Still Risk Of Broader Downtrend

USD fell on the back of weaker-than-expected Michigan consumer confidence, which meant the AUD closed higher at 0.6721. It has started the week stable at 0.6718. On Friday, it was the third best performing G10 currency behind the JPY and NZD.

• The bearish technical trend continues for the AUD and the focus is on 0.6682 (Jul 14 low), which was broken on Friday, but not decisively. If that were to happen, then the broader downtrend should resume. On the upside, the first resistance level is 0.6824 (20-day EMA).
• Equities were down sharply across the board but the US less so after weaker consumer sentiment. VIX finished unchanged at 26.3% but comfortably off intra-session highs.
• WTI oil ended Friday flat but Brent rose 0.6%. Metals were generally higher with the LME index rising 0.3%, as the market balanced economic risks with supply issues. Copper and nickel were higher on better Chinese economic data but aluminium fell after China announced record production. Iron ore traded under $100 and ended the week around $98 on the back of higher steel inventories.
• A quiet week in Australia with no data today but the RBA September minutes are published tomorrow. RBA’s Kearns speaks today on “Interest Rates and the Property Market” followed by Deputy Governor Bullock on Wednesday. Preliminary September PMIs are due on Friday.