CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

AUD/USD, ASX 200 caught in the crossfire of AU CPI and FOMC: Asian Open

Article By: ,  Market Analyst
January 30, 2024 9:50 PM

Market Summary:

  • The IMF (International Monetary Fund) increased their growth outlook forecast for the US and China – the two largest economies – and noted that inflation was cooling faster than anticipated
  • US consumer confidence rose for a third month according to the Consumer Board, and reached a 2-year high on expectations of lower inflation expectations. Job openings were also higher according to the JOLTS report.
  • A combination of profit taking ahead of the FOMC meeting and mixed earnings saw a mixed response on Wall Street indices.
  • The Dow Jones extended its rally to a fresh all-time high, although the S&P 500 closed flat with an abnormally low-range day after printing an intraday record high, and the Nasdaq 100 produced a small bearish inside day
  • Currency markets were confined to ranges with a general lack of direction looking at the doji’s across the FX majors. EUR/USD held above its 200-day EMA, USD/CAD edged higher and AUD/USD remained confined within its potential bear flag
  • Gold failed to hold onto to its earlier safe-haven gains on renewed hopes of a truce between Hamas and Israel
  • Crude oil closed back above its 200-day EMA following Monday’s bearish engulfing candle, to suggest we’re in another choppy consolidation. The bias remains for another leg higher.
  • Australian retail trade was down -2.6% in December, to once again show that the majority tend to spend ahead of Xmas at the Black Friday sales and cut back at the end of the year. It’s a volatile figure at the best of times, but particularly at this time of the year. But another month of two of such figures will surely bring forward bets of a rate cut.

 

 

Events in focus (AEDT):

  • 10:50 – BOJ summary of opinions, Japan’s industrial production, retail sales
  • 11:00 – New Zealand business confidence (ANZ)
  • 11:30 – Australian quarterly and monthly CPI reports, housing credit
  • 12:30 – China’s PMIs (NBS)
  • 16:00 – Japan’s construction orders, household orders, housing starts
  • 18:00 – German retail sales, import/export price indices
  • 18:45 – French CPI
  • 19:55 – German unemployment
  • 20:00 – German state CPIs
  • 00:15 – US ADP employment change
  • 00:30 – US employment cost index

 

ASX 200 at a glance:

  • The ASX 200 cash index rose for a seventh day came within a couple of points of its record high
  • 7 of its 11 sectors advanced, led by info tech, real estate and healthcare
  • If today’s Q4 inflation print comes in soft enough today, it could be the catalyst that breaks it to a new record high
  • But if the Q3 report was anything to go by, traders should also be on guard for a hotter inflation report than expected – which could weigh on the ASX 200 at levels it has generally struggled to conquer
  • A bearish RSI divergence is forming on the daily chart, and a shooting star candle formed on the ASX cash market
  • The chart below shows a 2-bar reversal below resistance alongside a bearish divergence with RSI
  • The bias is for a pullback from current levels which cold bring 7500 into focus near the 10-day EMA.

 

 

AUD/USD technical analysis (daily chart):

The Australian dollar continues to trade within a potential bear flag pattern, which projects an approximate target around 0.64. A soft inflation report could send AUD/USD lower, but its downside may be limited ahead of the FOMC meeting. The idea scenario for bears is a soft AU inflation report and relatively hawkish FOMC meeting.

 

Take note of the probable support zone around 0.6500 – 0.6520 which could take the string out of any bearish move, at least temporarily.

 

Should AU inflation come in hotter than expected, an upside break an invalidation of the bear flag seems likely. At which point I would seek evidence of a swing high around the Q3 open or 0.6700, near the volume cluster.

 

 

View the full economic calendar

 

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

 

How to trade with City Index

You can trade with City Index by following these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore

  2. Search for the market you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material 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.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024