Reserve Financial institution of Australia (RBA)’s “dovish hike” despatched AUD/USD to new intraweek lows earlier as we speak.

Are we wanting at the beginning of an intraweek downtrend?

Earlier than transferring on, ICYMI, yesterday’s watchlist checked out CHF/JPY for a countertrend commerce alternative after Switzerland launched its CPI knowledge. You should definitely try if it’s nonetheless a sound play!

And now for the headlines that rocked the markets within the final buying and selling periods:

Contemporary Market Headlines & Financial Information:

Canada’s IVEY PMI slowed down from 8-month excessive of 60.1 to 51.6 because the tempo of job creation eased in February.

Decrease civilian plane bookings helped drag U.S. manufacturing unit orders to a 1.6% dip in January after a downwardly revised 1.7% improve in December.

Japan’s actual wages dropped by 4.1% y/y in January, marking the tenth consecutive month-to-month decline and the quickest lower since Might 2014.

BRC: Valentine’s Day spending helped increase UK retail spending by 4.9% y/y in February however the drop in quantity of products bought means customers are getting much less for his or her cash.

Australia’s retail gross sales rebound by 1.9% m/m in January after 4.0% decline in February as inflation and return of large-scale sporting and cultural occasions boosted catering providers.

Australia posted a 11.69B AUD commerce surplus in January, the smallest surplus since August, as exports (+1.4%) rose lower than imports (4.6%)

RBA raised its charges by an anticipated 25bps to three.6%, with the assertion hinting of another charge hike earlier than turning data-dependent.

China’s commerce surplus beat $81.8B expectations at $116.9B within the January-February interval however a more in-depth look confirmed exports (-6.8% y/y) and imports (-10.2% y/y) contracting deeper than market estimated.

Asian shares slip on weak China commerce knowledge, focus shifts to Powell

In a two-hour presser, China’s new International Minister Qin Gang talked of an “invisible hand” escalating the struggle in Ukraine and warned of “catastrophic penalties” if the U.S. doesn’t “hit the brakes” on present relations methods.

Switzerland’s jobless charge dipped from 2.2% to 2.1% in February.

Germany’s manufacturing unit orders up by one other 1.0% m/m in January, increased than the estimated 0.9% lower, however annualized figures present 10.9% decline from January 2022.

Halifax: UK residence costs unexpectedly jumped from 0.2% to 1.1% m/m in February because of reductions in mortgage charges and improved client confidence.

Value Motion Information

Overlay of AUD Pairs: 15-min

Expectations of an RBA charge hike despatched the most important AUD pairs to their U.S. session highs in the course of the early Asian session.

The RBA did elevate its charges by 25 foundation factors as anticipated, however the central financial institution additionally modified its tone from February’s “additional will increase in rates of interest will probably be wanted” to “additional tightening of financial coverage will probably be wanted.” Markets took the change in tone to imply that RBA might flip data-dependent after one other charge hike in April.

AUD dropped throughout the board on the dovish hike and even noticed renewed bearish stress at the beginning of the European session as merchants additionally priced in China’s disappointing commerce numbers and uncertainty forward of Powell’s testimony.

Fed Chairman Powell to testify in DC at 3:00 pm GMT
SNB Chairman Jordan to speak financial coverage at 6:00 pm GMT
RBA Gov. Lowe to offer a speech at 9:55 pm GMT
Japan’s financial institution lending at 11:50 pm GMT

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Technical Chart of the Day: AUD/USD

AUD/USD 15-min Foreign exchange Chart by TradingView

RBA’s dovish charge hike and surprisingly weak exports and imports in China did NOT assist AUD/USD’s costs as we speak.

The pair not solely broke beneath a descending channel, however it additionally dropped beneath the .6700 psychological degree AND hit lows not seen since December.

Can AUD bears prolong AUD/USD’s intraday losses?

AUD/USD has already hit the usual Pivot Level‘s S2 help and has fallen by 60 pips out of its common day by day ATR of 80ish pips.

Powell’s testimony in DC may make or break AUD/USD’s intraweek downtrend.

Revenue-taking and a little bit of risk-taking would possibly increase AUD/USD again to the .6710 – .6720 earlier help zone. If threat aversion dominates as we speak’s market themes, then AUD/USD may make new weekly lows and dip to the .6650 minor psychological degree.

But when we see risk-taking or anti-USD sentiment within the subsequent buying and selling periods, then as we speak’s “breakout” might flip right into a fakeout and increase AUD/USD again as much as the .6720 – .6740 earlier areas of curiosity.