Asian Open

AUD/USD plunged alongside Wall Street indices following the Fed's last meeting of the year. And if Santa’s rally is to kick in at all this year, it could be to pick up some of the crumbs left during yesterday’s volatile selloff.

A decent bullish reversal candle has formed on the ASX 200 on Tuesday, which begs the question as to whether Santa’s rally is about to kick into gear. Although it is the FOMC meeting within the next 24 hours which could decide when or even if it starts at all.

Wall Street indices are just not on the same page at the moment, with the Nasdaq hitting a record high, while the S&P 500 trading sideways and the Dow chalks up its worst daily bearish streak in 12 years. And that's not good for the ASX.

There's nothing quite like a volatile whipsaw to snap traders out of a lull, and that is exactly what we saw on gold and silver prices on Thursday, during a day of heavy losses. While I suspect price action to remain choppy, I also think they'll grind lower from here.

AUD/USD made a minor recovery from its 13-month low late on Wednesday, but whether it can muster up the strength for a decent bounce likely sits in the hands of USD/CNH. Although the ASX 200 could be set for a bounce with the Nasdaq reaching a record high and the S&P 500 close to its own ATH.

A dovish RBA meeting and stronger US dollar ahead of a key US inflation report has kept AUD/USD pinned to a key support level. And odds of it making a meaningful recovery this week appear low, without a surprise downside miss from US CPI. Which again, seems unlikely.

China's stock markets were given a nice bump on Monday after the Politburo announced an easing of policy stance. This allowed AUD/JPY and USD/JPY to deliver strong bounce from key support levels, as the yen weakened during a risk-on session for FX and commodities.

It's not every day you see gold plunge alongside yields. But that is what Monday served on reports of a potential ceasefire in Gaza and Trump's picking a relatively 'safe pair of hands' for the US Treasury Secretary role. With a prominent swing high on gold, I suspect it could be headed much lower from here.

The USD index defied the 3-day retracement that dared to defy its bullish trend and now appears on the cusp of a breakout. While this could signify EUR/USD dropping below 105, it may also equate to a bullish breakout on USD/JPY.

Hot CPI from Canada, a rise of geopolitical tensions and increased threat of tariffs played nicely for commodity FX bulls, with AUD, CAD and NZD leading the pack among FX majors on Tuesday. And there could be some wriggle room for further gains.

The USD retraced lower from its 1-year high for a second day, allowing AUD/USD to post a solid bounce from its cycle low. And price action suggest its bounce may not be over just yet.

The USD bullish rally continued to rage after Powell bluntly said that the Fed may not be in a hurry to cut rates, citing a strong labour market and a "remarkably strong" economy.

The USD rally is reminiscent of the one seen in July which, if to be repeated, could see it tag 108.29 over the next month. But already it appears to be ahead of schedule. USD/JPY looks set to make a break for 156 which seems within easy reach.

Wall Street indices displayed their first signs of doubt following Trump’s election victory last week, with the Dow leading losses on Tuesday. Weak sentiment from China has also weighed on ASX futures overnight.

It was a lively day’s trade on Monday with Bitcoin reaching news highs above $80k and the USD index retesting its YTD high of 105.62. WTI crude oil and gold are on the brink of breaking key levels to the downside.

The expected 25 cut was delivered. But the Fed were understandably cautious regarding future cuts, given they don't know which or how many of Trump’s inflationary policies will see the day of light. And that means the current pullback on the USD and yields could be limited.