Sunday, March 18, 2018
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AUD/USD bulls committed towards 0.79 with bullish technicals
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  • AUD/USD bulls in the driving seat.
  • Week gets busy with Aussie retail sales.

AUD/USD is currently trading at 0.7869 with a high of 0.7871 and a low of 0.7855 with a minor correction of the opening bearish gap.

AUD/USD has been capped in its ascent from 0.7834 and 4th Jan’s lows but is holding onto the post NFP disappointment levels where the data missed expectations of  190k arriving at just148k for Dec. However, the unemployment rate remained at 4.1% and average hourly earnings rose 0.3%, as expected, although Nov was revised down from 0.2% to 0.1%.
For today, the calendar is light on the domestic front and instead, the market has turned to China. The PBOC set USD/CNY central rate at 6.4832 (vs. Friday at 6.4915) and it is worth noting that the Bank’s research bureau deputy head Ji Min was in the China Daily over the weekend saying that there is room for an increase in interest rates in the short term that will help to squeeze asset bubbles and restrain debt expansions.

The week ahead

For the week ahead, however, domestic data picks up, first with building approvals for Nov and then the key retail sales numbers further down the line. “Retail sales posted a slightly better than expected result for Oct with a 0.5% gain and previous months revised up slightly. Despite this, sales still show a significant slowing with annual growth falling to 1.8%yr from 3.7% in June,” explained analysts at Westpac, adding, “Consumer sentiment recovered somewhat through Q4 with pressures on family finances easing. Risk aversion remained elevated though with Christmas spending plans also subdued. Private sector business surveys suggest the modest improvement in retail in October carried into November. We expect a 0.3% gain.”

Fed’s Williams: “three rate hikes makes sense to me”

AUD/USD levels

Technicals remain bullish with a rise in the RSIs rise after the 50 Fib of 0.8125-0.7501 & daily cloud top was pierced. Valeria Bednarik, chief analyst at explained that the daily chart shows that the 20 SMA heads sharply higher far below the current level, while technical indicators have lost strength upward, but the Momentum holds well above its 100 level, and the RSI stands currently at 77, with no sign of upward exhaustion. “Shorter term, and according to the 4 hours chart, the pair has been steadily meeting buying interest around a bullish 20 SMA, currently around 0.7840, while technical indicators are also directionless within positive territory,” Valeria added.

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