The Australian dollar trades higher against the US Dollar adding 0.20% at 0.6846 close to three-week highs supported by positive headlines from the China-U.S. trade negotiations.
RBA kept the cash rate unchanged at it’s December 3rd meeting as it assessed that risks had lessened recently. The Australian economy has reached a turning point and a growth of 3% expected for 2020. Low-interest rates and tax cuts support growth.
Reserve Bank of Australia has already cut cash rates three times in 2019 with expectations now looking for a 0.25% rate cut in February and more in the second half of 2020.
The S&P rating agency warned that the fiscal stimulus in Australia might place the country’s AAA rating under pressure, while last week Moody’s credit rating reduced Australian growth forecast to 2.2% for 2020.
Aussie Economic Data Disappoints
The economic data from Australia disappoints investors. The US ADP report for November came in at 67k and missed the 137k forecast. Aussie ISM non-manufacturing report came in at 53.9 also below analysts expectations of 54.5. Retail Sales s.a. was another disappointment as it came in at 0%, below forecasts of 0.3% in October, and the Trade Balance came in at 4502M, below estimates of 6100M in October.
Australian dollar started a strong rebound in December getting a hand from stronger data out of China. The Caixin services PMI came in at 53.5 above forecasts of 51.2.
Traders will focus on U.S. calendar and the Nonfarm Payrolls report, the expectations are for 168K, the previous reading register at 128K. The Unemployment Rate is expected at 3.5% below the last reading of 3.6%. Michigan Consumer Sentiment will be released at 15:00GMT with projections at 96.5.
AUDUSD Technical Levels to Watch
AUDUSD short term momentum is positive now as the pair trades above the 50 and 100-day moving average. On the upside, the first hurdle for the pair stands at 0.6847 today’s high and then at 0.6905 the top from November 8th. A convincing break above that level will attract more bulls for an attempt up to the 200-day moving average at 0.6914.
On the other hand, immediate support for AUDUSD will be met at 0.6829 today’s low while the next critical support stands at 0.6810 where the 50 and 100-day moving averages cross. A break below will have negative implications for the pair and might open the way for a move down to 0.6761.More content