December 13, 2024 at 06:51AM
AUD/USD is down 0.2% on the day and poised for its lowest daily close since November last year now. The pair had seen quite a bit of back and forth action at times during the week. But as we look to wrap things up, sellers are the ones who are vying to come out on top. The August low of 0.6347 remains the key level to be aware of now as we approach the closing stages of the week.
It is a case of the aussie not being able to catch a break on any good news really. But the unfortunate part is that the good news aren’t all too convincing.
First, there was the China Politburo saying that they will adopt a more “moderately loose” monetary policy for next year. That gave a Monday boost to the aussie before the RBA stepped in with a more dovish note. The day after, we had a stronger than expected Australian labour market report. And yesterday, we had China stepping up to outline their economic ambitions for next year.
On the China front, it’s pretty straightforward. It is a case of plenty of high-level commentary and promises. But once again, it is lacking any convincing details that it will drive a turning point in the Chinese economy. The fact that Chinese equities are falling lower today underscores that sentiment, even if we might get the plunge protection team coming in at the closing stages or during next week.
As for the domestic front in Australia, there is skepticism towards the jobs data as seen here. And in any case, the RBA’s slight dovish shift is arguably the more important thing to take away for aussie traders this week surely.
The added fact that the dollar remains solid even with Fed rate cut odds for next week being reaffirmed is helping to keep the downside pressure in AUD/USD running.
And that brings us to yet another test of the August low of 0.6347 now. For sellers, they need a firm break on the daily/weekly chart to seal the deal and eye the October 2023 lows next.
This article was written by Justin Low at www.forexlive.com.
