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 Tuesday the 21st of December 2021
- AUD – Monetary Policy Meeting Minutes at 11:30 am AEDT
The Aussie Dollar – Fundamentals
The AUD/USD continues to trade on the back foot on the day, with the pair currently down about 0.2%, though has managed to bounce from earlier session lows in the 0.7080s back to the north of the 0.7100 level in recent trade. The 0.7100 area has been a decent zone of support over the last few weeks and a break below it this week could open the door to a run lower towards annual lows in the 0.7000 area.
Worries about the economic impact of the fast-spreading Omicron Covid-19 variant amid news of lockdowns in Europe (the Netherlands announced a full lockdown and other countries may follow suit) have been weighing on sentiment and commodity prices are decisively lower, which is a double whammy for the risk/commodity-sensitive AUD. The theme of Omicron and lockdowns will remain the major driver of risk appetite for the remainder of the week (and year), amid thinned liquidity conditions due to the proximity of Christmas and New Year holiday celebrations. Subsequently, there will be a lack of key macro data releases until the new year, though traders would do well to keep an eye on Tuesday’s RBA minutes and Thursday’s US Core PCE inflation data for November.
The Aussie Dollar – Technical Analysis
The Aussie Dollar tested the 0.7110 level of support overnight, as the market continued to bounce between and test support at 0.7110 and resistance at 0.7172. We will continue to watch the channel closely to see when the market will break from this channel.
Resistance on the Top Side – we see resistance at 0.7172. If 0.7172 is broken we see more resistance at the 50 Day MA(0.7288), then closely followed by resistance at 0.7300
Support on the Downside – Overnight the market tested support at 0.7110. If the market continues lower, we see further support at the psychological level of 0.7000. If the market breaks 0.7000 continues to fall there is support at 0.6921 and then at 0.6800.
AUD/USD Daily Chart
DXY (USD INDEX) Daily Chart
Major Global Markets
- Stocks
- S&P 500 closed at 4568
- NASDAQ closed at 15689
- ASX 200 closed at 7292
- Currencies
- AUD/USD – At the time of writing this report trades at 0.7108
- AUD/JPY – At the time of writing this report trades at 80.79
- AUD/CNH – At the time of writing this report trades at 4.5347
- DXY (US Dollar Index) – At the time of writing this report trades 96.508
- AUD/EUR – At the time of writing this report trades 0.6305
- Bonds
- US 10-year Bonds are currently at 1.428
- Aussie 10-year Bonds are currently at 1.572
- Commodities
- Iron Ore 62% – Trading at USD/T 113.79
- Gold – trading at USD/OZ 1790
- Brent Crude Oil – Trading at USD/Bbl 72.03