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Money markets expect a 40% chance of the European Central Bank cutting interest rates before December, compared to only a 30% chance before the release of US CPI data.The China Earthquake Networks Center officially reported that a magnitude 3.2 earthquake occurred at 22:24 on February 13 in Shaya County, Aksu Prefecture, Xinjiang (40.53 degrees north latitude, 83.42 degrees east longitude), with a focal depth of 16 kilometers.February 13th - Phil Orlando, Chief Equity Strategist at Federated Investors, stated that the better-than-expected US January inflation report, especially at the nominal level, is good news for the Fed and supports our long-term view that the Fed will be able to cut rates three times in about a year as leadership transitions from Powell to Warsh. Why did the market fall on Wednesday despite strong labor market data? Because the market perceived this as detrimental to the Feds path to lower rates—the January labor market data was far stronger than expected. With this mornings data showing better-than-expected inflation, we believe the downward trend in inflation will continue. Bonds and stocks at least knee-jerked higher, and the market expects this to provide a reasonable justification for the Fed to lower rates in the long term, which is good news.Kremlin spokesman Dmitry Peskov said: "Europe will not send representatives to the negotiations between the US, Russia, and Ukraine in Geneva."February 13th - Regan Capital analyst Skyler Weinand stated that weak US inflation data in January will not increase the likelihood of a Federal Reserve rate cut in the coming months, due to stronger-than-expected labor market data released earlier this week – 130,000 new jobs were added in January, and the unemployment rate was 4.3%. The Fed "simply cannot cut rates right now, given that the economy has just created six-figure jobs." Weinand expects the Senate to confirm Warsh as Fed Chair, succeeding Powell, but doubts his ability to build consensus on rate cuts. "We may not see any changes to the Feds policy rate this year." The CME FedWatch Tool shows that investors are currently pricing in at least two rate cuts this year.

AUD/USD However, 0.6700 is the key to the upside

Daniel Rogers

Apr 11, 2023 14:41

AUD:USD.png 

 

In the early hours of Tuesday morning in Asia, the AUD/USD receives bids near 0.6650 to recover recent losses. In doing so, the Aussie pair recovers from the lowest levels in two weeks while reversing course from the horizontal support that has been in place for 12 days around 0.6620.

 

Nonetheless, imminent bearish MACD signals and a stable RSI indicate that the AUD/USD pair will continue to decline.

 

The convergence of the 10-day moving average and the support-turned-resistance line from March 10, close to the round number 0.6700, may also threaten the most recent price recovery.

 

Even if the AUD/USD bulls are able to surpass 0.6700, the 50% Fibonacci retracement level of the pair's February-March decline, located around 0.6805, will serve as the final line of defense for the bears.

 

Alternately, a break below 0.6620 could initiate a new decline aiming for the Year-to-Date (YTD) low established in February around 0.6565.

 

Notably, the AUD/USD pair's decline beyond 0.6565 confronts multiple obstacles to the south, including the highs for October 2022 near 0.6545 and 0.6520.

 

After that, a decline to the November 2022 low of approximately 0.6275 cannot be ruled out.

 

Regardless of the recent corrective rally, the AUD/USD remains on the radar of skeptics.


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