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Positive data got nothin’ on Coronavirus scare last week! Can Aussie bulls recover some of their losses this week?
Here’s a list of catalysts that might turn the tides for the Aussie:
RBA’s policy statement (Feb 4, 3:30 am GMT)
- Reserve Bank of Australia (RBA) kept its rates at a record low of 0.75% in December
- AUD dropped on overall risk aversion and expectations that RBA might cut rates in 2020
- Traders see RBA’s rates remaining at 0.75% though there could be hints of further easing this year
- RBA’s quarterly monetary policy statement will be released on Friday (Feb 7) at 12:30 am GMT
Retail sales and trade balance (Feb 6, 12:30 am GMT)
- Retail trading jumped 0.9% in November – the fastest in two years – on Black Friday sales
- The positive report and risk-friendly environment boosted AUD across the board
- Markets expect retail sales to dip by 0.2% in December
- Australia’s trade surplus widened from 4.08B AUD to 5.80B AUD in November, as exports rose by 2.0% while imports fell by 3.0%
- AUD popped up and stayed up until the start of London session trading
- Analysts see the surplus widening further to 5.95B AUD in December
China’s market performance
- Traders will be watching China’s markets, which will open for the first time since the Coronavirus scare blew up
- China will print its Caixin manufacturing PMI (Feb 3, 1:45 am GMT) and services PMI (Feb 5, 1:45 am GMT)
- China will also release its trade balance data on Friday during the Asian session
Overall risk appetite
- Watch out for updates on the impact of Coronavirus on global travel and trade restrictions
- NFP-related reports can also affect demand for the high-yielding Aussie this week
Technical snapshot
- RSI considers AUD as “oversold” against CHF, JPY, USD, EUR, and GBP
- Stochastic and Williams %R see AUD as “oversold” against CAD, CHF, JPY, USD, EUR, and GBP
- Daily time frame Bollinger Bands are flagging AUD’s “oversold” conditions against CHF, EUR, and GBP
- Keltner Channels are pointing at AUD’s “oversold” status against CHF, JPY, USD, EUR, and GBP
- AUD/CAD, AUD/CHF, AUD/JPY, and AUD/USD are all trading below their short and long-term SMAs on the daily
- EUR/AUD and GBP/AUD are trading above their short and long-term SMAs on the daily
- AUD/NZD is trading above its 5 SMA but below its 20, 50, and 200 SMAs
Missed last week’s price action? Read AUD’s price recap for January 27 – 31!