AUD/USD ANALYSIS & TALKING POINTS

  • Tug of struggle between Chinese and U.S. components dictate AUD value motion.
  • Thinning liquidity reflective in AUD/USD as markets await basic catalyst.

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AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP

The pro-growth Australian greenback is in a consolidatory section of latest being pushed and pulled by exterior world components. Primary drivers have been Chinese optimism round stimulating financial development in 2023 (boosting commodity costs) as effectively a fluctuating USD primarily based on U.S. financial information. Markets could also be barely overreacting to world โ€˜risk onโ€™ sentiment contemplating the worsening COVID scenario in China potential exposing the Aussie greenback to subsequent weak point within the coming week in addition to Q1 of 2023.

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Next week is extraordinarily mild within the midst of the festive interval with no Australian information scheduled, U.S. releases will take priority. The housing and labor markets might be in focus and supply further steering for the Fed in 2023.

ECONOMIC CALENDAR

Source: DailyFX financial calendar

TECHNICAL ANALYSIS

AUD/USD DAILY CHART

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Chart ready by Warren Venketas, IG

Daily AUD/USD value motion stays under the psychological 0.6700 assist stage. After the latest rising wedge sample (black) breakout, expectations might have been for better draw back however the AUD has managed to stay surprisingly elevated. That being stated, there’s nonetheless scope for additional decline however the Relative Strength Index (RSI) suggests market hesitancy on the midpoint 50 mark.

Key resistance ranges:

Key assist ranges:

IG CLIENT SENTIMENT DATA: MIXED

IGCS reveals retail merchants are at the moment LONG on AUD/USD, with 61% of merchants at the moment holding lengthy positions. At DailyFX we usually take a contrarian view to crowd sentiment however latest adjustments in lengthy and quick positioning lead to a short-term cautious bias.

Contact and comply withWarrenon Twitter:@WVenketas

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