by Nicholas Cork
The AUD had a strong session on Friday night as traders continued to adjust their positioning towards no more rate hikes in the US, and a potentially weaker USD as a result. The continuing US Government shutdown is impacting the investors view of the US economy now, and US interest rate yields slid 3 to 4 basis points across the curve as a result. Equities closed the session reasonably steady, and Chinese Trade data today now becomes the focus.
Brexit is still an unknown outcome as parliament votes again this week, with the two biggest donors to the whole campaign now feeling it may be abandoned by the Government and the UK stays put. The impact on the GBP has been ok as it sits at 6 week highs to start the week, but worth keeping an eye on as the week unfolds.
AUDUSD starts today at 72 cents, 5 cents higher than the 3rd Jan. It looks like it is now going to sit in the 0.7150/0.7250 band until further direction on the US economy and Brexit, but note technically it looks overbought thus may find moves above 0.7250 tough at the moment. Importers should consider these levels compared to recent lows.
CHART : DOW JONES rising wedge formation, very overbought, 22,600 looking like a target (REUTERS)
© Copyright - EncoreFX, 2018.EncoreFX (Australia) Pty Ltd ABN 42 607 244 879 AFSL 479 870 is the issuer of the financial products in Australia. The information on this website has been prepared without taking into account your objectives, financial situation or needs and so before acquiring any financial services or products from EncoreFX, you should consider the appropriateness of the information having regard to your own objectives, financial situation or needs. You should obtain the product disclosure statement (PDS) for the relevant product and consider the PDS before making any decision to acquire the product. The information on this website is not directed at residents of any country other than Australia and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. It is the responsibility of visitors to this website to ascertain the terms of, and comply with, any local law or regulation to which they are subject.