Aussie Slips after RBA But Downside Limited, Dollar Firmer Ahead of ISM Manufacturing
| Action Insight Daily Report 8-1-23 |
Aussie Slips after RBA But Downside Limited, Dollar Firmer Ahead of ISM Manufacturing |
Australian Dollar is trading broadly lower after RBA opted to keep interest rates on hold. However, the currency's losses remain contained was not too much out of expectations. RBA's continued bias towards tightening, albeit arguably less emphatic than before, is currently helping to limit Aussie's downside, keeping it within Monday's trading range, waiting for a potential breakout. The New Zealand Dollar is also trending weaker, closely following its Australian counterpart. Meanwhile, Japanese Yen is extending its recent downward trajectory, despite 10-year JGB yield hovering around 0.6% mark. Positive investor sentiment in Japan, buoyed by Nikkei's post-BoJ rally, continues to weigh on the Yen. The focus now shifts to which Yen cross might break out of its recent range first. On the other side of the coin, Dollar is today's strongest performer, trailed by British Pound and Swiss Franc. The greenback's path could be influenced by today's ISM manufacturing index, although the primary market-moving event is likely to be Friday's non-farm payrolls report. Technically, GBP/CAD now gyrating in tight range just above 55 D EMA (now at 1.6911). Medium term momentum as been diminishing somewhat as seen in D MACD. Risk of a major pull back is increasing considering that it's also in proximity to 1.7375 long term structural resistance. Firm break of 1.6856 could set up a medium term corrective fall through 1.6606 support, with prospect of falling to as low as 1.6075 cluster support (38.2% retracement of 1.4069 to 1.7332 at 1.6086. This week's BoE rate decision and Canada employment data could be the trigger of the start of this down move. In Asia, at the time of writing, Nikkei is up 0.79%. Hong Kong HSI is down -0.35%. China Shanghai SSE is down -0.11%. Singapore Strait Times is up 0.00%. Japan 10-year JGB yield is down -0.0010 at 0.602. Overnight, DOW rose 0.28%. S&P 500 rose 0.15%. NASDAQ rose 0.21%. 10-year yield dropped -0.010 to 3.959. |
AUD/USD Daily Report Daily Pivots: (S1) 0.6663; (P) 0.6701; (R1) 0.6755; More... AUD/USD's recovery was rejected by 55 4H EMA and retreated sharply since then. Intraday bias remains neutral first. While deeper fall cannot be ruled out, strong support should be seen from 0.6594 to complete to corrective pattern from 0.6898. On the upside, break of 0.6738 resistance will turn bias back to the upside for retesting 0.6894/8 resistance zone. However, sustained break of 0.6594 will dampen this view and bring deeper fall towards 0.6457. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 22:45 | NZD | Building Permits M/M Jun | 3.50% | -2.20% | -2.30% | | 23:01 | GBP | BRC Shop Price Index Y/Y Jun | 7.60% | 8.40% | | 23:30 | JPY | Unemployment Rate Jun | 2.50% | 2.60% | 2.60% | | 00:30 | JPY | Manufacturing PMI Jul F | 49.6 | 49.4 | 49.4 | | 01:30 | AUD | Building Permits M/M Jun | -7.70% | -7.90% | 20.60% | | 01:45 | CNY | Caixin Manufacturing PMI Jul | 49.2 | 50.3 | 50.5 | | 04:30 | AUD | RBA Interest Rate Decision | 4.10% | 4.35% | 4.10% | | 07:45 | EUR | Italy Manufacturing PMI Jul | 43.9 | 43.8 | | 07:50 | EUR | France Manufacturing PMI Jul F | 44.5 | 44.5 | | 07:55 | EUR | Germany Unemployment Change Jun | 15K | 28K | | 07:55 | EUR | Germany Unemployment Rate Jun | 5.70% | 5.70% | | 07:55 | EUR | Germany Manufacturing PMI Jul F | 38.8 | 38.8 | | 08:00 | EUR | Italy Unemployment Rate Jun | 7.70% | 7.60% | | 08:00 | EUR | Eurozone Manufacturing PMI Jul F | 42.7 | 42.7 | | 08:30 | GBP | Manufacturing PMI Jul F | 45 | 45 | | 09:00 | EUR | Eurozone Unemployment Rate Jun | 6.50% | 6.50% | | 13:30 | CAD | Manufacturing PMI Jul | 48.9 | 48.8 | | 13:45 | USD | Manufacturing PMI Jul F | 49 | 49 | | 14:00 | USD | ISM Manufacturing PMI Jul | 46.5 | 46 | | 14:00 | USD | ISM Manufacturing Employment Index Jul | 42.3 | 48.1 | | 14:00 | USD | ISM Manufacturing Prices Paid Jul | 41.8 | | 14:00 | USD | Construction Spending M/M Jun | 0.60% | 0.90% |
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