Australian Dollar Holds Ground as Evergrande Makes a Payment. Can AUD/USD Move Up?

Australian Dollar, AUD/USD, US Yields, Evergrande, RBA – Talking Points

  • The Australian Dollar noticed early stress earlier than Evergrande made good
  • APAC equities transferd larger on the information as sentiment turned constructive
  • US yields rise as inflation fears develop. Will AU-US spreads drive AUD/USD?

Overnight, S&P 500 hit a document excessive whereas US Treasury yields backed off 2 foundation factors from 5-month highs. US 2-year break-evens implied an inflation fee of three.22% at one stage earlier than settling again to three.11%. Industrial metals pulled again from the latest highs.

Evergrande averted default by making a US$83.5 million bond coupon cost right now, in response to the Shenzen primarily based Securities Times newspaper. Within the covenant of the bond is a 30-day grace interval. Today’s cost was required 29 days in the past. There are a number of extra curiosity funds due within the coming weeks.

Until this cost information got here by means of, threat property had been beneath stress. Snap (Snapchat) had reported disappointing earnings after the US shut and gave a warning of slowing digital promoting. Other tech shares declined on the information.

The Evergrande headline noticed threat property appeal to some patrons. APAC equities had been largely larger on the day. The US Dollar dipped somewhat, yen weakened a contact and the commodity linked currencies rose a fraction

The Australian Dollar firmed on the information even because the RBA made an unscheduled bond buy to defend its 3-year bond yield goal of 0.10%. AUD 1 billion April 2024 of Australian authorities debt was purchased.

Ahead, Fed Chair Powell is due to participate in a panel dialogue. US PMI numbers are additionally due out.

AUD/USD Technical Analysis

The Australian Dollar traded at its highest degree since July yesterday as short-term momentum took out the earlier excessive of 0.74782.

The 10-day and 21-day easy transferring averages (SMA) have a constructive gradient. The 10-day SMA crossed above the 100-day SMA which can point out bullish momentum.

Above the market, the 260-day SMA at 0.75347 may provide resistance. A transfer above that degree may see bullish momentum additional evolve.

The value not too long ago moved outdoors the higher band of the 21-day primarily based Bollinger Band and has since moved again inside it. This is a doable bearish sign.

The nearest help and resistance ranges are the latest high and low of 0.73788 and 0.75465 respectively.


Chart crated in TradingView

— Written by Daniel McCarthy, Strategist for

To contact Daniel, use the feedback part beneath or @DanMcCathyFX on Twitter

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