Did risk takers get spooked by the downbeat Chinese PMI readings?
Or will Aussie bulls be gearing up for another RBA hike?
Here are the support levels I’m watching on AUD/USD.
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:
Australia’s MI inflation gauge slowed from 0.5% to 0.4% in October
Australian private sector credit rose 0.7% in Oct, following 0.8% increaseAustralia’s retail sales increased by another 0.6% vs. 0.5% forecast in Sept
Chinese official manufacturing PMI fell from 50.1 to 49.2 in Oct vs. 49.9 consensus
Chinese official non-manufacturing PMI down from 50.6 to 48.7 vs. 50.2 consensus
Japanese consumer confidence index slumped from 30.8 to 29.9 in Oct
Japanese housing starts slowed from 4.6% to 1.0% growth in Sept
German retail sales rebounded by 0.9% vs. projected 0.5% dip in Sept
Swiss retail sales accelerate from 3.0% to 3.2% y/y in Sept
Upcoming Potential Catalysts on the Forex Economic Calendar:
Eurozone flash CPI readings at 10:00 am GMT
Eurozone preliminary flash GDP at 10:00 am GMT
U.S. Chicago PMI at 1:45 pm GMT
RBA monetary policy statement at 3:30 am GMT (Nov. 1)
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
This week is off to a bit of a slow start, but I think we’re about to see fireworks on AUD/USD soon!
This pair looks ready to test the confluence of support levels around a short-term rising trend line, 200 SMA dynamic support, and 61.8% Fibonacci retracement level.So far, the Aussie is under a bit of selling pressure after the Chinese official PMI readings turned out weaker than expected, reflecting a slowdown in both manufacturing and services sectors for October.
However, buyers might take this as an opportunity to hop in at better levels ahead of the RBA monetary policy decision.
After all, the Australian central bank is widely expected to announce another 0.25% interest rate hike in order to combat rising inflation.
Technical indicators are looking mixed, though. The 100 SMA is above the 200 SMA to signal that the path of least resistance is to the upside, but Stochastic is closing in on the overbought zone to reflect exhaustion among buyers.
Just keep your eyes peeled for bearish candlesticks below the support zone since these might confirm that a downtrend is due!
