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AUD/USD Buoyed by Rising Iron Ore Prices as Traders Eye Westpac Consumer Confidence

ByThomas Westwater

Aug 8, 2022
AUD/USD Buoyed by Rising Iron Ore Prices as Traders Eye Westpac Consumer Confidence


Australian Dollar, AUD/USD, Westpac Consumer Confidence, Technical Outlook – TALKING POINTS

  • Asia-Pacific markets face rocky start after a mixed session on Wall Street
  • Australia’s Westpac consumer confidence eyed as potential risk to AUD
  • AUD/USD retakes 50-day SMA after overnight gain, but momentum looks fragile

Tuesday’s Asia-Pacific Outlook

The Australian Dollar is searching for direction in Asia-Pacific trading after rising more than 1% overnight. Stocks closed mixed on Wall Street. The tech-heavy Nasdaq-100 Index (NDX) fell, and the small-cap Russell 2000 rose. Rising oil prices helped support energy stocks, with WTI crude oil and Brent oil prices rising more than 2%.

Copper and iron ore prices are higher, aiding the commodity-sensitive Aussie Dollar. China’s trade balance data showed a renewed appetite for many commodities in July. Goldman Sachs cut its Brent crude oil price forecast for the third quarter from $110 to $140. Energy traders are watching for monthly reports from OPEC and the International Energy Agency this week, along with inventory data from the API and EIA.

OZ Minerals rejected an unsolicited offer from BHP Group worth A$8.34 billion. The CEO of OZ Minerals appeared unimpressed with the offer, but it is unknown if BHP will adjust its bid. Overall, however, it’s a positive sign for the copper industry. The recent drop in prices does favor the position of larger companies that are likely better capitalized.

New Zealand’s electronic retail card spending fell 0.2% from the prior month in July. NZD/USD climbed above its 50-day Simple Moving Average during New York hours. A move higher in iron ore prices helped support AUD, but prices face a potentially volatile session today, with Westpac consumer confidence due shortly. The gauge has fallen since January, and the RBA’s recent rate hike may have dragged sentiment further.

Notable Events for August 09:

Philippines – Balance of Trade (June)

Australia – NAB Business Confidence

Philippines – GDP Growth Rate QoQ (Q2)

Thailand – Consumer Confidence (July)

Japan – 30-Year JGB Auction

Indonesia – Retail Sales YoY (June)

AUD/USD Technical Outlook

AUD/USD is trading back above its 50-day Simple Moving Average (SMA) after rising from its 20-day SMA. A break above the 0.7036 level may clear a path for more gains. However, RSI and MACD, while positive, have started to moderate. A pullback would aim for support around the 20- and 50-day SMAs.

AUD/USD Daily Chart

Chart created with TradingView

— Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwater on Twitter


Image and article originally from www.dailyfx.com. Read the original article here.