Am selling AUDUSD now - Both statisticals and Fundamentals model
A slightly bearish bias for AUDUSD this week (starting 17/09/2024) seems reasonable based on several key fundamental factors:
1. US Dollar Strength
- Federal Reserve Outlook:
The Fed has maintained a hawkish stance in recent meetings, and expectations of sustained higher interest rates in the U.S. provide support for the dollar. Any signal of ongoing hawkishness from the FOMC meeting this week could further boost the USD.
- US Economic Data:
Recent data, such as inflation (CPI) and labor market resilience, has been solid, reinforcing the market's expectation that the Fed will remain firm on rates.
2. Australian Economic Data
- Weakening Domestic Growth:
Australia's economic growth has been modest, with concerns over weaker consumer sentiment and housing market vulnerability. A cooling property market and subdued wage growth contribute to a less optimistic outlook.
- China's Slowdown:
As Australia’s largest trading partner, China’s continued economic struggles (especially in property and industrial production) weigh heavily on the Australian Dollar. Recent weak data from China, particularly around real estate and credit growth, has dampened sentiment.
3. Commodities Influence
- Iron Ore Prices:
As iron ore is one of Australia’s top exports, any decline in its price (due to China's economic slowdown) could exert downward pressure on the AUD.
- Gold Prices (XAUUSD):
If gold prices remain under pressure from rising U.S. yields, this could also indirectly weigh on AUD, as Australia is a major gold producer.
4. Risk Sentiment
- Risk-Off Environment:
Market sentiment globally seems risk-averse, with concerns about global growth, high inflation, and geopolitical risks. The AUD, being a risk-sensitive currency, typically underperforms in such environments.
Conclusion:
A combination of U.S. dollar strength, weaker Australian economic prospects, China’s slowdown, and potential commodity weakness suggest that **AUDUSD** could be in a slightly bearish trend this week. Keep an eye on key U.S. data releases and Chinese economic indicators, as they will play a critical role in the pair’s direction.
1. US Dollar Strength
- Federal Reserve Outlook:
The Fed has maintained a hawkish stance in recent meetings, and expectations of sustained higher interest rates in the U.S. provide support for the dollar. Any signal of ongoing hawkishness from the FOMC meeting this week could further boost the USD.
- US Economic Data:
Recent data, such as inflation (CPI) and labor market resilience, has been solid, reinforcing the market's expectation that the Fed will remain firm on rates.
2. Australian Economic Data
- Weakening Domestic Growth:
Australia's economic growth has been modest, with concerns over weaker consumer sentiment and housing market vulnerability. A cooling property market and subdued wage growth contribute to a less optimistic outlook.
- China's Slowdown:
As Australia’s largest trading partner, China’s continued economic struggles (especially in property and industrial production) weigh heavily on the Australian Dollar. Recent weak data from China, particularly around real estate and credit growth, has dampened sentiment.
3. Commodities Influence
- Iron Ore Prices:
As iron ore is one of Australia’s top exports, any decline in its price (due to China's economic slowdown) could exert downward pressure on the AUD.
- Gold Prices (XAUUSD):
If gold prices remain under pressure from rising U.S. yields, this could also indirectly weigh on AUD, as Australia is a major gold producer.
4. Risk Sentiment
- Risk-Off Environment:
Market sentiment globally seems risk-averse, with concerns about global growth, high inflation, and geopolitical risks. The AUD, being a risk-sensitive currency, typically underperforms in such environments.
Conclusion:
A combination of U.S. dollar strength, weaker Australian economic prospects, China’s slowdown, and potential commodity weakness suggest that **AUDUSD** could be in a slightly bearish trend this week. Keep an eye on key U.S. data releases and Chinese economic indicators, as they will play a critical role in the pair’s direction.
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