AUD

Contrary to what you may expect, movements in AUD/USD on Tuesday may be dictated by the performance of Chinese financial markets rather than the latest batch of Chinese economic data including Q1 GDP.

With ample good news priced into the US dollar outlook and a big reversal in the AUD/USD on Tuesday, there are signs the torrent of bearish sentiment may be slowly turning around.

AUD/USD remains a sell-on-rallies prospect in a week where interpretation of Fedspeak and US labour market data will dominate. It will be imperative for the US data to portray a message of continued economic strength to see meaningful downside materialise.

At the end of last week, I highlighted a potential bearish continuation pattern on AUD/USD. But the further this week has progressed, the more I have questioned its potential to break lower.

Australia’s inflation report undershot expectations in February, although there’s still evidence of stickiness in underlying price measures. Markets reacted by bidding Australian government bonds which have pressured AUD/USD, seeing it test uptrend support. A break could see the Aussie revisit its 2024 lows.

AUD/USD is threatening to break the uptrend it’s been in since October, failing to find traction despite what was the largest coordinated central bank dovish pivot since the start of the pandemic last week. With little event risk on the calendar, the fortunes of AUD/USD may be determined by USD/CNY following a dramatic end to trade in Chinese markets on Friday.

AUD/USD looks heavy on the charts, weighed down by tumbling iron ore and coal prices and widening interest rate differentials with the United States.

AUD/USD has surged to a technical level where it’s done plenty of work around in the past, providing an opportunity for traders to establish trades with excellent risk-reward potential. With declining US bond yields suffocating the US dollar rally, directional risks appear slanted to the upside.

With the US dollar unable to find traction despite shorter-dated US yields rising to the highest level since mid-December, there are grounds to suggest AUD/USD may be able to break stubborn resistance located above .6530 in the days ahead.

Australia's unemployment rose to a three year to knock AUD pairs from their perches. But in particular I'm keeping an eye on AUD/JPY which has reversed at a key resistance area.

AUD/USD hasn’t had much luck dealing with sellers layered above .6530 recently. 13 attempts on the four-hourly chart in less than a week to no avail, leaving it sandwiched in a tight range between minor uptrend support.

EUR/AUD is on track to record its fifth consecutive daily gain to start the trading week, moving the pair to within touching distance of the downtrend bulls have been thwarted at on several separate occasions dating back to the middle of last year.

A rebound in US equities sparked by renewed earnings optimism and continued declines in US bond yields acted to snuff out a potential downside break in AUD/USD, sending the pair sharply higher over the course of North American trade.

The proximity of EUR/AUD to its 200-day moving average and uptrend support presents an opportunity for traders to position for either a bounce or break from this technical juncture, providing favourable risk-reward depending on which way the price moves.

Having spiked to two-month highs in the immediate aftermath of Australia’s December jobs report, EUR/AUD reversed hard, generating a bearish pin candle on the four-hourly suggesting it may have seen a near-term top.

The Australian dollar did well to hold above 63c through October despite the negative headlines thrown its way. And with the increased odds that the RBA may have a hike or two up their sleeve, perhaps AUD can find the strength to post a rally should sentiment allow.

The GBP/AUD uptrend faces a string of big tests over the next 24 hours, potentially influencing the outlook for interest rates from the BoE and RBA.