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2 Jan 2024

AUD/USD declines into 0.6750 as Greenback lurches higher, China data beat bolsters Aussie

  • AUD/USD sheds eight-tenths of a percent on Tuesday.
  • Safe-haven bids into the USD are on the rise, propping up US Dollar pairs.
  • Despite Greenback gains, Aussie remains well-bid following China PMI upswing.

The AUD/USD fell on Tuesday, sliding 0.8% on the day to kick off the first official trading day of 2024 with broader markets tipping back into the US Dollar (USD), though Aussie (AUD) losses were limited by a better-than-expected print in China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) in December.

Sky-high market bets of rate cuts from the Federal Reserve (Fed) are beginning to ease as investors walk back rate cut forecasts to 150 basis points through 2024, and hobbled economic data from the US is crimping investor sentiment as markets gear up for the year’s first Nonfarm Payrolls (NFP) print due on Friday.

China’s December Manufacturing PMI came in slightly above expectations, printing at 50.8 versus the forecast decline from 50.7 to 50.4, bolstering risk appetite in the Aisa market session and helping to keep the AUD bid against the majority of major currencies, though a softening of the US S&P Global Manufacturing PMI for the same period missed expectations, souring risk appetite and sending the US Dollar higher across the board.

Softer US data props up USD bids

The US Manufacturing PMI in December sunk to a four-month low of 47.9 versus the market forecast of a steady print of 48.2.

The market is gearing up for December’s US NFP print on Friday, which is forecast to decrease from 199K to 168K, but before that will be Thursday’s China Caixin Services PMI which last printed at 51.5, as well as US ADP Employment Change, which is expected to tick up slightly from 103K to 115K.

Wednesday also brings a heavy US-data focus, with the ISM Manufacturing PMI for December forecast to improve from 46.7 to 47.1, as well as the latest Fed Meeting Minutes, which investors will be pouring over to try and catch a glimpse of how far Fed policymakers are leaning towards beginning the next rate cut cycle.

AUD/USD Technical Levels

Tuesday’s AUD/USD decline has sent the pair tumbling below the 200-hour Simple Moving Average (SMA) for the first time since the pair’s strong upshot in mid-December, settling the AUD/USD into a two-week low near 0.6750.

The pair is down over 1.5% from last week’s peak at 0.6870, and the AUD/USD could be set for an extended backslide with technical indicators pinned into overbought territory, though a technical floor is pricing in from just south of the 0.6600 handle with the 50-day SMA confirming a bullish cross of the long-run 200-day SMA.

AUD/USD Hourly Chart

AUD/USD Daily Chart

AUD/USD Technical Levels

 

Jan 2, 2024

WTI falls back towards $70 per barrel as Crude Oil extends declines

West Texas Intermediate (WTI) Crude Oil bids fell on Tuesday following a reversal from the day’s early peak near $73.70, sending barrel bids back toward the $70.00 handle as energies markets face downside pressure from multiple fronts.
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Jan 2, 2024

EUR/GBP trades neutral, with bulls struggling despite defending 200-day SMA

In Tuesday's session, the EUR/GBP hovered around 0.8670 with slight losses after finding support at a low of around 0.8645.
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