AUD: A$ Softer Following Weekend US Tariff News, Retail Sales Coming Up
AUDUSD continues to fall following the US confirmation of tariffs on Canada, Mexico and China from Tuesday. The pair is down 1.2% to 0.6142 after a trough of 0.6138, the lowest since mid-January, after being the only G10 currency to rise against the greenback on Friday. The USD index has jumped 0.9%.
- AUDUSD fell to a low of 0.6131 on January 12, which was the lowest since the Covid-impacted March 2020.
- Initial support levels at 0.6199 and 0.6165 have been broken opening up 0.6131, the bear trigger. The medium-term AUDUSD trend remains bearish and it continues to trade below its 50-day EMA of 0.6314, this also makes initial resistance.
- The yen underperformed on Friday but is stronger today leaving AUDJPY down 1% to 95.47. AUDNZD is range trading and is 0.1% higher at 1.1026. AUDEUR rose to 0.6067 earlier but is now trending lower and is around 0.5996. AUDGBP is down 0.3% to 0.4997.
- Markets are reacting to the tariff news with the ASX is down 2.0% and the NZX -1.4%, other markets are still closed. Oil has jumped with WTI up 2.1% to $74.05/bbl. Copper is down 1.5% and iron ore has fallen below $104/t.
- Today December /Q4 retail sales, January MI inflation gauge and December building approvals print. Q4 sales volumes are forecast to rise 0.8% q/q, which would be the second consecutive quarterly increase.
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Historical bullets
JGB TECHS: (H5) Returns Lower
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 144.48/146.53 - High Nov 11 / High Aug 6
- PRICE: 142.12 @ 15:01 GMT Jan 03
- SUP 1: 141.65 - Low Dec 30
- SUP 2: 141.56 - 1.764 proj of the Aug 6 - Sep 3 - 9 price swing
- SUP 3: 141.05 - 2.000 proj of the Aug 6 - Sep 3 - 9 price swing
Markets slipped on the hawkish Fed and are yet to fully recover, touching 141.65 on the way lower. Medium-term trend signals on the continuation chart continue to point south. A resumption of the trend would pave the way for a move towards 141.56, a Fibonacci projection point on the continuation chart. A stronger recovery would open 144.48, the Nov 11 high. Further out, key resistance is at 146.53, the Aug 6 high (cont).
USDCAD TECHS: Bull Flag Highlights A Clear Uptrend
- RES 4: 1.4669 2.0% 10-dma envelope
- RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4392 @ 15:50 GMT Jan 3
- SUP 1: 1.4336 Low Dec 20
- SUP 2: 1.4307/4232 20-day EMA / Low Dec 17
- SUP 3: 1.4136 50-day EMA
- SUP 4: 1.4011 Low Dec 5
USDCAD is unchanged and bulls remain in the driver’s seat. The latest pause appears to be a flag formation - a bullish continuation signal. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.4307, the 20-day EMA. A pullback would be considered corrective.
AUDUSD TECHS: Southbound
- RES 4: 0.6471 High Dec 9
- RES 3: 0.6408 50-day EMA
- RES 2: 0.6341 High Dec 18
- RES 1: 0.6247/6282 High Dec 30 / 20-day EMA
- PRICE: 0.6204 @ 15:21 GMT Jan 3
- SUP 1: 0.6179 Low Dec 31
- SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
A bearish trend condition in AUDUSD remains intact and the pair continues to trade closer to latest lows. Recent weakness maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. Scope is seen for an extension towards 0.6158 next, a Fibonacci projection. Initial firm resistance to monitor is 0.6282, the 20-day EMA.
