Chart of the Day AUDUSD
Potential reversal AUDUSD
As the number of cases and geographical spread (with the first case in US confirmed) of the Wuhan Coronavirus increase, this could potentially pose a dark cloud to the nascent green shoots theme, leading to rising concerns that the January market rally may not be able to sustain. However, The Asian equity markets have rebounded this morning following yesterday’s decline reflecting concerns about the potential impact of China’s Coronavirus for the Asian market. The Chinese authorities have promised to take steps to contain the spread of the disease.
Treasury Secretary Mnuchin suggested US growth could beat forecasts this year, Chinese Vice Premier Han Zheng told WEF audience that China will open its door wider and downplayed concerns that the Phase 1 deal will be at the expense of other nations.
Australia consumer confidence slipped in January: Australia Westpac Consumer Confidence Index slipped for the second month to 93.4 in January (Dec: 95.1) as consumers turned less optimistic over growth outlook with the index for “Economy 1 year ahead” dropping by 5.4%
Australian jobs for December are on tap for release overnight. Job advertisements fell by 6.7% MOM in December in seasonally adjusted terms and declined for the third straight month as somewhat of a warning shot ahead of the release. The disruptive impact of rampant forest fires isn’t helping. After declining by 25k in October and bouncing back with a 40k rise in November, December’s print will help to inform the trend. While job growth trends have been favourable in Australia over a longer period of time, wage growth has been fairly tepid.
From a technical and trading perspective, the AUDUSD is testing a pivotal near term support cluster at the .6820/40 and Potential Price reversal Zone (PPRZ). This area retains multiple support pivot points as highlighted in the chart, it also has ascending trendline support and the 100 period Volume Weighted Average Price (VWAP). Traders will be wise to watch closely how price responds in this area. If bids emerge here, watch for a close above the near term VWAP currently sited at .6865 to encourage prospects of a bullish reversal. It is worth noting that the USD is also testing its PPRZ highlighted last week.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!