Price action leaves traders in no man’s land. Moreover, outside of some OIL price influenced movements on the Commodity Bloc , “FX Land” has been restrained
Despite the stellar Westpac Consumer Confidence number yesterday , the Aussie then came under pressure testing .7350 levels after Moody’s investor services said that Australia’s four major banks face moderate weakening in asset quality and slowdown in earning
Overnight The Aussie bounced off yesterday’s APAC lows testing the .74 handle on the back of surging oil prices but has since come under renewed pressure as traders continue to sell the Aussie on Commodity Price inspired rallies. The surge in oil prices came after the Department of Energy inventories showed a large draw of 3.41 million barrels which was in acute contrast to Tuesday API survey and left traders completely wrong-footed on sentiment.
Adding to the AUDUSD downward momentum , consumer inflation expectations came in lower printing 3.2% versus 3.6 % prior
Short-term FX noise aside, the Aussie is in consolidation mode after finding a solid wall of resistance at .7300 level with trader’s very comfortable keeping positions light and powder dry ahead of Friday’s US Retail sales. Investors are expecting 0.8% on the headline
Overnight risk sentiment was still leaning negative as US equity markets sold off aggressively in the final hour of New York trade. However, traders will be eyeing regional bourses today and given the technical juncture we are at on the G3 currencies; Global equity markets need to be watched the remainder of the week given the current risk environments high correlation with the Aussie dollar.