causing some to speculate that the city’s monetary system may soon become illiquid.
Traders face a relatively light economic docket for today, but several potentially high-impact events loom. The United States will see a consumer confidence update and an advance read on second-quarter gross domestic product (GDP) growth. Those events may cause big shifts in the US Dollar, which has broad-ranging potential to disrupt financial markets. Europe is also due for its Q2 GDP print to cross the wires.
— Written by Thomas Westwater, Analyst for DailyFX.com -
Australian Dollar Technical Forecast: AUD/USD Bears Face Trend Support
- 2022/7/19
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AUSTRALIAN DOLLAR TECHNICAL PRICE OUTLOOK: AUD/USD WEEKLY TRADE LEVELS
Australian Dollar technical trade level update – Weekly Chart
AUD/USD holds downtrend support for a fourth week – risk for price inflection
Aussie resistance 6991-7016, 7187-7206 (key), 7270- Support 6785, 6660/70 (key), 6461
The Australian Dollar rallied more than 2% off the yearly / monthly lows against the US Dollar with AUD/USD responding to downtrend support for the past month. While the broader outlook remains weighted to the downside, the immediate decline may be vulnerable here and the threat for a recovery rises while above the weekly open. These are the updated targets and invalidation levels that matter on the AUD/USD technical price charts this week. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Aussie technical setup and more.
— Written by Michael Boutros, Technical Strategist with DailyFX -
Australian Dollar Relief Hinges on China GDP Report
- 2022/7/15
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FRIDAY’S ASIA-PACIFIC OUTLOOK
AUD/USD is little changed after swinging between gains and losses over the past 24 hours. The US Dollar strengthened after a government report showed an 11.3% y/y rise in US wholesale prices, which firmed up Federal Reserve rate hike bets. Those stronger bets eased earlier this morning when Fed Governor Christopher Waller appeared to throw his support behind a 75 basis-point hike. The Dow Jones Industrial Average (DJIA) fell 0.46% at the close.Crude oil prices fell more than 4% before trimming losses. WTI crude oil is nearing a 10% loss for the month as demand shows signs of cooling. Data from the US Energy Information Administration (EIA) revealed a sharp drop in gasoline demand for the week ending July 08. That is reflected in the 1:1 oil/gasoline crack spread, a proxy for refiner margins.
Iron ore prices are down in early trading, presenting a headwind for the Australian Dollar. However, China may lift its ban on Australian coal. Chinese policymakers worry that increased competition amid Russian sanctions will make coal harder to source. Australia stands to benefit from higher export revenues if the two-year ban is lifted. Newcastle coal futures traded at $430 a tonne, just below its record high set back in March.
China’s second-quarter gross domestic product (GDP) growth rate is slated to cross the wires today. Analysts expect the Q2 figure to show a 1.0% y/y increase, which would be down from 4.8% y/y in Q1. The lockdowns in Shanghai and other cities from April to June likely weighed on economic activity. Meanwhile, China’s property sector continues to struggle as developers miss interest payments. Moreover, reports of protests over mortgage payments are surfacing, which may draw a response from Beijing. China Merchants Bank, a firm with heavy mortgage debt exposure, fell 3.75% in Shanghai on Thursday.
(From — Written by Thomas Westwater, Analyst for DailyFX.com)
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US Dollar Technical Forecast: USD Rip to 20year High at Risk in Days Ahead
- 2022/7/13
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The US Dollar Index ripped to fresh yearly highs this week with DXY surging to levels not seen since October of 2002. The rally is now approaching technical levels of interest and while the broader outlook remains constructive, the bulls will need to stabilize up here to keep the uptrend viable and maintain the momentum needed for a test of uptrend resistance just higher. These are the updated technical targets and invalidation levels that matter on the US Dollar Index weekly price chart. Review my latest Strategy Webinar for an in-depth breakdown of thisDXY technical setup and more.
In last month’s US Dollar Weekly Price Outlook we noted that DXY had, “responded to uptrend resistance for the second time on building momentum divergence and once again highlights the threat for near-term exhaustion in the index. From a trading standpoint, a good time to reduce portions of long-exposure / raise protective stops – losses should be limited to 101.87/95 IF the index is indeed heading higher on this stretch.” The Dollar fell 2% off those highs in the following weeks with the index registering a low at 103.67 before reversing sharply higher. The rally has now extended for a third consecutive week with the advance now attempting to break uptrend resistance around the 2001 swing low at 108.09. The focus is on the weekly close with respect to this threshodl for guidance.A topside breach from here keeps the focus on a sliding parallel of the 2011 trendline extending off the 2020 highs (currently ~109.10s) backed by the 78.6% Fibonacci retracement of the 2001 decline at 110.25- look for a larger reaction in price there IF reached. Initial weekly support now rests with the 1989 high at 106.56 backed by the 1999 high at 104.88. Broader bullish invalidation now raise do the 2019 high close at 103.
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Bottom line: The US Dollar rally has accelerated into uptrend resistance and stabilization above 108 is needed to keep the immediate advance viable in the weeks ahead. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to the objective monthly open at 104.77 IF price is indeed heading higher on this stretch. Stay nimble into major event risk this week with key US inflation data (CPI) and retail sales on tap. I’ll publish and updated US Dollar Price Outlook once we get further clarity on the short-term DXY technical trade levels.
(From DailyFX)