Rallying On Improved Risk Appetite

The AUDUSD was the second best G10 performer Friday night, trailing only JPY, after the USD fell on more dovish Fed speak, talk of MoF intervention in the JPY and improved risk appetite. The AUDUSD is now trading around 0.6400, the highest since October 7, and also a break through firm resistance at the 20-day moving average.

• 0.6547 is the key resistance for the AUDUSD and the October 4 high. The break through 0.6363 is a bear trigger and the initial support level is 0.6170.
• The DXY reached a high of 113.94 on Friday before losing 2%. Equity markets rallied on softer Fed comments and the S&P500 rose 2.4%. VIX was down to 29.7%. European bourses were weaker, apart from the FTSE.
• WTI oil prices rose 0.6% to $85.05 and Brent 1.2% to $93.50 on persistent supply concerns. Base metals were mixed with copper higher but aluminium down on an increase in inventories. Iron ore is trading around $91.50, as Chinese property sector issues continue to weigh on the sector.
• This morning preliminary October Australian PMI data is published and Assistant Governor (Financial Markets) Kent is speaking on “Exchange Rates and Inflationary Pressures” at 9.05am AEDT. On Wednesday, the important CPI data for September and Q3 are released with the Q3 headline expected to reach 7%y/y and the trimmed mean 5.5%.