|Day's range||0.674 - 0.677|
|52-week range||0.6672 - 0.7295|
With coronavirus worries on the rise, the market continues to struggle with the unenviable task of factoring in absolute terms its implied economic devastation. Given that China has rapidly increased its role in the global supply chains, the market continues to price in the worst case, negative growth shock scenarios.
It could be another choppy day ahead for the majors. While economic data out of the U.S will influence, the majors will be in the hands of the news wires.
What happens in China with regards to the coronavirus will determine the direction of the Aussie and Kiwi.
The Australian dollar has gotten absolutely hammered during the open on Monday, breaking down below the 0.68 level. That being said, the market is still sitting above several minor support level that could come into play. Beyond that, we are at historically cheap levels.
Based on the early price action, downside momentum is driving the trade. This should lead to a test of an uptrending Gann angle at .6772.
The British pound is steady at the start of the week. The Australian and New Zealand dollars are trading at multi-week lows, as the China coronavirus has raised investor risk apprehension.
WHO decision should trigger a volatile response in financial markets and is likely to determine the direction of global stock markets over the near-term.
Traders are going to continue to debate whether the RBA and RBNZ should cut rates in February, but last week’s economic data has cooled thoughts of automatic cuts.
It’s a big week ahead. Britain leaves the EU, Trump’s defense team is in action, corporate earnings are in focus, and the FED and the BoE are in action.
The main range is .7082 to .6671. It retracement zone at .6877 to .6925 is controlling the near-term direction of the AUD/USD. This zone is now resistance.
The Australian dollar went back and forth during the trading session on Friday, as we continue to dance around the previous downtrend line. This sets up an interesting trade opportunity though, as we have a couple of clear levels.
The Australian dollar initially tried to rally during the week, but then reached towards the previous downtrend line. Ultimately, the market is approaching the 0.68 level is a sign of challenging support.
Today’s price action suggests Aussie and Kiwi investors may be afraid to take a chance holding on to long positions over the week-end due to the fear and uncertainty over the Chinese virus.
The pound has enjoyed a good week, with gains of close to one percent. There are two more hurdles for the currency before the weekend, with the release of manufacturing and services PMIs (release time – 9:30 GMT).
The travel, autos, and resources sectors have all been hit hard vs. staples, and healthcare was outperforming amid concern over coronavirus. The dollar is strong, CNY is weak, and bonds are bid.
It’s a busy day ahead, with private sector PMIs for January to set the tone. Expect retail sales figures from Canada to also drive the Loonie.
The Australian dollar rallied quite significantly during the trading session on Thursday, reaching towards the 200 day EMA as the jobs numbers came out much stronger than anticipated.
The employment report is good news for Australian Dollar bulls and discouraging news for short-sellers betting on a February rate cut. Now they have to reset the clock to April or May so selling the AUD/USD on rallies may not be sound advice unless the coronavirus scare spooks investors into dumping the currency because of Australia’s ties to China’s economy.
The British pound has flexed some muscle, as GBP/USD has climbed above the 1.31 line for the first time in two weeks. Will the upward move continue?
Employment figures give the Aussie a boost as the focus shifts to the ECB. Will Lagarde follow the BoC with a dovish outlook to sink the EUR?
The Australian dollar fell to test the previous downtrend line but bounced significantly from there to show signs of resiliency. The hammer that is trying to form is a good sign, and quite frankly it looks as if the Aussie is trying to save itself.