- AUD/USD concentrates more on upbeat CBA Manufacturing PMI to keep the previous day’s gains triggered by Aussie jobs data.
- Risk negative headlines from China joins trade war fears.
- Qualitative catalysts, US Markit PMIs will offer a busy day ahead.
AUD/USD stays on the front-foot while taking rounds to 0.6845 amid the initial Asian session on Friday. The pair recently reacted to the preliminary readings of the Commonwealth Bank (CBA) PMI details for January. In doing so, Aussie buyers paid a little heed to news concerning the outbreak of China’s coronavirus.
The CBA’s January month PMIs flash mixed results as the headlines Manufacturing PMI crossed 49.0 forecasts to 49.1 whereas Services PMI lagged behind 49.5 expected to 48.9. With this, the Composite PMI lagged below 49.6 prior to 48.6. Even if all of the activity numbers released by the CBA remained in the contraction region, traders favored the Aussie buying especially after Thursday’s welcome prints of jobs report that cut odds of the Reserve Bank of Australia’s (RBA) rate cut.
On the other hand, the market’s risk tone has been weighed down by the headlines coming from China that renews fears of Severe Acute Respiratory Syndrome (SARS) virus that resulted in 774 deaths in 26 countries during the year 2002/03. Although the World Health Organization (WHO) still needs some time to consider coronavirus as an international threat, there have been 17 deaths so far due to the same. The recent update concerning the virus outbreak comes from Japan that confirms the second case of coronavirus.
Elsewhere, the US is ready to extend its trade war to the European Union (EU) and the UK. While the UK might step back due to the better relations between the US President Trump and British PM Boris Johnson, the EU might stand tall due to being the largest customer of the US.
That said, the US 10-year treasury yields extend their south-run to 1.73% by the end of Thursday’s trading whereas the S&P 500 Futures recover mildly to 3,326 by the press time.
Moving on, headlines concerning the global trade and China’s coronavirus will be the key to watch. Though, the importance of the preliminary Markit PMIs from the US can’t be ruled out.
Technical Analysis
A confluence of 200-day SMA and monthly trendline, near 0.6880 limits the pair’s short-term upside.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stabilizes near 1.0550 despite soft German inflation data
EUR/USD fluctuates in a narrow range near 1.0550 in the American session on Thursday. Soft inflation data from Germany makes it difficult for the Euro to gather strength, limiting the pair's upside, while US markets remain closed in observance of the Thanksgiving Day holiday.
GBP/USD trades below 1.2700 on modest USD recovery
GBP/USD struggles to gain traction and moves sideways below 1.2700 on Thursday. The US Dollar corrects higher following Wednesday's sharp decline, not allowing the pair to gain traction. The market action is likely to remain subdued in the American session.
Gold at risk of falling
Gold extends its shallow recovery from Tuesday’s lows as it trades in the $2,640s on Thursday. The yellow metal is seeing gains on the back of cementing market bets that the Fed will go ahead and cut US interest rates at its December meeting.
Fantom bulls eye yearly high as BTC rebounds
Fantom (FTM) continued its rally and rallied 8% until Thursday, trading above $1.09 after 43% gains in the previous week. Like FTM, most altcoins have continued the rally as Bitcoin (BTC) recovers from its recent pullback this week.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.