26 Aug 2015
AUD/USD testing 0.71 handle, back to 0.7120 magnet
FXStreet (Guatemala) - FXStreet (Guatemala) - AUD/USD is currently trading at 0.7115 with a high of 0.7215 and a low of 0.7096.
RBA's Stevens was talking at the National Reform Summit and stressed the need for growth. He explained that, "Growth rates are not enough despite lower interest rates in any of our life times," and "Measures of consumer confidence are about average despite gloom in papers", as the key takes ways. It was a short speech given he is just there as an observer of the summit.
Meanwhile, there has been a fair bit of volatility again in AUD/USD, with most recently, offers came in thick and fast while the greenback was suffering else where towards the close of the US session. The Aussie was dropping along with EM's, commodities and stocks into the close as a bout of risk aversion came back on board following a minor recovery as investors unwound their safe haven placements in response to the PBoC's moves to control liquidity in the Chinese economy.
PBoC intervention
In addition to PBOC injecting 150bn yuan via 7-day reverse repos yesterday, the PBoC cut their RRR by 50bps to 18.00% with additional cuts for individual sectors. The Central Bank also cut the deposit rate by 25bps to 1.75% and lending interest rates by 25bps to 4.60%.
The greenback had been propped up also by the US data overnight with the highest US Consumer Confidence Index since January coming in at 101.5 vs consensus 93.4 along with better than expected Services PMI arriving in at 55.2 vs. consensus at 55.1.
Attention back on the Shanghai Composite Index
Attention shall now be on the Shanghai Composite Index of shares once again.
Then, for tomorrow, US Durable goods and the DOE crude oil inventories will be of keen interest, with estimates of a draw down of 354K bbls. Today, we had the API crude inventories for the week to August 21st, and as a guide for tomorrow, inventories fell by 7.3m bbls. We will also have more Fed talk from Dudley tomorrow.
AUD/USD technical outlook
Technically, the base of the two-year channel at 0.7180/60 has been like a magnet on the sticks but this gave way towards the end of the US session overnight. 0.7160 gave way to 0.7120 support. This has also given way but that remains compelling and a target for a minor recovery from the lows below the 0.71 handle that may continue to protect further downside for now.
On follow through, 0.7030 is the August low ahead of the 0.7016 March 2006 lows. These levels guard 0.7000 ahead of the 2004 June low of 0.6772 on the longer term targets.
RBA's Stevens was talking at the National Reform Summit and stressed the need for growth. He explained that, "Growth rates are not enough despite lower interest rates in any of our life times," and "Measures of consumer confidence are about average despite gloom in papers", as the key takes ways. It was a short speech given he is just there as an observer of the summit.
Meanwhile, there has been a fair bit of volatility again in AUD/USD, with most recently, offers came in thick and fast while the greenback was suffering else where towards the close of the US session. The Aussie was dropping along with EM's, commodities and stocks into the close as a bout of risk aversion came back on board following a minor recovery as investors unwound their safe haven placements in response to the PBoC's moves to control liquidity in the Chinese economy.
PBoC intervention
In addition to PBOC injecting 150bn yuan via 7-day reverse repos yesterday, the PBoC cut their RRR by 50bps to 18.00% with additional cuts for individual sectors. The Central Bank also cut the deposit rate by 25bps to 1.75% and lending interest rates by 25bps to 4.60%.
The greenback had been propped up also by the US data overnight with the highest US Consumer Confidence Index since January coming in at 101.5 vs consensus 93.4 along with better than expected Services PMI arriving in at 55.2 vs. consensus at 55.1.
Attention back on the Shanghai Composite Index
Attention shall now be on the Shanghai Composite Index of shares once again.
Then, for tomorrow, US Durable goods and the DOE crude oil inventories will be of keen interest, with estimates of a draw down of 354K bbls. Today, we had the API crude inventories for the week to August 21st, and as a guide for tomorrow, inventories fell by 7.3m bbls. We will also have more Fed talk from Dudley tomorrow.
AUD/USD technical outlook
Technically, the base of the two-year channel at 0.7180/60 has been like a magnet on the sticks but this gave way towards the end of the US session overnight. 0.7160 gave way to 0.7120 support. This has also given way but that remains compelling and a target for a minor recovery from the lows below the 0.71 handle that may continue to protect further downside for now.
On follow through, 0.7030 is the August low ahead of the 0.7016 March 2006 lows. These levels guard 0.7000 ahead of the 2004 June low of 0.6772 on the longer term targets.