18th September 2020 - AUD/USD: Recalls familiar area near 0.7300 after a volatile day

Good Morning,

Market Headlines

A fall in the tech sector dragged the major benchmarks, a day after the Federal Reserve disappointed the many who had hoped for a more dovish outcome. The Dow lost 129.94 points (0.46%), S&P 500 fell 28.42 points (0.84) and the Nasdaq dropped 140.19 points, (1.27%). The BoE kept policy settings unchanged, but did say it was studying negative rates. Commodities, Brent crude oil futures rose 2.7% to $43.35, copper rose 0.6%, iron ore fell 2.1% to $121.55, and gold fell 0.7%.


AUD/USD: 0.7267 – 0.7315

EUR/USD: 1.1771 – 1.1852

GBP/USD: 1.2866 – 1.2998

USD/JPY: 104.53 – 104.86

USD/CAD: 1.3160 – 1.3236

NZD/USD: 0.6686 – 0.6756

AUD/JPY: 76.07 – 76.56

AUD/NZD: 1.0819 – 1.0882

AUD Thoughts

- AUD/USD keeps the recovery moves from the weekly low of 0.7257 after declining from 0.7312.

- Post-FOMC US dollar strength crushed strong read of Australia’s August month jobs report just to recall buyers afterward.

- News that the Fed prepares for second stress test weigh market sentiment off-late.

- Brexit headlines, vaccine hopes and mixed data triggered the quote’s pullback

Looking forward, a lack of major data/events on the calendar may push traders to watch over risk catalysts for fresh impetus. This also gives hope of consolidation in prices after the bulls’ dominance so far during this week.

The 21-day SMA near 0.7275 and an ascending trend line from August 12, currently around 0.7220, act as strong downside supports.

Event Risk Data Today

Japan: CPI Inflation (prior: 0.3%, market f/c: 0.2%).

UK: Retail Sales (market f/c: 0.8%).

US: September’s Uni. of Michigan consumer sentiment expecting a slight uptick in August (prior: 74.1, market f/c: 75.0). The August leading index (prior: 1.4%, market f/c: 74.9). The FOMC’s Bullard will speak on the Covid recovery plan