Kicking off the new week with huge risk-off vibes stemming from Asia, which puts the strong momentum in AUD/USD at the top of the watchlist to potentially catch short-term pips.
|Equity Markets||Bond Yields||Commodities & Crypto|
|DAX: 13241.53 -2.47%
FTSE: 7417.17 -2.23%
S&P 500: 3245.43 -1.52%
DJIA: 28558.82 -1.49%
|US 10-yr 1.617% -0.062
Bund 10-YR -0.379% -0.049
UK 10-YR: 0.398% -0.024
JPN 10-YR: -0.043% -0.03
|Oil: 53.29 -1.66%
Gold: 1579.60 +0.49%
Bitcoin: 8765.71 +1.07%
Etherium: 170.14 +0.70%
Fresh Market Headlines & Economic Data:.
- Mayor of Wuhan, epicenter of coronavirus outbreak, says 5 million people left the city before travel restrictions were imposed
- Three rockets hit US Embassy compound in Baghdad, US official says
- China confirms 2,700 cases of virus, 40 counted elsewhere
- Wall Street opens 1% lower on growing China virus fears
- Oil drops below $60 as China virus stokes demand concern
- The Conference Board Leading Economic Index (LEI) for China increased 1.4% in December 2019 to 154.2
- The ifo Business Climate Index fell from 96.3 points in December to 95.9 points in January
- Gross mortgage lending across the U.K. residential market in December 2019 was -1.1% y/y to £22.2 billion
Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:
- Japan Services Producer prices index at 11:50 pm GMT
- Australia NAB Business confidence at 12:30 am GMT (Jan. 28)
- Bank of Japan Core CPI at 5:00 am GMT (Jan. 28)
What to Watch: AUD/USD
In case you haven’t caught up yet, traders are in big time risk aversion mode as more bad news on the Coronavirus outbreak continues to hit the wires. Most notable that seems to have traders running to safe havens was the story of how 5 million people left the epicenter before travel restrictions were imposed, obviously raising speculation this outbreak is much more widespread than reported.
Safe havens like the Greenback have already benefited on session, while risk currencies like the the Aussie (and the major currency most likely affected by this outbreak given Australia’s strong economic ties with China) have fallen off quickly, which could still be the case through the rest of the Monday session & Asia session given the lack of schedule major catalysts ahead.
With that said, we’re watch AUD/USD today, which has already made more than a full daily ATR move lower since the week open (0.6814) before bottoming out around 0.6765. This area is one of minor significance given that it was a Nov. 2019 low before a big rally higher, and if it breaks lower, it could draw in more momentum traders to target the next support area around 0.6725.
If this area holds and the market bounces, shorting up to the 0.6800 major psychological area is a valid entry strategy if the current themes hold, and one for the more prudent traders who like to go after higher risk-to-reward returns.