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CAFX Market Update 12/01/2022

Good Morning,

 

Welcome to our daily market update where we help keep you informed on the latest happenings in the world of FX and show you what this means for the Mighty Aussie Dollar.

If you have any questions or would like anything further explained, please don’t hesitate to reach out to your account manager or email info@cafx.com

 

Key Data Being Released Today Wednesday the 12th of January 2022

  • USD – Fed Chair Powell Testifies Early this morning
  • Overnight Tonight/Early Morning Tomorrow
    • USD – CPI m/m

The Aussie Dollar – Fundamentals

AUD/USD has seen upside in recent trade and recently hit session highs just below 0.7200 as the US Dollar suffers broad weakness in wake of remarks from Fed chair Jerome Powell.

Powell’s remarks, made at his renomination hearing before the Senate Banking Committee, were broadly in line with the hawkish tone of the Fed minutes released last week, with Powell referencing plans to lift rates and begin balance sheet reduction in 2022. The lack of surprises seems to have triggered relief in US equities, with tech and rate-sensitive growth stock the best performers, as well as triggering some profit taking on long dollar positions. Indeed, the market is heavily long USD versus most G10 currencies, including the Aussie – last week’s CFTC data (released every week) showed that

 

The Aussie Dollar – Technical Analysis

Resistance on the Top Side – We see resistance at 0.7209 (50DMA), the market is currently testing this dynamic resistance level.  If the market breaks the 50 DMA, we see further resistance at 0.7300, then at 0.7415

Support on the Downside –   if the market bounces off resistance once again, we see support at 0.7120. If 0.7172 is broken, we see further support at 0.7110 and 0.7000.

 

 

AUD/USD Daily Chart

 

DXY (USD INDEX) Daily Chart

 

Major Global Markets

  • Stocks
    • S&P 500 closed at 4713
    • NASDAQ closed at 15826
    • ASX 200 closed at 7444

 

  • Currencies
    • AUD/USD – At the time of writing this report trades at 0.7212
    • AUD/JPY – At the time of writing this report trades at 83.15
    • AUD/CNH – At the time of writing this report trades at 4.5957
    • DXY (US Dollar Index) – At the time of writing this report trades 95.839
    • AUD/EUR – At the time of writing this report trades 0.6342

 

  • Bonds
    • US 10-year Bonds are currently at 1.746
    • Aussie 10-year Bonds are currently at 1.867

 

  • Commodities
    • Iron Ore 62% – Trading at USD/T 125.94
    • Gold – trading at USD/OZ 1821
    • Brent Crude Oil – Trading at USD/Bbl 83.75

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