Thu, Dec 01, 2022 @ 13:21 GMT
HomeAction InsightMarket OverviewAussie Higher after RBA Stands Pat, AUD/NZD Soars

Aussie Higher after RBA Stands Pat, AUD/NZD Soars

Yen pared back some gains and turned mixed as risk aversion recedes. Dollar also trades mixed as traders await fresh directions. On the other hand, commodity currencies recovered in general and sentiments stabilized. Mild weakness is seen in Sterling into European session but that’s yet to be confirmed. In other markets, Nikkei stays soft for most of the day and ended down -0.18% at 19344.15. That followed profit taking pull back in US overnight as DJIA closed down -0.24% at 20954.34. Gold stabilized at around 1225 and turned sideway after dipping from 1264.9 since last week. WTI crude oil also stabilized at around 53.

RBA stands pat

RBA left the cash rate unchanged at 1.50% as widely expected. Policymakers turned more upbeat on the economic outlook. as noted in the accompanying statement, "most measures of business and consumer confidence are at, or above, average", whilst "consumption growth was stronger towards the end of the year, although growth in household income remains low". The statement, however, added that "with growth in labour costs remaining subdued, underlying inflation is likely to stay low for some time". RBA also mentioned that the Fed is "expected to increase further" and it is less likely for other major central banks to add more monetary policy easing. More in

AUD/NZD resuming medium term rise

AUD/NZD is so far the biggest mover this week and one of the top movers since last month. The cross took out key medium term resistance level at 1.0769 while confirms resumption of whole rise from 1.0234. More importantly, the development affirms the case that long term correction from 1.1638 (2015 high) has already finished at 1.0234. Current up trend should target 161.8% projection of 1.0234 to .0762 at 1.0323 at 1.1177 next. Firm break there will affirm impulsiveness and would likely send the cross through 1.1638 high to 50% retracement of 1.3793 to 1.0016 at 1.1905 in medium term.

On the data front…

UK BRC retail sales dropped -0.4% yoy in February. German factory orders dropped -7.4% mom in January. Swiss will release foreign currency reserves in European session while Eurozone will release Q4 GDP final. US will release trade balance later in the day. Canada will also release trade balance plus Ivey PMI.

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7563; (P) 0.7586; (R1) 0.7602; More…

AUD/USD recovers further today but stays below 0.7635 minor resistance. Outlook is unchanged so far. Deeper fall is still in favor as long as 0.7635 minor resistance holds. We’re holding on to the view that rebound from 0.7158 is finished at 0.7740. Below 0.7542 and sustained trading below 55 day EMA will pave the way back to 0.7144/7158 support zone. However, firm break of 0.7635 will dampen our bearish view and turn focus back to 0.7740 instead.

In the bigger picture, we’re still treating price actions from 0.6826 low as a correction. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seek to 55 month EMA (now at 0.8164) and above.

AUD/USD 4 Hours Chart

AUD/USD Daily Chart

Economic Indicators Update

GMT Ccy Events Actual Forecast Previous Revised
0:01 GBP BRC Retail Sales Monitor Y/Y Feb -0.40% -0.50% -0.60%
3:30 AUD RBA Rate Decision 1.50% 1.50% 1.50%
7:00 EUR German Factory Orders M/M Jan -7.40% -2.50% 5.20%
8:00 CHF Foreign Currency Reserves Feb 643.7b
10:00 EUR Eurozone GDP Q/Q Q4 F 0.40% 0.40%
13:30 USD Trade Balance Jan -47.0B -44.3B
13:30 CAD International Merchandise Trade (CAD) Jan 0.75B 0.92B
15:00 CAD Ivey PMI Feb 58.9 57.2

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