AETOS Market Commentary
AUD/USD is staying relatively resilient, but we will see most of the selling in AUD/JPY. Weakening global growth will translate to lower commodity demand and add pressure to the Aussie as well.
On Friday, the dollar fell against the safe-haven Japanese yen as dull U.S. manufacturing data fueled worries about the wider economy, and Treasury bond yields signaled growing fears of a recession.
Speculators have raised their net long bets on the U.S. dollar to a new 2019 high (Week ending March 19) in the latest week, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday.
AUD/USD Daily Chart
The pair closed below support at 0.7091 where the 10 & 21-day MAs converge.
Next support at March 20 low at 0.7057, where a break of this support will target 0.7000/05. With minimal economic data being released in the Asian session, the key will be AUD/JPY flows and moves in Asian equity markets.
Policymakers had cut growth forecasts for the euro zone economy earlier this month and launched a new round of cheap loans to banks (Reuters).
Consequently, this put major pressure on the EUR which fell 116 points from its high on Friday and may add further downside to EUR/USD. To compound the situation, weak factory data out of Germany on Friday confirms that Europe's powerhouse is also slowing and risk off is becoming more apparent.
EUR/USD Daily Chart
The Charts are offering little at the moment, with current levels below 21 & 55-DMAs while the RSI is fairly flat.
The pair is going back into the range as seen in the Daily Chart, Deal/No Deal Brexit news should be released this week and we will keep monitoring trade talks which is appearing to take a turn for the negative as the upbeat momentum is fading.
The information above is of general nature only and does not take into consideration your objectives, financial situation or investment needs. The products and services provided are issued by AETOS Capital Group Pty. Ltd. (AFSL: 313016, ACN: 125113117). Trading Forex margin and CFDs carries a high level of risk, and losses can exceed your deposits. You are strongly recommended to seek independent financial advice before you make an investment decision. Please refer to our Product Disclosure Statement which you can obtain from our website for more details. AETOS has the ownership of the contents of this FX commentary. Copying, reprinting or publishing to a third party is not permitted.