SGD: USD/SGD - Consolidates Above 1.3050, Looks To Test 1.3100 & Beyond
The overnight range was 1.3057 - 1.3085, Asia is currently trading around 1.3080. USD/SGD consolidated above the 1.3040-50 area overnight as it looks to test the 1.3100 area. The move looks technically constructive and is attempting to build a base from which to move higher. In the Asian session while the 1.3040-1.3050 area continues to hold, I would be skewed long for another test of the 1.3100 area. A sustained move back above 1.3100 in USD/SGD could potentially confirm a medium-term base is in and the potential start of a new leg higher.
- The USD/SGD Average True Range for the last 10 Trading days: 45 Points
- Data: GDP
Fig 1 : USD/SGD Spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
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AUD: A$ Underperforms As Metal Prices Fall, AUDUSD Holding Above Support
Aussie underperformed on Tuesday with AUDUSD trending lower through APAC trading and then struggling to return to above 0.6500. It was pressured in the European/US sessions by the correction in gold, weakness in other metals and lacklustre equity performance. AUDUSD fell 0.4% to 0.6488 off the intraday low at 0.6473 and has started today around 0.6491. The USD index rose 0.3%.
- AUDUSD held above initial support at 0.6440, 14 October low. Technicals continue to suggest that there could be a reversal of the bear cycle begun on 17 September.
- Kiwi was one of the better performers in the G10 leaving AUDNZD down 0.3% to 1.1300. It is a bit higher on Wednesday at 1.1307.
- The yen underperformed following new LDP leader Takaichi becoming PM. Her expansionary policy stance has made markets nervous. AUDJPY rose 0.4% to 98.57 after a high of 98.78.
- AUDEUR was little changed at 0.5594 and AUDGBP was 0.1% lower at 0.4853.
- Equities were steady with the S&P flat and Euro stoxx up 0.1%. Oil prices were higher with Brent +0.9% to $61.56/bbl. Gold fell 5.3% to $4125.22/oz. Copper was down 1.7% and iron ore around $104/t.
- There are no data or events in Australia today.
AUSSIE 3-YEAR TECHS: (Z5) Strong Weekly Close
- RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
- RES 2: 96.780 - High Jun 26 (cont)
- RES 1: 96.700 - High Sep 12
- PRICE: 96.655 @ 15:17 BST Oct 21
- SUP 1: 96.280 - Low May 15 (cont.)
- SUP 2: 95.900 - Low Jan 14 (cont.)
- SUP 3: 95.760 - Low 14 Nov ‘24
Aussie 3-yr futures surged on the resumption of trade after the weekend, returning focus higher despite the break of support last week. Short-term resistance at 96.615, the Sep 12 high, has been broken, with 96.780 is the next upside target. Clearance of this level puts markets at fresh multi-month highs. 96.280 marks next major support - but markets are some way off this mark now.
NEW ZEALAND: Whole Milk Auction Price Downtrend Continues, ToT Downside Risks
The recent downtrend in whole milk powder prices continued at overnight auction result (which is held twice per month). We fell from $3696 to $3610, a drop of around 2.3%. We are now 17.5% off earlier 2025 highs for this price. The chart below overlays this whole milk powder price versus the Citi terms of trade proxy for NZ. All else equal, the weakness in whole milk prices is suggesting some downside to the terms of trade outlook. This in turn would be less supportive for NZD/USD. The Citi measure is still elevated compared to recent years though.
Fig 1: New Zealand Whole Milk Prices & Citi NZ Terms Of Trade Proxy
Source: Citi/Bloomberg Finance L.P/MNI
