Australian Dollar reverse gains opening at one-week lows

OFX Daily Market News

Posted by OFX

AUD – Australian Dollar

In the absence of any local data on Thursday the Aussie flirted within a 30-pip range against the Greenback and struggled to hold on to small gains above the 68c mark. Worth noting risk sentiment has deteriorated in the past 24-48 hours as the U.S senate passed two bills to back protesters in Hong Kong which has angered China and crushed any hopes of a partial trade deal between the two countries that have been at war from months.

Looking ahead, locally we see the release of Flash Manufacturing and Flash Services PMI and with the US-China trade war still front and centre we could see limited upside for the pair as the Aussie is highly leveraged to the Chinese economy. From a technical perspective, we see initial support at 0.6770 followed by 0.6720, on the flip side, strong resistance is sitting at 0.6830.

Key Movers

Sterling is lower on the back of a stronger US dollar across the board, the GBP/USD has reversed all gains from earlier on in the week and has dropped from 1.2969 to 1.2904. The Euro is another currency that relinquished all gains falling from 1.1097 down to 1.1052 following the ECB Monetary Policy Meeting Accounts. European Central Bank’s Luis de Guindos comments were interpreted that a cut to deposit rate is still on the cards next year.

Meanwhile, in the US we saw a few macro releases, the Philadelphia Fed survey picked up a little in November rising to 10.4 from 5.6 in October which was well above market expectations. Also, the number of Americans claiming unemployment benefits were flat at 227k for the week, these numbers are still sitting at five-month highs.

Expected Ranges

AUD/USD: 0.6720 – 0.6830 ▼

AUD/EUR: 0.6000 – 0.6160 ▼

GBP/AUD: 1.8900 – 1.9180 ▲

AUD/NZD: 1.0550 – 1.0660 ▲

AUD/CAD: 0.8960 – 0.9070 ▼


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