Sat, Jan 28, 2023 @ 17:42 GMT
HomeAction InsightMarket OverviewAussie Rebounds With Rally in Copper, Dollar Turns South

Aussie Rebounds With Rally in Copper, Dollar Turns South

Australia Dollar leads commodity currencies higher, in otherwise still very quiet markets today. Prospect of further easing of restrictions is probably giving some industrial metals and oil prices a lift. But the positive sentiment is not much reflected in the global stock markets. Dollar is back under selling pressure, followed by Yen. European majors also turn weaker.

Technically, copper is now eyeing 3.9472 resistance with today’s rally. Firm break there will resume the whole rebound from 3.1314. Next target will be 50% retracement of 5.0332 to 3.1314 at 4.0823. If happens, that would help support AUD, in particular against Dollar and Yen.

In Europe, at the time of writing, FTSE is up 0.07%. DAX is down -0.15%. CAC is down -0.06%. Germany 10-year yield is up 0.0279 at 1.814. Earlier in Asia, Nikkei dropped -0.40%. Hong Kong HSI rose 3.38%. China Shanghai SSE dropped -0.07%. Singapore Strait Times rose 0.33%. Japan 10-year JGB yield rose 0.0015 to 0.256.

US initial jobless claims rose to 230k, below expectations

US initial jobless claims rose 4k to 230k in the week ending December 3, below expectation of 245k. Four-week moving average of initial claims rose 1k to 230k.

Continuing claims rose 62k to 1671k in the week ending November 26. Four-week moving average of continuing claims rose 43k to 1582k.

Australia trade surplus little change at AUD 12.22B in Oct

Australia exports of goods and services dropped -0.9% mom to AUD 60.01B in October. Imports dropped -0.7% mom to AUD 47.85B. Trade surplus narrowed slightly from AUD 12.44B to AUD 12.22B, slightly above expectation of AUD 12.10B.

Looking at some details, the decline in exports was driven mainly by AUD -0.6B fall in gold while imports decline was driven by AUD -0.5B fall in energy. Fuel exports, dominated by LNG, rose AUD 0.3B to AUD 11.2B, and hit a new record high. Rural goods exports rose AUD 0.1B to AUD 7.2B, also a record high.

AUD/USD Mid-Day Report

Daily Pivots: (S1) 0.6682; (P) 0.6712; (R1) 0.6755; More…

AUD/USD recovers ahead of 0.6641 resistance but stays below 0.6850 resistance. Intraday bias remains neutral first. Again, considering bearish divergence condition in 4 hour MACD, break of 0.6641 support should indicate short term topping, following rejection by 0.6871 fibonacci level. Intraday bias will be back on the downside for 0.6521 resistance turned support first. However, sustained break of 0.6871 will extend the rise from 0.6169 towards 55 week EMA at 0.6922.

In the bigger picture, a medium term bottom is in place at 0.6160 already. But it’s too early to call for trend reversal. Nevertheless, even as a corrective move, rise from 0.6169 should target 38.2% retracement of 0.8006 to 0.6169 at 0.6871. Sustained trading above 55 week EMA (now at 0.6922) will raise the chance of the start of a bullish up trend. However, rejection by 0.6781 or 55 week EMA, followed by 0.6521 resistance turned support and retain medium term bearishness.

Economic Indicators Update

GMT Ccy Events Actual Forecast Previous Revised
23:50 JPY GDP Q/Q Q3 -0.20% -0.30% -0.30%
23:50 JPY GDP Deflator Y/Y Q3 F -0.30% -0.50% -0.50%
23:50 JPY Bank Lending Y/Y Nov F 2.70% 2.50% 2.70% 2.60%
23:50 JPY Current Account (JPY) Oct -0.61T 0.35T 0.67T
00:01 GBP RICS Housing Price Balance Nov -25% -2%
00:30 AUD Trade Balance (AUD) Oct 12.22B 12.10B 12.44B
05:00 JPY Eco Watchers Survey: Current Nov 48.1 49.3 49.9
13:30 USD Initial Jobless Claims (Dec 2) 230K 245K 225K 226K
15:30 USD Natural Gas Storage -38B -81B

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