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Thomson Reuters
Jan 02 - 02:36 PM
AUD/USD - COMMENT-AUD/USD Bears Find Patience Pays As China Fears Mount
First appeared on eFXplus on Jan 02 - 11:50 AM

AUD/USD bears waited patiently into 2018's year-end and are now reaping the benefits.
The late-December consolidation phase ended after AUD/USD broke below 0.7000 option barriers and then set a new trend low.
China's downside surprise to Caixin manufacturing PMI highlighted concerns that global economic growth is quickly decelerating.
Government bond yields for many major economies are falling sharply on growth concerns.
Australian 10-year yields (AU10YT=RR) broke below 2017's low of 2.33 percent and now threaten the November 2016 low of 2.24 percent.
That sharp decline has increased the greenback's yield advantage over aussie as AU-U.S.
10-year spreads widen.
The growth concerns and wider spreads are working in conjunction with the bid for Japan's yen to weigh on AUD/USD.
AUD/JPY broke key 76.65/75 support where the 76.4 percent Fib of the 2016-17 rally and November 2016 low sit.
Technicals suggest further loses are possible.
The 10-DMA has capped any recent rallies and RSIs are falling.
AUD/USD bears now threaten the February 2016 low.
A break there targets the 0.6827 low for 2016.
U.S. December jobs due Friday could spoil bearish views on a downside surprise.

chart: Click here

Thomson Reuters IFR Markets


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