US equities pared early losses, leaving the S&P500 up 0.1%, after indications the debt ceiling may be extended and some upbeat economic data. The US ADP survey come in at 568K, better than anticipated, hinting at a solid US Nonfarm Payroll report. The US dollar and safe-haven currencies outperformed, while bond yields fell. US 2yr treasury yields rose from 0.29% to 0.30%, while the 10yr yield fell from 1.57% to 1.51%.
Commodities: Brent crude oil futures fell 2.0% to $81, copper fell 0.7%, and gold rose 0.2%.
Overnight Currency Range
AUD/USD 0.7226 0.72915
EUR/USD 1.1529 1.1600
GBP/USD 1.3545 1.3630
USD/JPY 111.20 111.79
NZD/USD 0.6876 0.698
USD/CAD 1.2579 1.2647
USD/CNH 6.4470 6.4704
AUD/JPY 80.54 81.40
AUD/NZD 1.0441 1.0522
After reaching a daily low at 0.7225, the AUD/USD pair trims some of its losses, stills down some 0.22%, is trading at 0.7275 during the New York session at the time of writing. A dismal market sentiment struck the Asian and the European session. Surging energy prices, and worldwide higher yields, spurred a sell-off in the global equity markets. That mood carried on in the New York session until Senator Mitch McConnell, the leader of the Republicans, offered a short-term debt limit increase that would last through November.
The AUD/USD dipped to a daily low at 0.7225 but bounced off the lows and is near the week’s tops. The daily moving averages remain well above the spot price, suggesting that the downtrend bias stills. For AUD/USD buyers to regain control, they need a daily close above the 50-day moving average (DMA), lying at 0.7306. In case of that outcome, it would expose key resistance levels. The first one would be 0.7350, followed by the 100-DMA at 0.7437, and then 0.7500.
On the other hand, for sellers to resume the downtrend, they need a daily close under 0.7300. Once that is achieved, the AUD/USD pair could fall towards 2021 lows around 0.7105, but it would find some hurdles on the way. The key support levels on the way down would be 0.7200 and 0.7150. The Relative Strength Index (RSI) is at 48, edging towards lower readings, suggesting downward pressure remains
Event Risk Data Today
Australia: Payrolls for the week ending September 11 will be materially impacted by the NSW and Vic delta lockdowns. AiG Performance of Services Index(Sep) on the macroeconomic
China: The market is forecasting September foreign reserves to be $3,220bn, little changed from August and the first half of 2021.
US: Initial jobless claims for the week ending Oct 2 are expected to be modestly lower than the last print (market f/c: 349k). The FOMC’s Mester will speak on inflation dynamics