Yesterday’s trade saw AUD/USD within the range of 0.6937-0.7024. The pair closed at 0.6984, shedding 0.17% on a daily basis. It has been the 8th drop in the past 9 trading days.
At 10:43 GMT today AUD/USD was gaining 0.61% for the day to trade at 0.7028. The pair touched a daily high at 0.7049 during mid-Asian trading session and a daily low at 0.6975 during the early hours of the Asian session. Support may be received at the hourly 100-period EMA (0.7018), then – at the hourly 55-period EMA (0.7001) and finally – in the area around the current daily low (0.6975). Resistance, on the other hand, may be seen at the hourly 200-period EMA (0.7068) and then – at the high from January 8th (0.7076).
On Wednesday AUD/USD trading may be influenced by the following macroeconomic reports and other events as listed below.
Fundamentals
United States
Fed speakers
At 13:00 GMT the Federal Reserve Bank of Boston President, Eric Rosengren, is expected to take a statement, followed by a speech by the Fed President for Chicago, Charles Evans, scheduled at 17:30 GMT.
Monthly Budget Statement
The United States probably recorded a government budget deficit of USD 2.7 billion in December, according to market expectations, after a budget gap of USD 65.0 billion during the previous month. The latter represented a 14% increase compared to the figure posted in November a year ago, but yet, it has been the smallest deficit since August 2015.
In November total receipts were at USD 205 billion (a 7.3% year-on-year increase), while total outlays amounted to USD 270 billion (an 8.9% year-on-year surge), according to the report by the US Treasury.
The current fiscal year-to-date budget gap amounted to USD 201 billion, or a 13% increase compared to the same period a year earlier.
A larger-than-projected budget deficit in December would have a moderate bearish effect on the greenback. The Financial Management Service is to publish the official figure at 19:00 GMT.
”Beige Book” report
Also at 19:00 GMT, the Federal Reserve is to release its ”Beige Book” report, which is published eight times during the year. Each of the banks in the 12 Federal Reserve Districts gathers data in regard to current economic situation in the country on the basis of interviews with key business contacts, economists, market experts, and other sources. In case the Beige Book presents an optimistic economic outlook, this will usually support the US dollar, while a pessimistic view will have a bearish effect on the currency.
Bond Yield Spread
The yield on Australian 2-year government bonds went as high as 2.024% on January 12th, or the highest level since January 6th (2.026%), after which it closed at 2.012% to add 3.1 basis points (0.031 percentage point) compared to January 11th. It has been a second consecutive trading day of gains.
The yield on US 2-year government bonds climbed as high as 0.968% on January 12th, or the highest level since January 8th (1.016%), after which it closed at 0.936% to lose 0.004 percentage point compared to January 11th. It has been the 12th drop in the past 20 trading days.
The spread between 2-year Australian and 2-year US bond yields, which reflects the flow of funds in a short term, widened to 1.076% on January 12th from 1.041% on January 11th. The January 12th yield spread has been the largest one since January 8th.
Meanwhile, the yield on Australian 10-year government bonds soared as high as 2.812% on January 12th, or the highest level since January 5th (2.814%), after which it slid to 2.797% at the close to add 5.1 basis points (0.051 percentage point) compared to January 11th. It has been a second consecutive trading day of gains.
The yield on US 10-year government bonds climbed as high as 2.200% on January 12th, after which it slipped to 2.119% at the close to lose 5.6 basis points (0.056 percentage point) compared to January 11th. It has been the 13th drop in the past 20 trading days.
The spread between 10-year Australian and 10-year US bond yields widened to 0.678% on January 12th from 0.571% on January 11th. The January 12th yield difference has been the largest one since December 11th, when the spread was 0.727%.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for AUD/USD are presented as follows:
R1 – 0.6992
R2 – 0.7000
R3 (range resistance) – 0.7009
R4 (range breakout) – 0.7032
S1 – 0.6976
S2 – 0.6967
S3 (range support) – 0.6960
S4 (range breakout) – 0.6936
By using the traditional method of calculation, the weekly pivot levels for AUD/USD are presented as follows:
Central Pivot Point – 0.7068
R1 – 0.7187
R2 – 0.7421
R3 – 0.7540
S1 – 0.6834
S2 – 0.6715
S3 – 0.6481
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