AUD/USD is struggling to make new highs after hitting a short-term resistance zone.
How low will AUD/USD go before the bulls show up again?
Before moving on, ICYMI, yesterday’s watchlist looked at USD/JPY’s trend line resistance ahead of the FOMC decision. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. headline PPI for November: 0.0% m/m as expected (-0.4% m/m previous); core PPI at 0.0% m/m (0.2% m/m forecast, 0.0% m/m previous)
EIA’s crude oil inventories showed a 4.3M-barrel draw from last week (-1.9M forecast, -4.6M previous)
The Fed held off on interest rate changes for the third consecutive meeting and stated that members are ready to switch focus to when interest rates may need to be lowered as inflation continues to fall
New Zealand’s GDP for Q3: -0.3% q/q (0.2% q/q forecast, 0.5% q/q previous)
Japan’s core machinery orders rose by 0.7% m/m in October but remained down year-on-year as global growth concerns limited new investment spending
Melbourne Institute’s Australian inflation expectations fell from 4.9% y/y to 4.5% y/y in December
RICS U.K. house price balance showing the gap between those who see higher and lower prices rose from -61 to -43; buyer inquiries stabilized amid expectations that interest rates have peaked
Australia’s employment change for November: 61.5K (10.6K forecast, 42.7K previous); Unemployment rate rose from 3.8% to 3.9%
Japan’s October industrial production revised from 1.0% m/m to 1.3% m/m
Switzerland’s PPI for November: -0.9% m/m (0.1% m/m forecast, 0.2% m/m previous)
SNB kept its interest rates steady at 1.75% as expected, and said that it would “continue to monitor the development of inflation closely, and will adjust its monetary policy if necessary”
Price Action News
With not a lot of market-moving data printed in the Asian and early European sessions, traders were focused on repricing their Fed interest rate bets.
In case you missed it, Fed Governor Powell and his team didn’t make any changes to their policies. What they did was sound less hawkish compared to the last meeting which likely encouraged USD sellers to pounce.
USD is currently in the red against ALL of its major counterparts and is registering its biggest losses against JPY and AUD.
Upcoming Potential Catalysts on the Economic Calendar:
BOE’s policy decision at 12:00 pm GMT
ECB’s policy decision at 1:15 pm GMT
U.S. retail sales numbers at 1:30 pm GMT
U.S. initial jobless claims at 1:30 pm GMT
ECB’s presser at 1:45 pm GMT
BusinessNZ manufacturing index at 9:30 pm GMT
Australia’s PMIs at 10:00 pm GMT
China’s data dump at 2:00 am GMT (Dec 15)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
Today’s economic calendar may be BUSY with central bank decisions but we already got our eyes on possibly selling USD lower.
AUD/USD, for example, could provide a potential trade as it struggles to make new weekly highs at the .6700 psychological handle near today’s R1 (.6710) Pivot Point level.
A pullback to the .6660 – .6680 area of interest may be in the cards if we fail to see some pickup in AUD demand in the next couple of hours.
Today’s U.S. retail sales and initial jobless claims may provide the catalyst for either a stronger AUD/USD or a deeper pullback for the pair. Retail sales are expected to print slight dips compared to the previous month while the initial jobless claims may print same(ish) numbers against last week’s figures.
Watch how AUD/USD reacts to a possible retest of the previous resistance zone! A burst of USD demand may drag AUD/USD to its .6620 Pivot Point level.
But if there aren’t enough USD buyers and AUD/USD regains some buying momentum from its current levels or from the .6660 – .6680 area of interest, then we may see a trip to the previous .6720 highs if not new weekly highs before the week ends.
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