AUD/USD may be finding support ahead of the RBA’s decision!
Will the pair make new December highs in the next trading sessions?
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
New Zealand’s overseas trade index dipped by -0.6% q/q in Q3 (-2.1% q/q forecast, 0.3% q/q previous) as export values (-6.0%) fell faster than import values (-4.3%)
Melbourne Institute inflation gauge for November: 4.4% y/y (5.1% y/y in October); monthly inflation at 0.3% m/m (-0.1% m/m in October)
ANZ-Indeed: Australia’s job ads dropped by 4.6% m/m in November, the fastest decline in more than two years
Australia’s company operating profits for Q3: -1.3% q/q (1.2% q/q forecast, -12.1% previous)
Germany’s trade surplus for October: 17.8B EUR (17.1B EUR forecast, 16.7BB EUR previous); Imports fell (-16.3% y/y) faster than exports (-8.1% y/y)
Switzerland’s CPI for November: -0.2% m/m (0.0% m/m forecast, 0.1% m/m previous)
The number of unemployed in Spain decreased by 24,573 in November, the second-largest November drop excluding the pandemic period
Price Action News
Overlay of CHF vs. Major Currencies Chart by TradingView
A bit of risk-taking early in the day kept CHF on the defensive in the earlier trading sessions.
The start of the European session wasn’t any kinder for the safe haven after Switzerland printed a weaker-than-expected CPI report that supported a rate hike pause for the Swiss National Bank (SNB).
CHF is currently in the red against all of its major counterparts. It’s seeing the most losses against JPY and USD and the least losses against CAD and GBP.
Upcoming Potential Catalysts on the Economic Calendar:
ECB President Lagarde to give a speech at 2:00 pm GMT
U.S. factory orders at 3:00 pm GMT
Tokyo’s core CPI at 11:30 pm GMT
RBA’s policy decision at 3:30 am GMT (Dec 5)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
AUD/USD 15-min Forex Chart by TradingView
Risk-taking took a chill pill during the Asian and early European sessions as traders prepared for this week’s potential catalysts.
AUD/USD, in particular, has dipped back down to the .6650 minor psychological level after turning lower from .6690.
What makes AUD/USD’s current levels interesting is that they’re not far from the Pivot Point and 200 SMA in the 15-minute time frame. AUD/USD is also potentially testing a resistance zone from the previous week.
Will last week’s resistance hold as support in the next trading sessions?
The Reserve Bank of Australia (RBA) is expected to maintain its interest rates at 4.35% even as the central bank keeps its hawkish bias.
If the prospect of a rate hike pause weighs on AUD amidst a relatively risk-friendly trading environment, then AUD/USD may dip to areas of interest like the .6650 psychological area or the S1 (.6620) Pivot Point line where it could draw in buyers.
But if today’s cautious mood extends to today’s U.S. and tomorrow’s Asian trading sessions, then AUD/USD may hit lower inflection points like last week’s .6600 lows before we see sustained AUD buying.
Unless we see game-changing headlines, though, AUD could still benefit from a relatively hawkish central bank and a generally risk-friendly trading environment. AUD/USD is more likely to extend last week’s upswing and probably make another play for last week’s .6690 highs.
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