AUDUSD remains under pressure in a bearish trend

Australia CPI posts a gain however further easing may be needed.

Charts (6)

The US Dollar was bullish against most of its major pairs on Wednesday with the exception of the JPY. On the US economic data front, the Mortgage Bankers Association's Mortgage Applications rose 1.7% for the week ending October 23rd, compared to -0.6% in the previous week. Finally, Wholesale Inventories fell 0.1% on month in the September preliminary reading (+0.4% expected), compared to a revised +0.3% in the August final reading.

On Thursday, Initial Jobless Claims for the week ending October 24th are expected to fall to 770K, from 787K in the week before. Continuing Claims for the week ending October 17th are expected to decline to 7,700K, from 8,373K in the prior week. GDP for the third quarter advanced reading is expected to soar to +32.0% on quarter, from -31.4% in the second quarter third reading. Finally, Pending Home Sales for September are expected to rise 3.0% on month, compared to +8.8% in August.       

The Euro was mixed against all of its major pairs. In Europe, France's INSEE has released October Consumer Confidence Index at 94 (vs 93 expected).

The Australian dollar fell the most against all of its major pairs after declining over 1% or 73 pips in Wednesday's trading. Australia's headline CPI rose by 1.6% in the third quarter which was slightly above the 1.5 estimate compared to a decline of 1.9% in the second quarter. The increase was driven by rebounds in childcare, automotive fuel and child education costs. Even with a gain in the CPI, Bloomberg economists believe the gain provides no reason for the RBA to cut back on further easing at its November board meeting.

  Looking at the daily chart of the AUD/USD the pair pulled back from a declining trendline that is acting as resistance as the bearish trend channel remains in play after the 20-day moving average crossed below the 50-day moving average back on the 14th of Oct. We anticipate further pressure down to test 0.700 support and ultimately 0.692 in extension. A break above 0.725 would be a strong bullish signal and a possible sign of a trend reversal to the upside. 



Source: GAIN Capital, TradingView

Happy Trading.

More from Forex

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.