Today’s jump in Coronavirus cases in the Hubei region is bringing bears to the Aussie’s yard today. What do you think of this trend trade?
Fresh Market Headlines & Economic Data:
- US budget deficit on track to hit $1 trillion for first time since 2012
- Powell says Fed will aggressively use QE to fight next recession
- Central Banks Adopt Cautious Outlook on Coronavirus
- Japan’s producer prices rise further in January
- MI: Australia’s inflation expectations fall, pay expectations remain weak
- UK house prices rise for first time since July 2018
- China’s Hubei reports 14,840 new cases, 242 additional deaths
- Coronavirus death toll leaps in China’s Hubei province, party bosses sacked
Upcoming Potential Catalysts on the Forex Calendar:
- Germany’s final CPI at 7:00 am GMT
- EU economic forecasts at 10:00 am GMT
- U.S. CPI report at 1:30 pm GMT
- U.S. weekly unemployment claims at 1:30 pm GMT
What to Watch: AUD/USD
The biggest story during the Asian session is the Hubei province reporting 14,840 new confirmed Coronavirus cases after China adopted a new diagnosis classification. For comparison, there were only 1,638 new cases from the area yesterday. Yikes!Now that most of the major central bankers have shared their two cents, it makes sense for markets to turn their focus back on the disease that’s threatening global growth. Unfortunately, it doesn’t look like we’ll see the end of the theme anytime soon.
This is why AUD/USD’s downtrend is more interesting today.
If you believe that risk-averse theme from today’s Coronavirus headlines is just getting started, then you can jump in on AUD/USD’s downtrend and aim for new February lows. That’s below .6670, yo!
If you’re betting on weak U.S. CPI numbers, however, or if you think that the 1-hour SMAs will provide enough support until a new economic theme overshadows the Coronavirus headlines, then you can also buy during a consolidation and aim for a pullback to the .6740 previous highs.