Bearish technical trend continues

The AUDUSD had a volatile night but has begun the day higher at 0.675 (+0.6% above yesterday’s Lowe speech low). It didn’t test the first support level of 0.6699 but seemed to bounce off 0.672. The AUD was one of the worst performers in the G10 only outperforming the NZD and NOK.

• After weakening earlier, the AUDJPY strengthened again reaching 97.29. AUDNZD also rose reaching 1.1162 and is now trading around 1.1143. AUDEUR rose sharply to 0.6779 with the ECB’s 75bp hike announcement but has given some of that back and is now around 0.675.

• The Fed Chair Powell gave little new information in his remarks, which were similar to Jackson Hole, and so the DXY was stable after initially falling 0.5%. Chicago Fed President Charles Evans commented that rates should top out at 4% “before too long”. It seems that both markets and Fed voters are waiting for Tuesday’s US CPI report to determine the size of the next move.

• Equity markets were stronger across Europe and North America and the VIX fell further to 23.6%.

• Commodities were generally higher overnight. Oil prices rose despite reports of weaker fundamentals (WTI +1.95% and Brent +0.6%). Metals were mixed but growth leading copper was up 3.0% from its intraday low on tight supply. Iron ore has edged higher to stand around $100.

• There isn’t any noteworthy Australian domestic data or events today. Chinese CPI for August is the only significant regional data, and it is expected to rise closer to 3% target. See MNI's piece on this upcoming data.

https://marketnews.com/mni-china-cpi-to-rise-as-heatwave-takes-toll