AUDNZD Bullish
Weekly average price above Monthly
Resistance 1.09329 is now support1
Support 2 is 1.07745
A break below 1.077745 is bearish trend(red arrow)
AUDNZD could close 3days in row above 1.9 support zone
Many technicians will recognise this as a potential trend reversal to the upside.
Fibonacci enthusiasts may also acknowledge that the dynamic value, which may serve well as resistance if challenged, is accompanied by a moderate Fibonacci cluster around $0.6681 (38.2% and 61.8% Fibonacci retracement ratios). Therefore, technically, this could prove a problematic headwind.
The levels above 1.11 are untested Highs and AUD will try to fill them
Resistance 1.09329 is now support1
Support 2 is 1.07745
A break below 1.077745 is bearish trend(red arrow)
AUDNZD could close 3days in row above 1.9 support zone
Many technicians will recognise this as a potential trend reversal to the upside.
Fibonacci enthusiasts may also acknowledge that the dynamic value, which may serve well as resistance if challenged, is accompanied by a moderate Fibonacci cluster around $0.6681 (38.2% and 61.8% Fibonacci retracement ratios). Therefore, technically, this could prove a problematic headwind.
The levels above 1.11 are untested Highs and AUD will try to fill them
Comment:
Dollar Index Hits 14-month Low
DXY decreased to a 14-month low of 100.61
Wall Street Rallies after Softer Inflation
US stocks surged on Wednesday after both headline and core inflation fell more than expected in June, reinforcing the view the Federal Reserve may stop the tightening campaign sooner than expected. The Dow Jones gained around 250 points to 34548, the highest level since November last year, with 3M and Goldman Sachs up nearly 2% and among the top performers. The S&P 500 added 0.9% 4477, a level not seen since April of 2022, led by shares in the consumer discretionary, tech and real estate sectors. The Nasdaq was up about 1.2% to 13906, also the highest since April last year. Traders are currently pricing in a 92% chance for a 25bps increase in the fed funds rate this month, while the odds for another quarter-point hike in September fell to 13% from 20% before the CPI release and in November eased to 26% from 34%.
Brazil Business Morale Rises to 8-Month High
The Industrial Entrepreneur Confidence Index (ICEI) in Brazil rose by 0.7 points from the previous month to an eight-month high of 51.1 in July of 2023. This marks the second consecutive month in which the industry has shown confidence, attributed primarily to a more positive evaluation of the current economic conditions (+1.3 points to 45.5). Also, the indicator of future expectations increased (+0.4 points to 53.9), indicating optimism for the next six months.
FTSE MIB Close Rise to 15-Year High
The FTSE MIB index closed 1.8% higher at 28,573 on Wednesday, outperforming other benchmark European indices amid sharp gains for its heavyweight financial sector as markets digested the soft US inflation print. American consumer prices rose by 3% annually in June, below estimates of 3.1%, benefitting from a slowdown in core consumer prices. The development lifted equities amid hopes that the Fed will be able to ease its hawkish pressure. Banks were among the sharpest gainers as BTP yields fell by 15bps, aiding their balance sheet with Banca MPS and Banco BPM both adding more than 2%. In the meantime, STMicroelectronics shares surged 4.8% amid recommendation updates from Jeffries and Citigroup.
DXY decreased to a 14-month low of 100.61
Wall Street Rallies after Softer Inflation
US stocks surged on Wednesday after both headline and core inflation fell more than expected in June, reinforcing the view the Federal Reserve may stop the tightening campaign sooner than expected. The Dow Jones gained around 250 points to 34548, the highest level since November last year, with 3M and Goldman Sachs up nearly 2% and among the top performers. The S&P 500 added 0.9% 4477, a level not seen since April of 2022, led by shares in the consumer discretionary, tech and real estate sectors. The Nasdaq was up about 1.2% to 13906, also the highest since April last year. Traders are currently pricing in a 92% chance for a 25bps increase in the fed funds rate this month, while the odds for another quarter-point hike in September fell to 13% from 20% before the CPI release and in November eased to 26% from 34%.
Brazil Business Morale Rises to 8-Month High
The Industrial Entrepreneur Confidence Index (ICEI) in Brazil rose by 0.7 points from the previous month to an eight-month high of 51.1 in July of 2023. This marks the second consecutive month in which the industry has shown confidence, attributed primarily to a more positive evaluation of the current economic conditions (+1.3 points to 45.5). Also, the indicator of future expectations increased (+0.4 points to 53.9), indicating optimism for the next six months.
FTSE MIB Close Rise to 15-Year High
The FTSE MIB index closed 1.8% higher at 28,573 on Wednesday, outperforming other benchmark European indices amid sharp gains for its heavyweight financial sector as markets digested the soft US inflation print. American consumer prices rose by 3% annually in June, below estimates of 3.1%, benefitting from a slowdown in core consumer prices. The development lifted equities amid hopes that the Fed will be able to ease its hawkish pressure. Banks were among the sharpest gainers as BTP yields fell by 15bps, aiding their balance sheet with Banca MPS and Banco BPM both adding more than 2%. In the meantime, STMicroelectronics shares surged 4.8% amid recommendation updates from Jeffries and Citigroup.
Comment:
Trade is open
There were no economic indicators this morning to shift investor sentiment.
However, monetary policy divergence remains in favor of the dollar following Fed Chair Powell’s two days of testimony.
It is a quiet start to the week for the AUD/USD and NZD/USD. There are no economic indicators from Australia or New Zealand to move the dial.
While investors will try to claw back losses from last week, the theme remains the same. Market angst over the economic outlook for China and a hawkish Fed monetary policy outlook remain headwinds for the Aussie and the Kiwi.
Looking forward to the US session, there are no US economic indicators to influence. The lack of economic indicators will leave the pairs in the hands of Fed chatter. Hawkish chatter would pressure the pairings through the afternoon ahead of influential US stats this week.
This morning, bets on a July Fed interest rate hike remained elevated despite manufacturing sector woes. According to the CME FedWatch Tool, the probability of a 25-basis point July Fed rate hike stood at 71.9% versus 74.4% one week ago.
Significantly, the chances of the Fed lifting rates to 5.75% in September stood at 10.1%, up from 8.9% one week earlier. This could change materially with the Core PCE Price Index numbers out on Friday.