Risk aversion is dragging risk assets lower today!
Will the downswing break AUD/USD’s short-term uptrend?
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:
BusinessNZ services index lower from 54.7 to five-month low of 51.2 in July
Rightmove: UK house prices drop for first time this year
Japan’s GDP expands by 0.5% in Q2 after Covid curbs lifted
New home prices in China’s 70 major cities dropped by 0.9% y/y in JulyChina’s July industrial production grew by 3.8% y/y vs. 4.6% expected, 3.9% previous
China’s fixed-asset investment up by 5.7% ytd/y vs. 6.2% expected, 6.1% previous
China’s retail sales improved by 2.7% y/y vs. 5.0% expected, 3.1% growth in June
China’s urban unemployment rate at 5.4% in July, the lowest since January
PBOC unexpectedly cuts interest rates by 10 bps to 2.75%
Japan’s final industrial production up by 9.2% in June vs. 7.5% uptick in May
AUD and NZD lower on China, Fed, and RBNZ meeting concerns
Dollar gains on safety flows after China data, yuan eases on rate cut
Stocks struggle as China rate cut sends oil tumbling
Upcoming Potential Catalysts on the Forex Economic Calendar:
French and Italian banks out on bank holiday
CA manufacturing sales at 12:30 pm GMT
CA wholesale sales at 12:30 pm GMT
US NY manufacturing index at 12:30 pm GMT
RBA’s meeting minutes at 1:30 am GMT (Aug 16)
UK’s labor market data at 6:00 am GMT (Aug 16)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/USD
AUD/USD 1-hour Forex Chart
In case you missed it, AUD bulls got an extra boost last week when Uncle Sam’s CPI numbers hinted at “peak inflation” and possibly a less hawkish path for the Fed.
The party ended earlier today, though, thanks to a bunch of data missed from China, the world’s second largest economy and one of Australia’s biggest export markets. The People’s Bank of China (PBOC) even surprised markets with a small interest rate cut!
All the bad vibes dragged on AUD/USD enough that the pair is now trading closer to the .7050 minor psychological handle.As you can see, .7050 lines up with a previous resistance zone and is not far from the 61.8% Fibonacci retracement and trend line support on the 1-hour time frame.
Can AUD/USD extend its uptrend?
Look out for more selling if today’s bearish market themes don’t lose traction. AUD/USD could dip closer to its trend line and 200 SMA support before finding enough buyers.
The Reserve Bank of Australia (RBA) will also print its meeting minutes during the Asian session and word around is that traders will pay verrry close attention to the central bank’s inflation and growth forecasts.
Estimates that point to lower growth could weigh on AUD/USD and drag it below its support zone. Meanwhile, not-so-gloomy growth forecasts or a bout of risk-taking may extend AUD/USD’s short-term uptrend.
