In this article, we have covered the highlights of global market news about the AUD/USD, USD/CHF, USD/CAD and NZD/USD.
AUD/USD gets new demand below 0.6250 as US Inflation buzzes.
After feeling some buying activity around about 0.6240, the AUD/USD pair has firmly held its negative bias. As the risk-on urge has arisen, the asset has extended its gains to approximately 0.6280. Investors dismiss hawkish Federal Reserve (Fed) pessimism and support risk-perceived currencies.
The US dollar index (DXY) is trying to re-test Tokyo’s knee-jerk response to around 113.00, as investors flee the haven after failing to maintain near new weekly highs at 113.60.
This week’s show-stopping event will be the US consumer Price Index (CPI) statistics publication on Thursday. According to market predictions, headline US inflation might fall to 8.1%. While the core CPI, which excludes oil and food prices, may rise to 6.5%.
It is worth mentioning that September’s employment figures were positive. US Nonfarm Payrolls (NFP) were announced at 263k, above predictions of 250k. In addition, the unemployment rate was reduced to 3.5%. If inflation continues to rise, the chances of the Fed raising interest rates more aggressively rise. The fatal combination of more robust payroll statistics and rising pricing pressures will leave the Fed with little choice but to maintain its current rate hike path.
On the Australian front, Reserve Bank of Australia (RBA) Assistant Governor Luci Ellis described the neutral rate as a guide for policy rather than a destination, implying that the central bank’s planned Official Cash Rate (OCR) of 3.85% may be changed further. At the Citi Australia and New Zealand Investment Conference, she also said that inflation estimates for the next year would stay solidly anchored in the 2-3% area.
USD/CHF Price Analysis: Rising wedge gives sellers optimism below 0.9850
The USD/CHF is under pressure following the intraday low, extending the previous day’s drop from a four-month high to 0.9950 as the European session begins on Wednesday. As a result, the Swiss franc (CHF) pair remains inside a five-week-old rising wedge bearish chart pattern.
In addition to the quote’s recent weakness and the bearish pattern around the multi-day top, the negative MACD signals and the downbeat RSI (14), both of which are not oversold, have recently favored USD/CHF bears.
However, one-week-old horizontal support at 0.9915 entices intraday selling ahead of exposing the stated wedge’s support line, which is close to 0.9850 at the time of publication.
If the quotation continues negative above 0.9850, a drop to the monthly low of approximately 0.9780 is likely during the projected south-run to 0.9310.
On the other hand, the upper line of the indicated wedge, around 1.0030, limits the short-term USD/CHF upside before sending buyers towards the peaks established in June and May, respectively, around 1.0050 and 1.0065.
USD/CAD reclaims 1.3800 as emphasis switches to US inflation, oil struggles over $87
Following a knee-jerk response to approximately 1.3783 in the early European session, the USD/CAD pair has rebounded strongly. As the entire risk profile is unfavorable ahead of the US inflation report, the asset is seeking to hit the day’s high at about 1.3830. After falling to almost 3.9%, 10-year US Treasury rates have regained some of their losses.
The robust US dollar index (DXY) has also picked up bids after falling to roughly 113.00, although confidence in the comeback move is lacking. It would be interesting to see whether the asset can reclaim its new weekly high of 113.60.
This week’s big event will be the publication of the US Consumer Price Index (CPI) data on Thursday. According to early projections, headline inflation will fall to 8.1% due to low fuel costs. While the core CPI, which excludes oil and food prices, is expected to be 6.5%, up from the previous figure of 6.3%.
But first, the Federal Reserve (Fed) minutes will be closely scrutinized. The minutes will also include all Fed officials’ perspectives on interest rate goals for achieving price stability.
NZD/USD Price Analysis: Buyers want confirmation from 0.5655.
The New Zealand dollar/US dollar is struggling to preserve the previous day’s corrective recovery from a 2.5-year low, falling to 0.5580 ahead of Wednesday’s European session.
In doing so, the Kiwi pair reverses its previous two-week support line, which was at 0.5595.
The quote’s inability to cross the 100-HMA on Tuesday, although updating the weekly high, further lends weight to the retreat movements.
An upward-sloping trend line linking the recent lows, about 0.5560; however, restricts the quote’s immediate drops before leading them to the recent bottom at 0.5535.
If the NZD/USD pair continues to be harmful beyond 0.5535, which seems plausible given the absence of the oversold RSI, the south-run might target the 0.5500 level and the year 2020 bottom around 0.5470.
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