Fresh positive U.S. data and upcoming Australian manufacturing data makes this simple support break on AUD/USD the one to watch today.
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Fresh Market Headlines & Economic data:
- Trump-Kim summit was cut short after North Korea demanded an end to sanctions
- U.S. economy grew faster than expected in Q4
- USTR to suspend China tariff hike ‘until further notice’
- Fed’s Clarida: Fed ‘especially’ tied to data as it pursues patient policy
- China factory activity shrinks to 3-year low in February, export orders worst in a decade
- U.K. House-Price Growth Still Subdued on Brexit, Nationwide Says
- Germany Consumer prices in February 2019: 1.6% rise on February 2018 expected
- Japan Industrial Output Falls 3.7% In January
- Japan Retail Sales Contract 2.3 Percent In January
- Australia Private Capital Expenditure Gains 2.0% In Q4
- Prices for products sold by Canadian manufacturers declined 0.3% in January
- ANZ’s latest Business Outlook survey shows a net 31% of survey respondents expect deteriorating conditions this year in New Zealand
- Swiss more gloomy about 2019 even as Q4 produced growth
- KOF Economic Barometer dropped to a reading of 92.4
- Chicago PMI surges in February as new orders jump
Upcoming Potential Catalysts on the Forex Calendar:
- Australia AIG Manufacturing Index at 9:30 pm GMT
- New Zealand building permits at 9:45 pm GMT
- New Zealand terms of trade at 9:45 pm GMT
- Japan core CPI at 11:30 pm GMT
- Japan unemployment rate at 11:30 pm GMT
- Japan Nikkei Manufacturing PMI at 12:30 am GMT (Mar. 1)
What to Watch: AUD/USD
AUD/USD just broke below a strong area of interest around 0.7130 today after the U.S. reported a better-than-expected Q4 2018 GDP read of 2.6% versus the expectation of 2.2% growth annualized. It was a nice pop for the Greenback off of the news and something to follow for the rest of the session, but looking forward, the next possible catalyst could be the latest update on Australian manufacturing sentiment coming at 9:30 pm GMT. Since this is a leading indicator on Australia’s economy, it could spark solid short-term volatility and momentum for the Australian dollar. And we’ve also got a read on Chinese manufacturing sentiment coming at 1:45 am GMT (Mar. 1) that could contribute volatility to the Aussie given the strong trading relationship between Australia and China.
Look out for those events soon and if Aussie PMI does come in weaker than the 52.5 previous read, that previously mentioned support area could easily be reached or even broken given the daily ATR of AUD/USD to be around 60 pips. Given the weaker data we’ve seen from Australia lately, a better-than-previous read would be an upside surprise and could spark an short-term rally in the Aussie that’s been beaten down in the last two sessions.
For the bears, a chunk of the move has already been made, so waiting for bounce to the consolidation area is a better potential return-on-risk. But of course, you have to consider that missing the move is a possibility.
For the bulls, an upside surprise from both Australia and China PMI’s could yield large move given the expectations for weakness, which could easily lead AUD/USD to an upside break of the consolidation area between 0.7130 – 0.7150.