Asia-Pacific Shares Track Wall Street Higher on Hopes of Massive New US Stimulus

The major Asia-Pacific stock indexes were mixed but mostly higher on Thursday with Hong Kong giving back a portion of this week’s stellar gains. Shares in the region rose after stocks on Wall Street soared to record highs as U.S. President Joe Biden was sworn into office.

Investors are hopeful the incoming Biden administration will be able to secure passage of a massive new stimulus package to cushion the economic damage of the COVID-19 pandemic.

Republicans in the U.S. Congress have indicated they are willing to work with President Joe Biden on his administration’s top priority, a $1.9 trillion U.S. fiscal stimulus plan, but some are opposed to the price tag. Democrats took control of the U.S. Senate on Wednesday, though they will still need Republican support to pass the program.

But after record high closes on Wall Street Wednesday, markets in Asia reflected relief over an orderly transition of power and strong expectations that U.S. stimulus will provide continued support for global assets.

Cash Market Performances

In the cash market on Thursday, Japan’s Nikkei 225 Index settled at 28756.86, up 233.60 or +0.82%. Hong Kong’s Hang Seng Index finished at 29927.76, down 34.71 or -0.12% and South Korean’s KOSPI Index closed at 3160.84, up 46.29 or +1.49%.

China’s Shanghai Index settled at 3621.26, up 38.17 or +1.07% and Australia’s S&P/ASX 200 Index finished at 6823.70, up 53.30 or +0.79%.

Hong Kong Stocks Snap 5-Day Winning Streak on Profit-Taking

Hong Kong stocks ended lower on Thursday, snapping a five-day winning streak, as investors locked in profits following sharp gains helped by strong demand from mainland investors.

Bank of Japan Leaves Interest Rates Unchanged Amid Gloomy Outlook

The Bank of Japan (BOJ) left its main policy unchanged after forecasting the economy will regain more lost growth than previously thought once it starts to recover from the current state of emergency.

The BOJ held its interest rate and asset buying setting intact, according to a statement from the central bank on Thursday. All 44 economists surveyed by Bloomberg predicted no change in the bank’s main policy levers ahead of a policy review in March.

Market participants showed scant reaction to the largely in-line outcome of the meeting, with stocks and the Japanese Yen little changed from levels before the decision.

Australia’s Unemployment Rate Drops to 6.6 Percent as 30,000 More People Find Work

Australia’s unemployment rate has dropped to 6.6 percent as 30,000 more Australians found work in the wake of the COVID-19 pandemic.

New data from the Australian Bureau of Statistics (ABS) showed that for December 2020, the number of employed people in the country was a figure 784,000 higher than it was in May.

Despite the dramatic recovery, the total number of employed people was still down year-on-year because of mass COVID-19 layoffs.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Daily Forecast – Australian Dollar Remains Strong

AUD/USD Video 21.01.21.

Australian Dollar Moves Higher Against U.S. Dollar

AUD/USD is currently trying to settle above the resistance at 0.7760 while the U.S. dollar remains under pressure against a broad basket of currencies.

The U.S. Dollar Index has managed to get below the support at the 20 EMA at 90.35 and is trying to develop additional downside momentum. If this attempt is successful, the U.S. Dollar Index will move closer to the 90 level which will be bullish for AUD/USD.

Australia has recently reported that Unemployment Rate declined from 6.8% in November to 6.6% in December. Analysts expected that Unemployment Rate would decline to 6.7%. Meanwhile, Employment Change report indicated that employment increased by 50,000 in December, in line with analyst forecasts.

Today, foreign exchange market traders will also focus on the employment data from the U.S. Initial Jobless Claims report is expected to show that 910,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are expected to increase from 5.3 million to 5.4 million.

Joe Biden’s stimulus plan has recently provided material support to commodity-related currencies, including Australian dollar. If traders continue to focus on the upcoming stimulus, Australian dollar may get additional support.

Technical Analysis

aud usd january 21 2021

AUD/USD managed to settle above the resistance at 0.7740 and is trying to settle above the next resistance level at 0.7760. RSI remains in the moderate territory so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If AUD/USD settles above 0.7760, it will get to another test of the next resistance level at 0.7780. A move above this level will push AUD/USD towards the resistance at 0.7800. In case AUD/USD gets above the resistance at 0.7800, it will move towards the next resistance level which is located at January highs at 0.7820.

On the support side, the previous resistance at 0.7740 will likely serve as the first support level for AUD/USD. A move below this level will push AUD/USD towards the support at 0.7725. If AUD/USD declines below 0.7725, it will move towards the 20 EMA at 0.7705.

For a look at all of today’s economic events, check out our economic calendar.

The U.S Dollar Hits Reverse Ahead of the ECB Monetary Policy Decision and Press Conference

Earlier in the Day:

It’s was a relatively busy start to the day on the economic calendar this morning. The Aussie Dollar and the Japanese Yen were in action early this morning.

Later this morning, the Bank of Japan delivers its first monetary policy decision of the year. While the markets expect the BoJ to continue to leave policy unchanged, the latest wave of the pandemic will be a concern.

Vaccination rates will need to materially pick up globally, not just in Japan, to support a sustained economic recovery.

Away from the economic calendar, sentiment towards the U.S economic outlook provided direction early on. Hopes of significant fiscal support drove demand for riskier assets early on.

For the Japanese Yen

The trade surplus widened from ¥366.1bn to ¥751.0bn in December 2020. Economists had forecast a widening to ¥942.8bn.

According to the Ministry of Finance,

  • Exports rose by 2.0% in the month of December, while imports slid by 11.6%.
  • For the calendar year, 2020, exports slid by 11.1%, with imports tumbling by 13.8% to leave the trade surplus at ¥674.73bn.

By geography,

  • Exports to Asia fell by 5.1%, in spite a 2.7% increase of exports to China. Imports from Asia saw a more marked 7.5% decline in the calendar year 2020.
  • To the U.S, exports tumbled by 17.3%, with imports from the U.S sliding by 14.0%.
  • Exports to Europe slid by 15.1%, driven by sizeable declines to Germany (-14.9%) and the UK (-24.3%). Imports fell by 13.7 from Europe in the calendar year.

The Japanese Yen moved from ¥103.547 to ¥103.572upon release of the figures. At the time of writing, the Japanese Yen was down by 0.01% to ¥103.55 against the U.S Dollar.

For the Aussie Dollar

Employment figures were in focus this morning.

According to the ABS,

  • Employment rose by 50k in December, following a 90.0k increase in November, which was in line with forecasts.
  • Full employment increased by 37.5k, following an 84.2k jump in November.
  • As a result, the unemployment rate slipped from 6.8% to 6.7%, while the participation rate rose from 66.1% to 66.2%.
  • Employment finished the year 0.7% below the March level, having fallen 6.7% between March and May.
  • The recovery in employment was largely as a result of a more marked recovery in part-time employment, however.

The Aussie Dollar moved from $0.77551 to $0.77516 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.27% to $0.7768.

Elsewhere

At the time of writing, the Kiwi Dollar was up by 0.31% to $0.7194.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. There are no material stats due out of the Eurozone to provide the EUR with direction.

While there are no stats, the ECB is scheduled to deliver its first monetary policy decision of the year.

With the markets expecting the ECB to stand pat on policy, the ECB press conference will likely be the key driver.

Last week, ECB President Lagarde stood by the ECB’s growth forecasts for this year, in spite of extended lockdown measures.

We can expect plenty of discussion on price stability and the outlook during the presentation and the Q&A.

Away from the economic calendar, COVID-19 vaccine news along with the latest COVID-19 figures will provide direction.

At the time of writing, the EUR was up by 0.16% to $1.2125.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. CBI Industrial Trend Orders are due out later today.

With little else for the markets to consider, expect the stats to influence.

Ultimately, however, COVID-19 news updates will likely remain the key driver near-term.

At the time of writing, the Pound was up by 0.15% to $1.3674.

Across the Pond

It’s a busy day ahead on the economic calendar. Key stats include the weekly jobless claims figures and December’s Philly FED Manufacturing PMI.

Housing sector data for December, including building permits and housing starts are also due out. These will likely have a muted impact on risk sentiment, however.

Away from the economic calendar, President Biden’s first moves as U.S President together with COVID-19 news will also influence.

At the time of writing, the Dollar Spot Index was down by 0.15% to 90.340.

For the Loonie

It’s a quiet day on the economic data front. Economic data is limited to house price figures that will likely have a muted impact on the Loonie.

Chatter from Capitol Hill and COVID-19 news will be the key drivers on the day, with little else for the markets to consider.

At the time of writing, the Loonie was up by 0.13% to C$1.2620 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD and NZD/USD Fundamental Daily Forecast – ‘Risk On’ Sentiment Chasing Out Weak Short-Sellers

The Australian and New Zealand Dollars are trading higher on Wednesday helped by a weaker U.S. Dollar and the hope of huge fiscal stimulus from the Biden administration to combat the effects of coronavirus on the economy. Meanwhile, the economic news in Australia remained mostly positive.

At 10:53 GMT, the AUD/USD is trading .7733, up 0.0035 or +0.45% and the NZD/USD is at .7137, up 0.0020 or +0.28%.

Traders are now looking forward to the inauguration of President Joe Biden at 17:01 GMT and a speech that follows. Early Thursday, Australia will release its latest data on Employment Change and the Unemployment Rate. Early Friday, New Zealand will release its latest report on consumer inflation.

More US Fiscal Stimulus to Come

Demand for riskier currencies is being supported by a declaration from Janet Yellen, U.S. President-elect Joe Biden’s nominee for Treasury Secretary, that the government had to “act big” on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of a higher debt burden.

Yellen also said that the value of the dollar should be determined by markets, a break from departing President Donald Trump’s desire for a weaker U.S. currency.

“The United States does not seek a weaker currency to gain competitive advantage and we should oppose attempts by other countries to do so,” she said.

Australian Consumer Confidence Clouded by COVID-19 in January Survey

A measure of Australian consumer sentiment slipped from a decade high in January as new outbreaks of COVID-19 in Sydney and Brisbane spooked people, though the spread has now been contained with relatively few cases and no deaths, Reuters Reported.

The Westpac-Melbourne Institute Index of Consumer Sentiment released on Wednesday fell 4.5% in January, from December, when it rose 4.1%.

The index is still 41% above a nadir hit back in April when COVID-19 lockdowns were at their height, and 14.6% up on January last year. At 107.0, the index implies optimists clearly outnumber pessimists.

“A pullback in the index was to be expected,” said Westpac’s chief economist, Bill Evans. “Since the last survey we have seen domestic border closures; the emergence of COVID clusters in some states; and the sharp upswing in COVID cases overseas, notably the U.S. and the U.K.”

Daily Forecast

A surge in debt-funded spending would be a positive for the global economy and commodity prices, while more money-printing could put pressure on the U.S. Dollar.

Commodities saw the benefit with oil prices climbing anew, while an auction of dairy, New Zealand’s biggest export earner, produced a sharp 4.8% rise in prices.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Price Forecast – Australian Dollar Continues to Grind Higher

The Australian dollar has rallied a bit during the trading session on Wednesday as we continue to see more of a grind to the upside. The Aussie of course is part of the “reflation trade”, and therefore I believe that the Australian dollar probably continues to be bullish more than anything else, but at this point in time I think that what we are looking at is a little bit of exhaustion, perhaps the market will try to build a bullish flag here.

This does not mean that I am willing to sell this market, just that I am not expecting a lot over the next few sessions.

To the upside, I believe that the 0.80 level is the target, but it will take a while to get to that area. In time will more than likely be bought into as they offer value, extending all the way down to the 0.75 handle, especially as the 50 day EMA has broken above that region.

However, I do recognize that this probably comes down to stimulus more than anything else, so that is worth paying attention to. Stimulus of the United States will continue to weaken the US dollar but there are some questions about whether or not Joe Biden can get a huge package through Congress, and as long as that is the concern it will more than likely cause a bit of hesitation.

However, once it is all said and done, there will be a lot of stimulus, and therefore it is likely that we will continue to see buyers on these dips regardless. I have no interest in trying to short this market anytime soon.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Daily Forecast – Australian Dollar Continues To Rebound Against U.S. Dollar

AUD/USD Video 20.01.21

AUD/USD gained upside momentum and is trying to settle above the resistance at 0.7740 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle below the nearest support level at the 20 EMA at 90.35. If this attempt is successful, the U.S. Dollar Index will move towards the psychologically important 90 level which will be bullish for AUD/USD.

Today, Australia reported that Consumer Confidence declined from 112 in December to 107 in January. Australia’s economy enjoyed a significant rebound thanks to the country’s success in virus containment and the economic strength of its main trading partner, China, so it remains to be seen whether the recent decline of Consumer Confidence is a start of a new downside trend.

Tomorrow, foreign exchange market traders will focus on employment reports from Australia. Employment Change report is expected to show that employment increased by 50,000 in December, while Unemployment Rate is projected to decline from 6.8% to 6.7%.

Technical Analysis

AUD/USD managed to get above the resistance at 0.7725 and is trying to settle above the next resistance level at 0.7740. If this attempt is successful, AUD/USD will move towards the next resistance level which is located at 0.7760.

In case AUD/USD gets above the resistance at 0.7760, it will head towards the resistance at 0.7780. A move above this level will open the way to the test of the resistance at 0.7800.

On the support side, a move below 0.7725 will push AUD/USD towards the next support level at the 20 EMA at 0.7700. In case AUD/USD declines below this level, it will head towards the next support level at 0.7675. A successful test of this level will open the way to the test of the support at 0.7660.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Forex Technical Analysis – Sellers Could Try to Form Secondary Lower Top at .7740

The Australian Dollar is edging higher on Wednesday despite weaker than expected consumer confidence in January. A measure of Australian consumer sentiment slipped from a decade high in January as new as new outbreaks of COVID-19 in Sydney and Brisbane spooked people, though the spread has now been contained with relatively few cases and no deaths, according to Reuters.

At 06:39 GMT, the AUD/USD is trading .7736, up 0.0038 or +0.49%.

The Westpac-Melbourne Institute Index of Consumer Sentiment released on Wednesday fell 4.5% in January, from December, when it rose 4.1%.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The main trend changed to down when sellers took out .7666 on Monday. A trade through .7805 will change the main trend to up.

The minor range is .7820 to .7659. Its 50% level at .7740 is a potential upside target. Since the main trend is down, sellers could come in on a test of this level.

The short-term range is .7339 to .7820. If the selling pressure continues then look for the move to possibly extend into its 50% level at .7579.

The major retracement zone support comes in at .7405 to .7308.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD into the close on Wednesday will be determined by trader reaction to .7740. Sellers are going to try to form a secondary lower top following a test of this level.

Bearish Scenario

A sustained move under .7740 will indicate the presence of sellers. If this move creates enough downside momentum then look for a breakdown under .7659 and a possible test of the main bottom at .7643. Taking out this level will reaffirm the downtrend.

Bullish Scenario

A sustained move over .7740 will signal the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into .7805. Taking out this main top will change the main trend to up with .7820 the next upside target.

For a look at all of today’s economic events, check out our economic calendar.

Inauguration Day and the Bank of Canada Put the Greenback and the Loonie in Focus

Earlier in the Day:

It’s was a relatively busy start to the day on the economic calendar this morning. The Aussie Dollar and the PBoC were in action early this morning.

For the Aussie Dollar

The Westpac Consumer Confidence Index fell by 4.5% to 107.0 in January. In December, the Index had stood at 112.0.

According to the January report,

  • Domestic border closures and COVID-19 clusters together with a sharp rise in new COVID-19 cases overseas weighed on sentiment.
  • In spite of the fall, the index is up by 14.6% from a year ago and stood 41.5% higher than the pandemic low last April.

Looking at the key components:

  • Economic conditions next 12-months slid by 8.3%, with family finances vs a year ago falling by 7.0%.
  • In spite of the decline both were up compared with a year ago.
  • Family finances next 12-months saw a more modest 0.3% decline, with economic conditions next 5-years down by 4.5%.
  • Compared with this time last year, economic conditions next 5-years was up by 31.6%, with economic conditions next 12-months up by 21.1%.
  • Time to buy a major household item was down by 2.8%, while up by 4.8% compared with this time last year.
  • Time to buy a dwelling bucked the trend, however, rising by 0.2%. This was supported by sentiment towards house prices.
  • The House Price Expectations Index increased by 1.1%.
  • Sentiment towards unemployment was disappointing, however. The Unemployment Expectations Index was up by 11.9%, while down by 11.2% compared with a year ago.

The Aussie Dollar moved from $0.77100 to $0.77102 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.21% to $0.7711.

From China

This morning, the PBoC left loan prime rates unchanged in the central bank’s first monetary policy decision of the year.

In line with market expectations, the 1-year LPR remained unchanged at 3.85%, with the 5-year unchanged at 4.65%.

The Aussie Dollar moved from $0.77026 to $0.77072 upon announcement of the decision.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.13% to ¥103.77 against the U.S Dollar, with the Kiwi Dollar up by 0.04% to $0.7125.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. German wholesale inflation figures for December and finalized December inflation figures for the Eurozone are due out later today.

Barring marked revision from prelim Eurozone inflation figures, we don’t expect the stats to have too much influence, however.

Away from the economic calendar, COVID-19 vaccine news along with the latest COVID-19 figures and Italian politics will provide direction.

At the time of writing, the EUR was up by 0.10% to $1.2141.

For the Pound

It’s a relatively busy day ahead on the economic calendar. December inflation and wholesale inflation figures are due out of the UK later today.

A pickup in inflationary pressures should deliver support for the Pound. Wholesale inflationary pressures will also need to see a pickup, however.

While the stats will influence, the market focus will remain on the UK Government’s progress towards ending the COVID-19 pandemic.

At the time of writing, the Pound was up by 0.12% to $1.3647.

Across the Pond

It’s yet another particularly quiet day ahead on the economic calendar. There are no material stats to provide the Greenback and the broader markets with direction.

The lack of stats will leave the Greenback in the hands of chatter from Capitol Hill and COVID-19 news.

It’s Inauguration Day, so expect market focus to be on Capitol Hill. Upon entering the Oval Office, Biden is expected to begin repealing Trump policy.

At the time of writing, the Dollar Spot Index was down by 0.12% to 90.388.

For the Loonie

It’s a busy day on the economic data front. December inflation figures are due out ahead of the Bank of Canada’s first monetary policy decision of the year.

With the markets likely to hold out for the BoC rate statement and press conference, inflation figures will likely have a relatively muted impact on the Loonie.

Rising crude oil prices and optimism towards the economic outlook is likely to leave the BoC in a holding pattern. It remains to be seen, however, whether there’s any hawkish chatter.

At the time of writing, the Loonie was up by 0.11% to C$1.2721 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Price Forecast – Australian Dollar Continues to Show Strength

The Australian dollar has rallied a bit against the US dollar during the early hours on Tuesday. That being said, the market is still very much in an uptrend so this should not be a huge surprise, and with the Senate confirmation hearing of Janet Yellen coming, it is very likely that traders will be looking for any reason they can to extrapolate that she is going to be extraordinarily dovish, which is historically true anyway. With this being the case, traders are going to be looking at the possible reflation trade, meaning that they will be looking towards commodities and that is often seen as a reason to get long of the Aussie dollar itself.

AUD/USD Video 20.01.21

To the downside, the 0.75 level is an area that a lot of people will pay attention to due to the fact that it is a large, round, psychologically significant figure, and of course an area that features the 50 day EMA and previous support anyway. That being the case, we do pull back towards that area think that a lot of people will be looking to take advantage of “cheap Aussie dollars”, and thereby buy the dip.

I do not really have a scenario in which I am looking to sell the Australian dollar anytime soon, but it is worth noting that we are somewhat stretched at these levels, so a little bit of choppy and back and forth behavior would make quite a bit of sense. To the upside, I believe that eventually the Australian dollar will go looking towards the 0.0 level, an area that obviously is a large, round, psychologically significant figure as well.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Daily Forecast – Resistance At 0.7725 In Sight

AUD/USD Video 19.01.21.

Australian Dollar Gains Ground Against U.S. Dollar

AUD/USD is moving towards the resistance level at 0.7725 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to get below the support level at 90.70 and is moving towards the next support at 90.50. A move below the support at 90.50 will push the U.S. Dollar Index towards the next support level at the 20 EMA at 90.35 which will be bullish for AUD/USD.

Today, Australia reported that New Home Sales increased by as much as 26.2% month-over-month in December. Australia’s New Home Sales have started to grow in June 2020 when the country’s economy began to recover from the blow dealt by the coronavirus pandemic.

Various stimulus measures in combination with the country’s success in virus containment managed to halt a multi-year decline in New Home Sales and pushed them to multi-year highs.

Technical Analysis

aud usd january 19 2021

 

AUD/USD managed to get above the resistance at 0.7700 and is moving towards the next resistance level at 0.7725. From a big picture point of view, AUD/USD failed to settle below the 20 EMA near 0.7690 so it has good chances to get back to the upside mode.

RSI declined from the highs that were reached at the beginning of this year, and there is plenty of room to gain upside momentum in case the right catalysts emerge.

If AUD/USD settles above the resistance at 0.7725, it will move towards the next resistance level at 0.7740. A successful test of the resistance at 0.7740 will push AUD/USD towards the resistance at 0.7760. In case AUD/USD manages to settle above the resistance level at 0.7760, it will head towards the resistance at 0.7780.

On the support side, AUD/USD needs to settle below the 20 EMA near 0.7690 to have a chance to gain downside momentum. If AUD/USD declines below this level, it will head towards the support at 0.7675.

A move below this level will push AUD/USD towards the next support level which has emerged at 0.7660. In case AUD/USD declines below 0.7660, it will head towards the next support level at 0.7635.

For a look at all of today’s economic events, check out our economic calendar.

Economic Data Puts the EUR and the Loonie in Focus as Inauguration Day Nears

Earlier in the Day:

It’s was a relatively quiet start to the day on the economic calendar this morning. The Kiwi Dollar was in action early this morning.

For the Kiwi Dollar

Business confidence picked up in the 4th quarter of 2020.

According to the NZIER Quarterly Report,

  • A net 16% of businesses expect a deterioration in general economic conditions over the coming months. This was lower than the 38% in the previous quarter and well below the 68% in March 2020.
  • The building sector delivered strong optimism, while other sectors saw some improvement.
  • Away from the construction sector, businesses were reportedly still cautious about general economic conditions ahead.
  • While demand has improved, firms are still finding it difficult to pass on rising costs by raising prices.
  • Despite resulting weak profitability, increased certainty about the outlook supported hiring and investment.
  • A net 15% of firms are planning to hire in the next quarter, with a net 10% planning to invest in plant and machinery.

The Kiwi Dollar moved from $0.71122 to $0.71118 upon release of the figures that preceded retail sales figures.

In December, electronic card retail sales rose by 3.5% compared with December 2019. In November, sales had increased by 1.4%, year-on-year.

According to NZ Stats,

  • Spending on groceries, furniture, and electronics drove sales, while accommodation and fuel spending dragged.
  • Retail spending rose in 4 of the 6 industries in December 2020 compared with December 2019.
  • Consumables had the largest retail sector increase, rising by 7.5%, followed by spending on durables, which increased by 6.7%.
  • Spending on eating out increased by a relatively modest 1.8%. In spite of containment measures, domestic tourism delivered support.
  • By contrast, spending on hotels, motels, and other accommodation was down by 32% due to a lack of international tourists.

The Kiwi Dollar moved from $0.71120 to $0.71051 upon release of the figures. At the time of writing, the Kiwi Dollar up by 0.25% to $0.7128.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.02% to ¥103.71 against the U.S Dollar, while the Aussie Dollar was up by 0.22% to $0.7698.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Finalized December inflation figures from Germany and ZEW economic sentiment figures for Germany and the Eurozone are due out.

Expect Germany’s ZEW Economic Sentiment figure for January to be the key driver.

Away from the economic calendar, COVID-19 vaccine news along with the latest COVID-19 figures will also influence.

On the political front, the Italian government faces a Senate vote later today that will decide Conte’s fate. On Monday, the Chamber of Deputies voted in favor of Conte’s government following the coalition breakdown.

A political crisis on top of the COVID-19 pandemic would pressure the EUR.

At the time of writing, the EUR was up by 0.09% to $1.2088.

For the Pound

It’s another quiet day ahead on the economic calendar, with no material stats due out to provide the Pound with direction.

The lack of stats will continue to leave COVID-19 news to provide direction.

At the time of writing, the Pound was up by 0.06% to $1.3595.

Across the Pond

It’s another particularly quiet day ahead on the economic calendar after Monday’s market close.

The lack of stats will leave the Greenback in the hands of chatter from Capitol Hill and COVID-19 news.

At the time of writing, the Dollar Spot Index was down by 0.06% to 90.713.

For the Loonie

It’s a relatively busy day on the economic data front. Manufacturing sales and wholesales figures for November are due out later today.

The numbers are unlikely to have a material impact on the Loonie, however.

COVID-19 news updates from China and the U.S will likely remain the key drivers on the day.

At the time of writing, the Loonie was up by 0.17% to C$1.2735 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Price Forecast – Australian Dollar Looking for Buyers

The Australian dollar has drifted a little bit lower during the trading session on Monday, looking for buyers underneath. The 0.75 level underneath is also a significant area that is not only a large, round, psychologically significant barrier, but it is also an area that we have already seen buyers jump back into. I think we may return to that level before rallying somewhat significantly. Keep in mind that this pair is based upon the commodity trade, and commodities are a little overdone in the short term. Furthermore, the US dollar is oversold at the moment as well. This does not mean that the trend will change, rather that a pullback is more likely than not.

AUD/USD Video 19.01.21

The Aussie of course needs more “risk on” type of behavior to come back into favor, so we need to see what is going to go on with the stimulus in the United States. After all, the stimulus trade has been driving the train for commodities and US dollar selling for a while, but it is starting it a little bit of a snag right now as perhaps the stimulus package will be as big as initially thought. Regardless, this is a pair that is in an uptrend for a reason, and unless we get some type of major shift in attitude and economic outlook, I just do not see how you could be a seller of the Australian dollar, despite the fact that it has ran so far. I think at this juncture we are looking at the possibility of a little bit of momentum building which means more of a sideways market in the short term.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD and NZD/USD Fundamental Weekly Forecast – Could Struggle as Investors Become More Risk Averse

Last week, rising U.S. Treasury yields and a drop in demand for riskier assets pressured the Australian and New Zealand Dollars. This week, these two factors should remain near the top of the list of catalysts driving the price action, however, investors will also have a chance to react to important economic data from both countries that could have an impact on central bank policy.

During the week-ending January 15, the AUD/USD settled at .7704, down 0.0062 or -0.79% and the NZD/USD finished at .7130, down 0.0108 or -1.49%.

Weekly Recap

The Australian and New Zealand Dollars traded lower last week against the greenback, as rising U.S. Treasury yields helped drive up demand for the U.S. currency. The prospect of more fiscal stimulus under President-elect Joe Biden also weighed on U.S. government bonds, driving Treasury yields sharply higher.

Treasury yields have been slowing creeping higher since Biden won the election in November, but it was a spike above 1% by the 10-year Treasury note that finally caught the attention of currency traders. Most had been lulled into the prospect of more stimulus weakening the U.S. Dollar, but last week, traders finally started to ask themselves, “How is the U.S. going to pay for all this stimulus?”

The answer to that question is sell more government debt. But in order to attract enough buyers, the Treasury has to offer competitive yields and that drove rates higher, encouraging dollar shorts to cover positions.

Australian Employment Change and Unemployment Reports

On Thursday, Australia will release new data on the monthly employment change and unemployment rate. The first report is expected to show the economy added 50.0K jobs in December. The second report is forecast to show a slight dip in the unemployment rate from 6.8% to 6.7%.

Australia’s labor market is recovering faster than expected thanks to an easing in coronavirus restrictions and a rebound in consumer spending, but it will take years for unemployment to fall to desired levels, said the Reserve Bank of Australia (RBA) in December.

Minutes of the RBA December policy meeting showed its Board feared a protracted period of unemployment lay ahead and rectifying that would be a “national priority.”

New Zealand Consumer Inflation Report on Tap

Economists see a diminishing risk that New Zealand will get the dreaded deflation – which means that the Reserve Bank (RBNZ) is now expected to be under less pressure to keep pushing interest rates down.

Whereas not so long ago it was almost universally though among economists that the RBNZ would take the Official Cash Rate (OCR) down below zero in the early part of this year (from the current 0.25%) this is now being seen as unnecessary. Indeed ANZ economists changed their call last week and now don’t see the OCR going negative.

New Zealand Quarterly CPI is expected to come in at a dismal 0.2%, lower than the previously reported 0.7%.

Weekly Outlook

While a stronger than expected Australian jobs report and steady CPI data from New Zealand would be potentially bullish for the Aussie and the Kiwi, the two month rally probably represented that investors were pricing in those outlooks.

Over the short-run, however, the key price drivers will be the direction of U.S. Treasury yields and investor demand for riskier assets.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Daily Forecast – Test Of Support At 0.7675

AUD/USD Video 18.01.21.

Australian Dollar Is Under Pressure At The Start Of The Week

AUD/USD managed to get below the 20 EMA at 0.7690 and is trying to settle below the next support level at 0.7675 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get above the resistance at the 50 EMA at 90.95. A move above this level will push the U.S. Dollar Index towards the next resistance at 91.20 which will be bearish for AUD/USD.

Today, China reported that its GDP grew by 6.5% year-over-year in the fourth quarter of 2020. Meanwhile, China’s Industrial Production increased by 7.3% while Retail Sales grew by 4.6%.

The positive economic data from China failed to provide material support to commodity-related currencies on the foreign exchange market so the Australian dollar continued to move lower against the U.S. dollar.

The former Fed Chair Janet Yellen, who will be nominated by President-elect Joe Biden for Treasury Secretary, has reportedly planned to emphasize that the U.S. was not seeking a weaker dollar.

This statement may provide additional support to the American currency although it remains to be seen whether the current rebound of the U.S. dollar will be sustainable as the U.S. will soon introduce a huge $1.9 trillion stimulus package.

Technical Analysis

aud usd january 18 2021

AUD/USD is currently trying to get below the nearest support level at 0.7675. If this attempt is successful, AUD/USD will move towards the next support level at 0.7635.

There are no material levels between 0.7675 and 0.7635 so this move may be fast. A successful test of the support at 0.7635 will open the way to the test of the next support level at 0.7600.

On the upside, the 20 EMA at 0.7690 will likely serve as the first resistance level for AUD/USD. The next resistance is located at 0.7700 so AUD/USD will likely face material resistance in the 0.7690 – 0.7700 area.

If AUD/USD gets above the resistance at 0.7700, it will head towards the next resistance at 0.7725. A move above this level will open the way to the test of the resistance at 0.7740.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Forex Technical Analysis – Main Trend Changes to Down on Trade Through .7666

The Australian Dollar is trading nearly flat early Monday on light volume due to the U.S. bank holiday. Traders are trying to recover some of Friday’s steep loss that was fueled by rise in the U.S. Dollar as riskier currencies fell after President-elect Joe Biden rolled out a $1.9 trillion stimulus plan that was offset by fresh U.S.-China tensions and a rise in COVID-19 infections in China.

At 02:25 GMT, the AUD/USD is trading .7693, down 0.0010 or -0.13%.

There was no economic data out of Australia, but traders are showing little reaction to fresh numbers out of China. China’s economic recovery beat analyst expectations in the fourth quarter, expanding 6.5% from a year earlier, data from the National Bureau of Statistics showed on Monday.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7666 will change the main trend to down. Taking out .7643 will reaffirm the downtrend.

Taking out .7805 will signal a resumption of the uptrend, while a move through .7820 will reaffirm the rally.

The minor range is .7820 to .7666. Its 50% level or pivot at .7743 is potential resistance.

The short-term range is .7339 to .7820. If the main trend changes to down then its 50% level at .7579 will become the next downside target.

The main support is the retracement zone at .7405 to .7308.

Daily Swing Chart Technical Forecast

Early in the trading session on Monday we’re looking for a downside bias as long as the AUD/USD stays below the pivot at .7743. If this can generate enough downside momentum then look for the selling to possibly extend into .7666 then .7643. The latter is the last potential support before the short-term 50% level at .7579.

The 50% level at .7579 is a potential trigger point for an acceleration to the downside.

Overtaking .7743 will signal the presence of buyers. If the buying increases then look for a move into the pair of main tops at .7805 and .7820.

For a look at all of today’s economic events, check out our economic calendar.

Economic Data from China to Set the Tone for the Day

Earlier in the Day:

It’s was a quiet start to the day on the economic calendar this morning. There were no material stats to provide the markets with direction in the early hours. Later this morning, however, economic data from China will set the tone.

Key stats due out of China later this morning include 4th quarter GDP figures along with industrial production and retail sales numbers.

Unemployment and fixed asset investment figures for December are also due out but will likely have a muted impact on risk sentiment.

For the Majors

At the time of writing, the Aussie Dollar was down by 0.13% to $0.7693, with the Kiwi Dollar down by 0.11% to $0.7125.

The Japanese Yen was up by 0.06% to ¥103.79 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic calendar. Finalized December inflation figures from Italy are due out.

The numbers are unlikely to influence, however.

Expect COVID-19 news and updates from Rome to influence. Political uncertainty, amidst the COVID-19 pandemic, will test EUR support. Conte will now need to avoid going back to the polls…

At the time of writing, the EUR was down by 0.06% to $1.2075.

For the Pound

It’s a quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

The lack of stats will leave COVID-19 news to provide direction. A pickup in vaccination rates should provide support, though the markets will need to see new cases begin to fall.

At the time of writing, the Pound was down by 0.07% to $1.3580.

Across the Pond

It’s a particularly quiet day ahead on the economic calendar, with the U.S markets closed today.

The lack of stats will leave the Greenback in the hands of market risk sentiment and COVID-19 news.

At the time of writing, the Dollar Spot Index was up by 0.03% to 90.800.

For the Loonie

It’s another quiet day on the economic data front. Housing start figures for December are due out later today.

The numbers are unlikely to have a material impact on the Loonie ahead of Wednesday’s monetary policy decision.

Economic data from China and COVID-19 news updates will likely be the key drivers on the day.

At the time of writing, the Loonie was down by 0.26% to C$1.2765 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

The Week Ahead – U.S Politics, Monetary Policy, Economic Data, and COVID-19 in Focus

On the Macro

It’s a busy week ahead on the economic calendar, with 73 stats in focus in the week ending 22nd January. In the week prior, 46 stats had been in focus.

For the Dollar:

It’s a quiet week ahead on the economic data front.

In a shortened week, there are no material stats to consider in the 1st half of the week.

Through Thursday, Philly FED Manufacturing PMI and weekly jobless claims figures are in focus.

With market attention to labor market conditions, expect the jobless claims to have the biggest impact. Another jump in jobless claims would likely weigh on riskier assets.

At the end of the week, prelim private sector PMI figures for January wrap things up.

Housing sector data also due out in the week will likely have a muted impact on the Dollar and risk sentiment.

The Dollar Spot Index ended the week up by 0.75% to 90.772.

For the EUR:

It’s a busy week ahead on the economic data front.

On Tuesday, January ZEW Economic Sentiment figures for Germany and the Eurozone kick things off.

Germany’s ZEW Economic Sentiment indicator will likely be the key driver.

The focus will then shift to January prelim private sector PMI numbers on Friday. France, Germany, and the Eurozone’s private sectors will be in the spotlight on.

Expect Germany’s manufacturing and the Eurozone’s composite to be the key drivers.

Finalized December inflation figures for member states and the Eurozone, also due out in the week, will likely have a muted impact on the EUR.

On the monetary policy front, the ECB is in action on Thursday. No moves are expected, leaving the press conference as the key driver. Questions on the economic outlook are likely as EU member states extend lockdown periods.

The EUR ended the week down by 1.11% to $1.2082.

For the Pound:

It’s a relatively busy week ahead on the economic calendar. Key stats include December inflation and retail sales figures, CBI industrial trend orders, and prelim January private sector PMIs.

Expect the retail sales figures and services PMI, due out on Friday, to have the greatest influence.

Away from the economic calendar, COVID-19 news will also influence. Following the vaccine approvals, the markets will be looking for new COVID-19 cases to begin abating.

On the monetary policy front, BoE Governor is scheduled to speak on Wednesday.

The Pound ended the week up by 0.16% to $1.3590.

For the Loonie:

It’s a busy week ahead on the economic calendar.

Key stats include December inflation and November retail sales figures due out on Wednesday and Friday.

Other stats include housing stats, manufacturing and wholesale sales figures. We would expect these stats to have a muted impact on the Loonie, however.

On the monetary policy front, the BoC is in action on Wednesday. With the markets expecting the BoC to hold rates steady, the rate statement and press conference will be the key drivers.

From elsewhere, economic data from China and private sector PMIs from the Eurozone and the U.S will also influence.

Expect COVID-19 news updates and chatter from Capitol Hill to also provide direction.

The Loonie ended the week down by 0.24% to C$1.2732 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a busier week on the economic data front.

Consumer sentiment figures for January are due out on Wednesday.

With consumer confidence key to fueling a pickup in consumer spending and an economic recovery, expect Aussie Dollar sensitivity to the numbers.

On Thursday, December employment figures will also provide direction ahead of retail sales figures on Friday.

Economic data from China and private sector PMI numbers from the U.S and the Eurozone will also influence.

COVID-19 news updates will remain a key driver in the week. however.

The Aussie Dollar ended the week down by 0.70% to $0.7703.

For the Kiwi Dollar:

It’s a quiet week ahead on the economic calendar.

In the 1st half of the week, 4th quarter business confidence and electronic card retail sales figures are in focus on Tuesday.

At the end of the week, Business PMI and 4th quarter inflation figures wrap things up.

Expect business confidence, retail sales, and 4th quarter inflation figures to be the key drivers.

The Kiwi Dollar ended the week down by 1.51% to $0.7133.

For the Japanese Yen:

It is a busy week ahead.

Finalized November industrial production figures get things going on Monday.

On Thursday, December trade figures will draw plenty of attention. With the COVID-19 pandemic continuing to wreak havoc, weak numbers could test market risk appetite.

At the end of the week, December inflation figures and prelim private sector PMIs for January wrap things up. The PMI numbers should have greater influence at the end of the week.

On the monetary policy front, the BoJ is in action on Thursday.

The Japanese Yen ended the week up by 0.09% to ¥103.85 against the U.S Dollar.

Out of China

It’s also a busy week ahead.

December industrial production and 4th quarter GDP numbers are due out on Monday. These will be the key stats of the week.

Other stats include fixed asset investment, retail sales, and unemployment figures. Barring dire numbers, however, these stats should have limited impact on market risk sentiment.

On Wednesday, the PBoC is also in action. However, the markets are not expecting any moves.

The Chinese Yuan ended the week down by 0.10% to CNY6.4809 against the U.S Dollar.

Geo-Politics

U.S Politics

It’s a busy week on Capitol Hill.

Inauguration Day and Trump’s impeachment will draw interest.

COVID-19

Vaccination rates and availability of vaccines will be key areas of interest.

An upward trend in vaccination rates and a downward trend on infection rates would support optimism towards an economic recovery.

Corporate Earnings

A number of big names deliver results in the week ahead.

From the U.S

These include:

Bank of America (Tues)

Goldman Sachs Group (Tues),

Netflix (Tues)

United Airlines (Wed)

Morgan Stanley (Wed)

Intel Corp. (Thurs).

The Weekly Wrap – COVID-19, Economic Data, and U.S Stimulus Weigh on Riskier Assets

The Stats

It was a relatively busy week on the economic calendar, in the week ending 15th January.

A total of 46 stats were monitored, following 61 stats from the week prior.

Of the 46 stats, 21 came in ahead forecasts, with 17 economic indicators coming up short of forecasts. There were 8 stats that were in line with forecasts in the week.

Looking at the numbers, 17 of the stats reflected an upward trend from previous figures. Of the remaining 29 stats, 23 reflected a deterioration from previous.

For the Greenback, it was a 2nd consecutive weekly gain, with the Dollar Spot Index rising by 0.75% to $90.772. In the previous week, the Dollar had risen 0.18% to 90.098.

Out of the U.S

It was a relatively busy week on the economic data front.

It was a quiet 1st half of the week, however, with stats limited to JOLTs job openings and inflation figures.

While job openings fell in November, inflation held steady, with the annual rate of core inflation holding at 1.6%.

Consumer prices rose by 0.4%, month-on-month, while core consumer prices increased by a modest 0.1%.

In a busy 2nd half of the week, key stats included the weekly jobless claims, retail sales, and consumer sentiment figures.

Jobless claims figure disappointed on Thursday, with initial jobless claims jumping from 784k to 965k.

In December, core retail sales slid by 1.4%, with retail sales falling by 0.7%, both following on from declines in November.

Consumer sentiment figures also disappointed.

According to prelim figures, the Michigan Consumer Sentiment Index fell from 80.7 to 79.2.

The downside was limited, however, supported by COVID-19 vaccines and hopes of a bipartisan shift.

The survey noted that the fall was minor when considering the sharp rise in COVID-19 related deaths, insurrection, and Trump’s impeachment.

Other stats included industrial production, NY Empire State Manufacturing, and business inventory figures. These stats had limited impact on the markets, however.

On the monetary policy front, FED Chair Powell assured the markets that rates were not going up any time soon. The FED Chair also stated that there would be no tapering of bond purchases near-term.

In the equity markets, the NASDAQ and the S&P500 slid by 1.54% and by 1.48% respectively. The Dow fell by a more modest 0.91%.

Out of the UK

It was a relatively busy week on the economic data front.

Monday through Thursday economic data was limited to BRC retail sales and RICS house price figures.

Retail sales rose by a further 4.8% in December, following a 7.7% rise in November according to the BRC.

House prices were also on an upward trend, with the RICS house price balance coming in at 65%. While down marginally from October’s 66%, upward pressure on house prices is expected to remain.

At the end of the week, industrial and manufacturing production and GDP figures were in focus.

In November, industrial production fell by 0.1%, following a 1.1% rise in October. Manufacturing production rose by 0.7%, following a 1.6% increase in October. Both fell short of forecasts.

GDP figures were not much better. In November, the economy contracted by 2.6% reversing 0.4% growth from October. On a 3-month rolling basis, the economy grew by 4.1%, slowing from a 10.2% to October.

Trade data released on Friday had a muted impact on the Pound, however. In November, the trade deficit widened from £13.29bn to £16.01bn, with the non-EU deficit widening from £5.82bn to £8.01bn.

Away from the economic calendar, a pickup in vaccination rates in the UK offset the negative sentiment towards lockdown measures.

In the week, the Pound rose by 0.16% to $1.3590. In the week prior, the Pound had fallen by 0.76% to $1.3568. A 0.72% slide on Friday pared some of the gains from earlier in the week.

The FTSE100 ended the week down by 2.00%, partially reversing a 6.39% gain from the previous week.

Out of the Eurozone

It was a relatively quiet week on the economic data front.

Industrial production and trade figures for the Eurozone, together with full year GDP numbers for Germany were in focus.

It was a mixed set of numbers for the EUR and the European majors.

For the Eurozone, industrial production jumped by 2.5% in November, following a 2.3% increase in October.

Trade data disappointed, however, with the trade surplus narrowing from €30.0bn to €25.8bn in November. Weak numbers were expected, however, following Germany’s trade data from last week.

While economic data from Germany has been impressive of late, GDP figures disappointed.

For the full year 2020, the economy contracted by 5.0%, following 0.6% growth in 2019. Economists had forecasted a 5.1% fall, however, which limited the damage.

ECB President Lagarde had spoken the day before the release of the GDP numbers. Lagarde continued to stand by the ECB’s economic forecasts, in spite of the extended lockdown measures in the EU. Lagarde pointed out that the forecasts had factored in lockdowns through the 1st quarter.

At the end of the week, finalized inflation figures for France and Spain had a muted impact on the EUR.

On the monetary policy front, the ECB’s monetary policy meeting minutes also failed to move the dial in the week.

For the week, the EUR slid by 1.11% to $1.2082. In the week prior, the EUR had risen by 0.02% to $1.2218.

For the European major indexes, it was a bearish week. The EuroStoxx600 fell by 0.81%, with the CAC40 and DAX30 sliding by 1.67% and 1.86% respectively.

A continued spike in new COVID-19 cases weighed. Across the EU, member states were reporting particularly low vaccination rates that added to the negative mood.

For the Loonie

It was a particularly quiet week on the economic data front. There were no material stats to provide the Loonie with direction.

At the start of the week, the BoC’s Business Outlook Survey failed to move the dial.

Market optimism, fueled by expectations of a sizeable U.S stimulus package, had supported crude oil prices and the Loonie.

A Friday sell-off, however, left the Loonie in the red. Concerns over the COVID-19 pandemic and market reaction to the Biden stimulus package weighed on riskier assets.

In the week ending 15th January, the Loonie fell by 0.24% to C$1.2732. In the week prior, the Loonie had risen by 0.2% to C$1.2702.

Elsewhere

It was a bearish week for the Aussie Dollar and the Kiwi Dollar, following solid gains from the previous week.

In the week ending 15th January the Aussie Dollar fell by 0.70% to $0.7703, with the Kiwi Dollar ended the week down by 1.51% to $0.7133.

For the Aussie Dollar

It was a quiet week on the economic calendar.

November retail sales, building permit, and new home loan figures were in focus in the week.

Retail sales impressed in November, supported by an easing of containment measures in Victoria. Sales jumped by 7.1%, following a 1.4% rise in October.

Building permits rose by 2.6%, following a 3.3% increase in October, with new home loans surging by 5.5%.

Home loans hit a record high mid-way through the 4th quarter.

From elsewhere, trade data from China also provided support, with imports and exports on the rise in December.

For the Kiwi Dollar

It was also a particularly quiet week on the economic calendar.

There were no material stats from New Zealand to provide the Kiwi Dollar with direction.

For the Japanese Yen

It was a relatively quiet week on the economic calendar. Core machinery orders were in focus in the week.

Month-on-month, orders rose by 1.5% in November, following October’s 17.1% surge. Economists had forecast a 6.2% slide. Year-on-year, orders were down by 11.3%, after having risen by 2.8% in October. Economists had forecast a more severe 15.4% slump.

The stats ultimately had a muted impact on the Japanese Yen, however. COVID-19 news and chatter from Capitol Hill remained key drivers in the week.

The Japanese Yen rose by 0.09% to ¥103.85 against the U.S Dollar. In the week prior, the Yen had fallen by 0.72% to ¥103.94.

Out of China

Inflation and trade data for December were in focus.

The stats were skewed to the positive, supporting riskier assets in the week.

Inflationary pressures returned at the end of the year, with consumer prices rising by 0.7%, month-on-month. In November, consumer prices had fallen by 0.6%. As a result, consumer prices were up by 0.2% year-on-year, partially reversing a 0.5% decline from November.

Wholesale deflationary pressures also eased at the end of the year.

Trade data was more impressive, however, with exports surging by 19.1% following a 21.1% jump in November. Imports increased by 6.5%, leading to a widening in the USD trade surplus from $75.4bn to $78.16bn.

While the stats were positive, a spike in new COVID-19 cases in China was a concern in the week.

In the week ending 15th January, the Chinese Yuan fell by 0.10% to CNY6.4809. In the week prior, the Yuan had risen by 0.81% to CNY6.4746.

The CSI300 slipped by 0.68%, while the Hang Seng ended the week up by 2.50%.

AUD/USD Weekly Price Forecast – Australian Dollar Stalls at Big Figure

The Australian dollar has gone back and forth during the course of the last couple of weeks, showing a bit of hesitation. Ultimately, I think the biggest thing here is simply that the market has a lot of exhaustion coming into the marketplace, but I do think that gives us an opportunity to pick up value closer to the 0.75 handle. That of course is an area that should continue to be interesting due to the fact that it is not only a large, round, psychologically significant figure, but it was also the scene of a breakout. A pullback to that area will attract a lot of attention, and I would be all over that area if we see some type of supportive candlestick, perhaps even on the daily chart.

AUD/USD Video 18.01.20

To the upside, the 0.80 level would be a target, and of course would offer a lot of resistance as well, for the same reasons that the 0.75 level should offer support. When you look at historic charts, the 0.80 level has been an area of both support and resistance on even the monthly timeframe. I think at that point it is likely that we will continue to see a lot of value hunting due to the fact that we should see a significant amount of stimulus out there driving of commodities in value and demand, thereby pushing the Aussie higher. All things being equal, the market is likely to see plenty of value hunters out there just waiting to jump on board.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Price Forecast – AUD Continues to Build Case for Higher Prices

The Australian dollar has pulled back just a bit during the trading session on Friday but at this point in time it looks likely that we are ready to continue going higher. The 0.77 level is an area that has acted as a bit of a magnet as of late, after breaking above the 0.75 handle. When you look at the chart overall, you can see that the 50 day EMA sits just above the 0.75 handle, an area that of course is a large, round, psychologically significant figure. Short-term pullbacks will continue to be looked at as potential buying opportunities in the big scheme of things, as the market does tend to focus closely on these big figures.

AUD/USD Video 18.01.21

If you look at the recent action, you could make an argument for a bullish flag, which measures for a move towards the 0.80 level, possibly even the 0.81 level. With that being the case, I think it makes quite a bit of sense that we eventually get there from not only a technical analysis standpoint, but also the fact that commodities in general will continue to thrive in a world where there is massive amounts of stimulus coming from multiple countries. That being the case, I do like the idea of a longer-term “buy-and-hold” strategy, adding little bits and pieces along the way on short-term dips. I think that this is a cyclical change, at least for the foreseeable future, as the “reflation trade” is in full effect.

For a look at all of today’s economic events, check out our economic calendar.