Reserve Financial institution of Australia (RBA)’s “dovish hike” despatched AUD/USD to new intraweek lows earlier at this time.
Are we wanting at first of an intraweek downtrend?
Earlier than transferring on, ICYMI, yesterday’s watchlist checked out CHF/JPY for a countertrend commerce alternative after Switzerland launched its CPI information. Be sure you take a look at if it’s nonetheless a legitimate play!
And now for the headlines that rocked the markets within the final buying and selling classes:
Recent Market Headlines & Financial Knowledge:
Canada’s IVEY PMI slowed down from 8-month excessive of 60.1 to 51.6 because the tempo of job creation eased in February.
Decrease civilian plane bookings helped drag U.S. manufacturing unit orders to a 1.6% dip in January after a downwardly revised 1.7% improve in December.
Japan’s actual wages dropped by 4.1% y/y in January, marking the tenth consecutive month-to-month decline and the quickest lower since Could 2014.
BRC: Valentine’s Day spending helped enhance UK retail spending by 4.9% y/y in February however the drop in quantity of products bought means customers are getting much less for his or her cash.
Australia’s retail gross sales rebound by 1.9% m/m in January after 4.0% decline in February as inflation and return of large-scale sporting and cultural occasions boosted catering providers.
Australia posted a 11.69B AUD commerce surplus in January, the smallest surplus since August, as exports (+1.4%) rose lower than imports (4.6%)
RBA raised its charges by an anticipated 25bps to three.6%, with the assertion hinting of another fee hike earlier than turning data-dependent.
China’s commerce surplus beat $81.8B expectations at $116.9B within the January-February interval however a better look confirmed exports (-6.8% y/y) and imports (-10.2% y/y) contracting deeper than market estimated.
Asian shares slip on weak China commerce information, focus shifts to Powell
In a two-hour presser, China’s new International Minister Qin Gang talked of an “invisible hand” escalating the battle in Ukraine and warned of “catastrophic penalties” if the U.S. doesn’t “hit the brakes” on present relations methods.
Switzerland’s jobless fee dipped from 2.2% to 2.1% in February.
Germany’s manufacturing unit orders up by one other 1.0% m/m in January, increased than the estimated 0.9% lower, however annualized figures present 10.9% decline from January 2022.
Halifax: UK dwelling costs unexpectedly jumped from 0.2% to 1.1% m/m in February because of reductions in mortgage charges and improved client confidence.
Worth Motion Information
Expectations of an RBA fee hike despatched the key AUD pairs to their U.S. session highs through the early Asian session.
The RBA did elevate its charges by 25 foundation factors as anticipated, however the central financial institution additionally modified its tone from February’s “additional will increase in rates of interest will probably be wanted” to “additional tightening of financial coverage will probably be wanted.” Markets took the change in tone to imply that RBA might flip data-dependent after one other fee hike in April.
AUD dropped throughout the board on the dovish hike and even noticed renewed bearish strain at first of the European session as merchants additionally priced in China’s disappointing commerce numbers and uncertainty forward of Powell’s testimony.
Fed Chairman Powell to testify in DC at 3:00 pm GMT
SNB Chairman Jordan to speak financial coverage at 6:00 pm GMT
RBA Gov. Lowe to provide a speech at 9:55 pm GMT
Japan’s financial institution lending at 11:50 pm GMT
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Technical Chart of the Day: AUD/USD
RBA’s dovish fee hike and surprisingly weak exports and imports in China did NOT assist AUD/USD’s costs at this time.
The pair not solely broke beneath a descending channel, but it surely additionally dropped beneath the .6700 psychological degree AND hit lows not seen since December.
Can AUD bears prolong AUD/USD’s intraday losses?
AUD/USD has already hit the usual Pivot Level‘s S2 assist and has fallen by 60 pips out of its common each day ATR of 80ish pips.
Powell’s testimony in DC may make or break AUD/USD’s intraweek downtrend.
Revenue-taking and a little bit of risk-taking may enhance AUD/USD again to the .6710 – .6720 earlier assist zone. If danger aversion dominates at this time’s market themes, then AUD/USD may make new weekly lows and dip to the .6650 minor psychological degree.
But when we see risk-taking or anti-USD sentiment within the subsequent buying and selling classes, then at this time’s “breakout” might flip right into a fakeout and enhance AUD/USD again as much as the .6720 – .6740 earlier areas of curiosity.