Australian Dollar, AUD/USD, RBA Minutes, Consumer Confidence – Talking Points
- Australian Dollar rises overnight despite a move lower across Wall Street equities
- RBA meeting minutes in focus against a rather sparse economic calendar for today
- AUD/USD briefly breaks above the 50-day SMA, will bulls attempt to clear it?
Tuesday’s Asia-Pacific Forecast
The risk-sensitive Australian Dollar gained overnight against the US Dollar despite a weak overnight performance on Wall Street. Small-cap stocks came under pressure, with the Russell 2000 index shedding 0.45% at the close. A rise in yields was a likely contributor to the downbeat performance, with selling across the government bond market. That saw the 10-year Treasury note’s yield rose above 1.6%, the highest this month.
Upbeat economic data out of China has been a recent bright spot in the global economic story this week. China’s industrial production and retail sales for October crossed the wires on Monday and beat analysts’ expectations while also improving from the prior month. The rosy prints were much needed as China faces a potential slowdown.
Crude oil moved slightly higher overnight after an intraday drop below the high-profile 80 handle was quickly bought up. Oil has faced pressure in recent weeks as optimism over the global economic recovery wanes. Oil is seen as one of the main inflationary drivers in global markets. That has brought political pressure on OPEC leaders – particularly from the United States.
Today’s economic calendar is rather sparse, with only the Reserve Bank of Australia’s latest meeting minutes set to cross the wires. RBA Governor Lowe will also speak, which may spur some movement in the Australian Dollar. This is the last round of minutes before next month’s meeting, which will be the last of the year. Inflation will be the key focus of Mr. Lowe’s comments today. The ANZ Roy Morgan consumer confidence index fell to 106.0 for the week ending November 14, down from 109.
AUD/USD Technical Forecast
AUD/USD rose overnight before pulling back after touch the 50-day Simple Moving Average. The upside comes after the formation of a Bullish Engulfing candlestick on the daily chart. Bulls may look to clear the key moving average, which would likely open further upside. Alternatively, a drop lower will see prices move back to the recent monthly low at 0.7276.
AUD/USD Daily Chart
Chart created with TradingView
— Written by Thomas Westwater, Analyst for DailyFX.com
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