Forex: AUD/USD weaker post NAB confidence; risk still to the upside
Forex pairs in this Article »
AUD/USD
FXstreet.com (Barcelona) - The terrible business confidence in Australia, which came at -9 in November against -1 in October, representing the lowest reading since April 2009, has weakened the Australian Dollar to the point of breaking Monday's low through USD 1.0466 and set a new weekly low at USD 1.0460. The news follow awful trade numbers in China published yesterday.
According to Global FX founder Greg McKenna, "there is reluctance to borrow despite low rates, not good news". He writes that "the key point here is that Business Confidence and conditionss suggests that the RBA cuts are having little if any impact on the Business Community and certainly yesterday's home loan data showed that demand for housing credit remains subdued."
Since we have seen a 20+ pips run to the downside in an otherwise muted Asian session, which may come as an exaggerated move to some traders, it is hard to imagine sellers up for the challenge of reinstating further orders and create follow through. Unless a decisive break below Dec 7 low at 1.0460 occurs, holding for now, consolidation at the top end of AUDUSD range is expected ahead of Europe. Resistance at 1.05-1.0510, as previously noted by NAB, should be fleeting for the time being.
"There is nothing in the NAB data that is going to impact the Aussie materially in the next day or week given the love affair that offshore investors have with the AUD" predicts Mr. McKenna, who continues to call for interest rates biased towards 2.5% into 2013, "and the risk in time is that they need to fall a little further" he adds.
According to Global FX founder Greg McKenna, "there is reluctance to borrow despite low rates, not good news". He writes that "the key point here is that Business Confidence and conditionss suggests that the RBA cuts are having little if any impact on the Business Community and certainly yesterday's home loan data showed that demand for housing credit remains subdued."
Since we have seen a 20+ pips run to the downside in an otherwise muted Asian session, which may come as an exaggerated move to some traders, it is hard to imagine sellers up for the challenge of reinstating further orders and create follow through. Unless a decisive break below Dec 7 low at 1.0460 occurs, holding for now, consolidation at the top end of AUDUSD range is expected ahead of Europe. Resistance at 1.05-1.0510, as previously noted by NAB, should be fleeting for the time being.
"There is nothing in the NAB data that is going to impact the Aussie materially in the next day or week given the love affair that offshore investors have with the AUD" predicts Mr. McKenna, who continues to call for interest rates biased towards 2.5% into 2013, "and the risk in time is that they need to fall a little further" he adds.
Free Annual Reports
