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AUD/USD, China, Australian Dollar, Risk Trends: Talking Points

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With Asia-Pacific sectors set for a peaceful session, investors tidy up for a hectic one. The Chinese markets are set to close the equity and bond operations amid a week-long holiday. Meanwhile, AUD/USD aims to continue its late-week rebound after setting a new low.

Another surprising news came from New South Wales, where Gladys Berejiklian resigned after facing a corruption probe. Despite such developments, the Australian Dollar eyes a rebound against the USD. Even though the currency is trading 2.5% below its August high, it imposes a positive future outlook.

With such market developments, Australian forex brokers are looking forward to the USTR announcement. The United States Trade Representative may announce China’s non-compliance with trade terms. The announcement may disrupt several markets, keeping investors on their toes.

Contrarily, the United States non-farm payrolls numbers are garnering immense attraction. The report might significantly affect monetary policy as analysts estimate over 460k jobs added in September alone. If true, the number will double the digits achieved in August (245k). 

The week will also witness the Reserve Bank of New Zealand and the Reserve Bank of Australia announcing their respective monetary policy decisions. The market expects the RBA to stay fixated on the rate hike after disruptions caused by the outbreak of the pandemic. 

At the same time, the RBNZ might levy a 25 basis point hike from 0.25% to 0.50%. If true, it will be the first instance where the regional central bank tightens its interest rates. Besides the US rate decisions and NFP report, investors must be the most worried about Wall Street’s decision.

According to CNBC, Katherine Tai (US Trade Representative) might announce that China is not complying with the trade deal (phase one) negotiated between Washington and Beijing. The US established the deal during the Trump administration, and the USTR might even investigate potential responses to the breach.

It can include extra tariffs, resulting in possible market volatility, especially for the Australian Dollar. As a result, USD/CNH will also hold significant prominence in getting a response to Katherine Tai’s announcement.

AUD/USD Forecast

AUD/USD posted a relatively Bullish Engulfing candlestick last week after prices surged above their September low (0.7166.) Currently, the currency faces a potential resistance point at the falling 26-day EMA (Exponential Moving Average.) Bears will wait for the September low if the price starts falling. Contrarily, the MACD points higher after crossing the signal line recently. It indicates a healthy growth outlook on the 8-hour window. 

As the week packs several crucial decisions, traders must keep up with every announcement to secure their portfolios.



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