AUD Value Forecast: US Scores Downgrade Burns Professional-Development Aussie

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By Wetradelive Weekly Columns & Special Reports August 2, 2023

AUD/USD & AUD/NZD ANALYSIS & TALKING POINTS

Scores downgrade favors low danger USD.
ADP employment change in focus at present.
Double high neckline breach on every day AUD/USD.

AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP

The Australian greenback’s ache has been rising towards the US greenback after rankings company Fitch downgraded US debt to AA+ from a AAA score. This follows on from the Commonplace and Poor’s downgrade beforehand. Unusually, markets demand for US Treasuries intensified regardless of the downgrade whereas the secure haven attribute of the dollar sustained USD upside.

Earlier this morning, New Zealand labor knowledge (see financial calendar beneath) confirmed some indicators of easing which ought to maintain the Reserve Financial institution of New Zealand (RBNZ) regular on their cycle. Unemployment pushed increased alongside decrease wage progress, probably reducing core inflation pressures which have been fairly sticky. AUD/NZD rallied on this knowledge regardless of the Reserve Financial institution of Australia (RBA)’s determination to carry charges yesterday. Cash market pricing nonetheless reveals the potential of one other RBA hike however current repricing has considerably diminished this likelihood. Incoming knowledge will decide the long run charge trajectory.

Later at present, US ADP employment change for July will dominate headlines with estimates considerably decrease than the prior print. Ought to precise numbers come in step with forecasts, there could also be a drop off within the USD however the knowledge shouldn’t be relied upon as a gauge for Non-Farm Payroll (NFP) knowledge on Friday. The dearth of congruency not too long ago will go away markets hesitant forward of Friday’s launch however yesterday miss on US ISM Manufacturing Employment may trace at a decrease NFP learn.

AUD/USD ECONOMIC CALENDAR (GMT +02:00)

Supply: DailyFX financial calendar

TECHNICAL ANALYSIS

AUD/USD DAILY CHART

Chart ready by Warren Venketas, TradingView

Every day AUD/USD value motion has now damaged beneath the double high (blue) neckline across the 0.6596 swing low/0.6600 psychological area. This might open up the 0.6500 help deal with as soon as extra, pushing the Relative Energy Index (RSI) nearer to oversold territory.

helps my prior evaluation of a 0.6700 retest which has since performed out dipping beneath each the 50-day (yellow) and 200-day (blue) transferring averages respectively. Bears now look to set their sights on the coinciding with the.

Key resistance ranges:

0.6772
200-day MA
0.6700/50-day MA
0.6596

Key help ranges:

0.6565
0.6500

IG CLIENT SENTIMENT DATA: BEARISH (AUD/USD)

IGCS reveals retail merchants are presently internet LONG on AUD/USD, with 76% of merchants presently holding lengthy positions. At DailyFX we sometimes take a contrarian view to crowd sentiment leading to a short-term draw back disposition.

AUD/NZD DAILY CHART

Chart ready by Warren Venketas, TradingView

AUD/NZD has pushed increased on the again of the current New Zealand jobs figures however the buying and selling bias stays in the direction of the draw back with the RSI beneath the midpoint degree in addition to costs buying and selling beneath the 50-day (yellow) and 200-day (blue) transferring averages respectively.