In this article, we have covered the highlights of global market news about the AUD/JPY, GBP/USD, NZD/USD and USD/CNH.
AUD/JPY Price Analysis: Reaches weekly low on weaker China PMI
In the Asian session on Monday, the AUD/JPY pares intraday gains while accepting offers around about 94.90. After dismal China PMI data, the cross-currency pair pivots away from the resistance line of the one-week-old symmetrical triangle.
In October, China’s official NBS Manufacturing PMI fell to 49.2 from 50.0 predicted and 50.1 in September. In addition, the Non-Manufacturing PMI fell to 48.7 from 51.9 market expectations and 50.6 earlier readings. Following the release of the statistics, Reuters reported that “China’s manufacturing activity unexpectedly decreased in October, an official survey showed on Monday, knocked down by falling global demand and severe COVID-19 controls, which impacted output.”
However, it should be observed that the RSI (14) is challenging the positive MACD indications, which suggests that there may not be much more opportunity for the quotation to fall.
Having said that, the bottom line of the above triangle, which is close to 94.50, may be the current target for AUD/JPY bearish. The 200-HMA level around 94.40, however, would be a barrier to the pair’s further decline.
GBP/USD Price Analysis: Around 1.1600, the 20-EMA provides support for the cable.
In the Asian session, the GBP/USD pair has above the immediate barrier of 1.1600 despite the US dollar index performing weakly (DXY). Prior to the Federal Reserve’s announcement of its monetary policy, the DXY is performing poorly within a constrained range (Fed).
Meanwhile, despite an increase in 10-year US Treasury rates to 4.05%, the risk-on urge continues to seem strong. After posting 4% weekly gains, S&P500 futures have increased their losses to 0.3%.
Pound bulls have shown a perpendicular rally after a breakout of the symmetrical triangle chart pattern on a four-hour time frame. The chart pattern’s trendlines were produced with the upward trendline starting from the low on October 12 at 1.0924 and the downward trendline starting from the high on October 5 at 1.1496.
After making a rapid upward advance to go close to the 20-period Exponential Moving Average (EMA) around 1.1580, the asset has settled, giving market players a good chance to execute long positions. The 50-period Exponential Moving Average (EMA) at 1.1400 is also moving upward, which strengthens the upward filters.
NZD/USD is struggling at 0.5800 due to unfavorable Chinese PMI data.
In the Tokyo session, the NZD/USD pair saw selling pressure as it tried to pass the crucial threshold of 0.5810. In order to exceed the immediate barrier of 0.5810, the asset faced significant obstacles. Kiwi bulls are negatively impacted by depressing Chinese PMI data as well as a resurgence of risk aversion due to growing concern about the Federal Reserve’s (Fed) monetary policy.
According to the National Bureau of Statistics, China’s official Manufacturing PMI came in lower than expected, at 49.2, compared to 50.0 expectations and the previous release of 50.1. Additionally, the Non-Manufacturing PMI came in substantially lower than expected at 48.7 compared to 51.9 and the previous report of 50.6. It seems that the no-tolerance Covid-19 policy is still in effect, which has put pressure on economic activity.
As yields have stabilized after a rocky start, the risk aversion concept is gaining hold. While the S&P500 futures have increased their losses, the 10-year US Treasury rates have increased to 4.05%.
Additionally, the fourth rate increase by the Fed is anticipated to be 75 basis points (bps).
USD/CNH climbs beyond 7.2800 as China PMIs decline, the Fed acts, and the US NFP is anticipated
As China’s monthly activity report displeases the offshore Chinese yuan (CNH) purchasers, USD/CNH keeps buyers on the table for the third straight day to Monday, gaining 0.23% intraday at 7.2850 by press time. Concerns about the dragon nation’s Covid problems and worries about the aggressive Fed action also give pair buyers optimism.
However, the official NBS Manufacturing PMI for China for October fell to 49.2 from 50.0 anticipated and 50.1 previous. In addition, the Non-Manufacturing PMI fell to 48.7 from 51.9 market expectations and 50.6 earlier readings. Following the release of the statistics, Reuters reported that “China’s manufacturing activity unexpectedly decreased in October, an official survey showed on Monday, knocked down by falling global demand and severe COVID-19 controls, which impacted output.”
Due to the safe-haven character of the US dollar, the news of Macau’s closure of a casino resort and worries coming from Russia further support the rise in the USD/CNH. Following an attack on its Black Sea fleet, Russia, which invaded Ukraine on February 24, halted its participation in the Black Sea agreement on Saturday for a “indefinite term,” according to Reuters. As a result, Russia could no longer “guarantee the safety of civilian ships” travelling under the agreement.
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