We’re seeing downbeat data from Australia and China, but can risk-taking continue to prop AUD/CHF higher?
Here are the levels I’m watching.
Before moving on, ICYMI, yesterday’s watchlist looked at AUD/JPY’s double bottom breakout on a return in risk appetite. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. CB consumer confidence index dipped from 102.2 to 100.2 in Nov
New Zealand building consents slumped 10.7% m/m in Oct
Japanese preliminary industrial production down 2.6% m/m in Oct
New Zealand ANZ business confidence index slipped from -42.7 to -52.1 in Nov
U.K. BRC price shop index improved from 6.6% to 7.4% y/y in Nov
Australian CPI tumbled from 7.3% to 6.9% y/y in Oct vs. 7.6% forecast
Chinese official manufacturing PMI down from 49.2 to 48.0 in Nov
Chinese official non-manufacturing PMI fell from 48.7 to 46.7 vs. 48.0 forecast
Upcoming Potential Catalysts on the Forex Economic Calendar:
Eurozone flash CPI estimates at 10:00 am GMT
U.S. ADP non-farm employment change at 1:15 pm GMT
U.S. preliminary GDP at 1:30 pm GMT
U.S. JOLTS job openings at 3:00 pm GMT
Fed head Powell’s speech at 6:00 pm GMT
U.S. Fed Beige Book at 7:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/CHF
AUD/CHF 1-hour Forex Chart
This pair has been pacing back and forth inside its range on the hourly time frame, and another test of resistance is taking place.
Will it bounce or break this time?
A pickup in risk-taking thanks to easing concerns about China’s COVID lockdowns was enough to take AUD/CHF back to its range resistance at the .6400 handle recently.However, weaker than expected data from both the Land Down Under and China might be enough to draw bears back in the game.
Australia reported a drop in price levels from 7.6% to 6.9% year-over-year in October, dampening the odds of another aggressive RBA rate hike in their next meeting.
Meanwhile, China’s PMI readings both came in below expectations, reflecting sharper contractions in both manufacturing and services sectors.
Technical indicators are giving mixed signals, though. The 100 SMA is above the 200 SMA to hint that there’s a chance for a bullish breakout and a potential rally that’s the same height as the range.
However, Stochastic is closing in on the overbought region to signal exhaustion among buyers. Turning lower would confirm that another move back to the .6300 support might follow.
Don’t forget to keep tabs on headlines that influence market sentiment, as well as China’s Caixin PMI readings in the next session!
