AUD - Australian Dollar
After testing 0.7800 during American trading on Friday, the AUD/USD fell back towards 0.7730 after the weak US non-farm payrolls number before recovering to close out the week in positive territory. This is now the 10th consecutive week of positive gains for the Australian Dollar against the greenback.
Looking to the day ahead, we have Aussie retail sales first off the docket before attention will shift offshore to Chinese CPI data for December. As we have said before, given China’s increasing importance for the Australian and global economy, look for this release to set the tone for the rest of the week.
Last weeks high of 0.7817 will be a level of interest to traders this week if we get off to a positive start. Although technical indicators point to an overbought Australian Dollar, the path to levels above 0.7900 is a clear one. First lines of downside support are seen around 0.7730 with moves below this level expected to meet bids at the 0.7700 handle.
The main narrative in financial markets on Friday was an advancing greenback. Against a backdrop of selling pressures throughout the week, the US Dollar rose across the board despite a disappointing Nonfarm Payroll report. The thinking here is that the higher than expected job loss count will lead to more fiscal stimulus in the hope of boosting employment. Confirming this, President-elect Biden immediately called for an increase in the direct payments of $2000 and further fiscal support.
The greenback strength saw the Euro underperform as EUR/USD neared 1.220 during trade. USD/JPY settled at a three-week high around 104.00 with traders now eyeing the key 104.50 level.
0.7700 - 0.7820 ▲
0.6300 - 0.6415 ▲
1.7400– 1.7550 ▼
1.0680 - 1.0750 ▲
0.9820 - 0.9900 ▲