Australian Dollar, AUD/USD, US Dollar, RBA, Market Sentiment – Talking Points
- Asia-Pacific markets poised for a risk session after Wall Street shares surge
- RBA Policy Statement Set To Cross The Wire, Putting Aussie Dollar In Focus
- AUD/USD momentum slows, prices form Doji candlestick near 50% Fib
Friday Asia-Pacific Outlook
Stock markets in Asia-Pacific could end the week on a positive note after an impressive string of earnings reports from Wall Street firms, including Amazon, Snap and Pinterest, boosted an already risky move. Despite improving market sentiment, the risk-prone Australian dollar struggled against the US dollar during the overnight session, even amid broader weakness in the greenback.
That US dollar weakness reflects poor expectations for the forthcoming report on nonfarm payrolls. Analysts see 134,000 jobs added in January, according to the Bloomberg consensus forecast. That would be the weakest job count since December 2020, when the US lost 306,000 jobs. That said, a better-than-expected print could revive the US dollar, as it would likely bolster bets on the Fed rate hike.
Stock and bond markets remain closed in China, including Hong Kong, over the Lunar New Year holiday. Those markets will reopen on Monday. The Japanese yen fell against most of its peers overnight, which may help Japan’s Nikkei 225 index reverse Thursday’s losses. WTI and Brent crude prices rose overnight, with the US benchmark breaking above $90 a barrel for the first time since 2014.
Traders will review the Reserve Bank of Australia’s policy statement today, seeking insight into policymakers’ thinking processes. The market will be pricing in nearly 100 basis points of the RBA interest rate by the December meeting, contrary to RBA Governor Lowe’s subdued outlook. The RBA chief said at an economic forum earlier this week that a 10-bp hike this year is not off the table, in his first apparent capitulation to judge hawks.
AUD/USD Technical Forecast
AUD/USD is grappling with the 50% Fibonacci retracement level after an indecisive overnight price action represented by a Doji candlestick. Upward momentum from the lows of late January when a bullish RSI divergence formed appears to be waning. That said, prices could fall in the near term if the bulls are unable to move higher.
AUD/USD Daily Chart
Chart created with Trading Display
— Written by Thomas Westwater, analyst for Referus
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