Edit Content

18/11/2021 Thursday

Key Data Being Released Today 

  • CAD CPI oct: prev. 0.2%
  • USD FOMC Member Williams Speaks
  • NZD Inflation Expectation Q3: prev. 2.27%
  • FOMC Members Bowman, Waller, Daly, Evans & Bostic speak



The Aussie Dollar – Fundamentals

Yesterday the RBA continued its Dovish view. The RBA Board minutes and Governor Lowe’s speech confirmed this view sending Aussie Dollar lower after the announcement. The key takeaways from the both the meeting minutes and the speech are:

  • The RBA’s estimate of the neutral rate as being 2.5% or higher.
  • The RBA’s willingness to “look through” inflation of 3% or more if it is not accompanied by stronger wages growth.
  • The implications of a flat Phillips curve when the RBA does start to lift the cash rate; and
  • Lowe’s weaker wording around a rate hike in 2024 as “still plausible.”

It’s also important for us to keep an eye on the USD, as the DXY (USD INDEX) has been breaking key levels of resistance as it continues to rise. Yesterday’s high was 96.266, the highest level marked since mid-July 2020, which shows the USD is continuing to strengthen which is also putting pressure on the AUD.


The Aussie Dollar – Technical Analysis

This morning Credit Suisse stated “The Aussie is still potentially threatening a large topping pattern, with key medium-term supports starting at 0.7122/06 and stretching down to 0.6991, which includes the 38.2% retracement of the 2020/21 recovery and the ‘neckline’ to the 2020 base and “A break below 0.6991 would complete a major top to suggest a fall back to 0.6758, which is the 50% retracement of the 2020/21 upmove.”

Which gives technical evidence suggesting that the market could still fall significantly from here and that 0.7000 may not be the bottom.


Resistance on the Top Side – If the market rebounds above 0.7300 the 50-Day MA will be the next level of resistance. We also see resistance at 0.7415 and 0.7555 which holds significance as its close to the 200-Day MA at 0.75394.

Support on the Downside –   We will be watching closely to see if the market will consolidate its break of the 0.7300 support level today and head lower. If the market falls and can consolidate the break, we see support at 0.7172, 0.7100, and 0.7000.




AUD/USD Daily Chart


DXY (USD INDEX) Daily Chart



Major Global Markets

  • Stocks
    • S&P 500 closed at 4688
    • NASDAQ closed at 16326
    • ASX 200 closed at 7369
  • Currencies
    • AUD/USD – At the time of writing this report trades at 0.7264
    • AUD/JPY – At the time of writing this report trades at 82.938
    • AUD/CNH – At the time of writing this report trades at 4.6293
    • DXY (US Dollar Index) – At the time of writing this report trades 95.839
    • AUD/EUR – At the time of writing this report trades 0.6418
  • Bonds
    • US 10-year Bonds are currently at 1.585
  • Commodities
    • Iron Ore – Trading at USD/T 92.76
    • Gold – trading at USD/OZ 1866
    • Brent Crude Oil – Trading at USD/Bbl 80.18