Australia isn’t printing a lot of closely watched reports, which means traders could look at this week’s releases with an eye towards next week’s RBA decision.
So, which catalysts can influence the Aussie’s price action this week?
Here’s a short list:
Quarterly CPI (Oct 28, 12:30 am GMT)
- Consumer prices dropped by 1.9% in Q2 2020 (from a 0.3% growth in Q1) as the lockdowns affected consumer activity
- Annual prices showed a drop from 2.2% to -0.3%
- AUD initially dropped to its intraday lows before it traded higher as traders favored risky assets ahead of the FOMC statement
- Analysts see a 1.4% price growth in Q3 2020, with annual prices ticking up by 0.6%
Other quarterly releases
- Quarterly PPI (Oct 30, 12:30 am GMT) could see a 0.7% uptick after dipping by 1.2% in Q2 2020
- Annualized PPI could recover from -0.4% to -0.1%
- NAB’s quarterly business confidence (Oct 29, 12:30 am GMT) last clocked in at -15 and marked the fourth quarter in negative territory
Communist Party of China’s once-every-five-years huddle
Market risk appetite
- The Reserve Bank of Australia (RBA) is printing its policy statement next week and markets see a rate cut in November. This week’s releases will likely weaken or strengthen the analysts’ speculations
- China’s PMIs (Oct 31, 1:00 am GMT) are expected to show a slight dip in manufacturing (from 55.9 to 55.2) and an improvement in the services sector (from 51.5 to 51.8)
- Coronavirus updates (number of cases, stimulus, lockdown, vaccine) will continue to affect the intraweek trends of high-yielding currencies
- Monetary policy announcements by the Bank of Canada (BOC), Bank of Japan (BOJ), and the European Central Bank (ECB) could provide countercurrency volatility
- Headlines over Brexit and U.S. stimulus negotiations, as well as the U.S. Presidential elections, will also affect risk trading
Technical snapshot
- AUD/JPY and AUD/NZD have reached Stochastic’s “oversold” region on the daily time frames
- AUD/USD remains neutral but it looks like the Aussie is headed for oversold status against the European currencies and the Loonie
- Daily EMAs reflect the Aussie’s short and long-term bearish trends against the euro, franc, and Kiwi on the daily time frame
- AUD/USD, AUD/GBP, AUD/CAD, and AUD/JPY remain above the 200 EMA and are seeing short-term bullish pressure
- The Aussie was most volatile against the dollar and the European currencies in the last seven days
This post first appeared on babypips.com
