The Australian dollar is the day’s loser, presently off its lows by still showing a net 0.3% decline to the U.S. buck and a 0.4% loss versus both the yen and the New Zealand dollar. The Australian government issued a report today prognosticating that iron ore prices are set to tumble 20% this year on the back of rising global supply and falling Chinese demand. Iron ore is one of Australia’s key exports, so the projection took a toll on the Aussie, which, after four consecutive weeks of gains versus the U.S. dollar, had been looking ripe for a correction. There have also be reports of specific AUDNZD selling throughout the day, which has driven the cross to three-week lows.
AUDUSD logged a two-session low at 0.7826 during the London AM session, and has since remained heavy. The pair needs to close below Friday’s closing level, to affirm a picture of weakening upside momentum, but further more, below the 0.7813, which is the 50% Fibonacci level, set since September 8. Hence strong resistance comes at 61.8% Fibonacci level at 0.7885. Next domestic focus will be the release of November building approvals on Tuesday, which we expect will dip 0.5% after the 0.9% gain in October. The next RBA meeting is on February 6, where the cash rate expected to remain at 1.5%.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.