ASIA: Coming Up In Asian Markets On Thursday

The AUD/USD had a range overnight of 0.6907-0.6941, Asia is trading around {AUDUSD Curncy}. The AUD is consolidating its recent gains above 0.6900. The AUD price action has been very bullish but the last 100 points have all been about the USD and the implication that by the FED rate checking USD/JPY they are tacitly acknowledging they are comfortable with a weaker USD. It is not to much of leap really when you look at how the USD is being debased, particularly against real hard assets ie. precious metals. The USD index has been pretty stable for the last 6-8 months but this is due to the weakness and importance of the Yen in this basket. A stronger Yen would put the USD in a precarious position and this sell-off could really pick up pace and currencies like the AUD and NZD would be huge beneficiaries. In the Asian session, price does look a little stretched in the short-term but suspect dips will continue to be supported.  The first buy-zone is back toward the 0.6850-0.6870 area and then 0.6780-0.6800. The bulls will now be looking to build longs looking for a move back to test the 0.7000-0.7100 area initially.

• CFTC Data up to 20/01/2026 shows Asset managers maintained their reduced shorts, -31659(Last -33392). The Leveraged community has been building a decent long coming into the new year but pared this pack slightly, +24741(Last +26697). The way the week ended suggests more AUD longs may have been accumulated.
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6825(AUD439m). Upcoming Close Strikes : 0.6730(AUD1.28b Jan28) - BBG
• The AUD/USD Average True Range for the last 10 Trading days: 53 Points
• Data/Event: NAB Business Confidence

Fig 1: AUD/USD spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

• RES 4: 1.3929 High Jan 16 and a reversal trigger     
• RES 3: 1.3879 High Jan 20
• RES 2: 1.3846 50-day EMA 
• RES 1: 1.3820 20-day EMA
• PRICE: 1.3693 @ 16:11 GMT Jan 26
• SUP 1: 1.3672 Low Jan 26
• SUP 2: 1.3643 Low Dec 26 and the bear trigger 
• SUP 3: 1.3576 Low Jul 23 ‘25
• SUP 4: 1.3540 Low Jun 16 and a key medium-term support   

A sharp sell-off in USDCAD on Friday cancels a recent bull theme and instead highlights a resumption of the bear leg that started on Nov 5 ‘25. Sights are on the next key support and bear trigger at 1.3643, the Dec 26 low. A break of this level would strengthen a bear theme and open 1.3567, the Jul 23 ‘25 low. On the upside, key short-term resistance to monitor is 1.3846, the 50-day EMA.    

• Treasuries look to finish moderately higher Monday - inside session range on two-way positioning ahead of Wednesday afternoon's FOMC policy annc.
• The Fed appears poised to deliver a neutral hold, with heated debate continuing about the appropriate pace of easing over the coming year. Note, betting markets show swing in Fed chair nominee with current BlackRock fixed income CIO Rick Rieder's implied odds rising to appr 50% as Kevin Warsh declines to 30%.
• Projected rate cut pricing largely steady vs. late Friday levels (*): Jan'26 at -0.7bp, Mar'26 at -4.2bp, Apr'26 at -7.7bp (-8.2bp), Jun'26 at -19.2bp (-18.7bp), first full cut priced in at Jul'26: -26.7bp (-25.2bp).
• Currently, TYH6 trades +5.5 at 111-27 (111-22.5 low / 111-30 high) on 1.3M volume. Initial firm resistance is at the 20-day EMA, currently at 112-03. The 50-day EMA is at 112-11+. The area between the 20- and 50-day averages represents a key resistance zone. For bears, a resumption of the bear leg would refocus attention on the bear trigger at 111-09, the Jan 10 low.
• Headline durable goods orders rose 5.3% M/M (4.0% expected, prior -2.1%) but this is a notoriously volatile series and it was core capital goods orders that truly impressed. They rose 0.7% M/M (0.3% expected) albeit with a 0.2pp downward revision to October's growth (to 0.3%).
• Look ahead to Tuesday: ADP Weekly NER Pulse kicks data off at 0815ET, FHFA House Price data at 0900, Richmond Fed Mfg index along with Conf. Board Consumer Confidence at 1000ET, Dallas Fed Services Activity at 1030Et. Treasury auctions $70B 5Y notes at 1300ET (91282CPW5).