Australian dollar continues to rise while the US dollar falls.
Tuesday’s trading goal for the Australian Dollar (AUD) is to remain positive. And build on its gains from the previous day. The US Dollar (USD) correction. Which may be related to the negative US Treasury yields. Provides upward support for the AUDUSD pair.
Australia’s PMI for Manufacturing declined to 48.0, while the PMI for Services fell to 47.6.
The manufacturing and services sectors may have contracted. As indicated by the preliminary October S&P Global Manufacturing and Services PMI for Australia. Which decreased. Markets anticipate the Reserve Bank of Australia (RBA) will continue to tighten guidelines. According to RBA Governor Michele Bullock, the RBA is prepared to implement appropriate policy measures should inflation continue to exceed forecast levels.
China may consent to the issuance of additional sovereign debt worth over 1 trillion yuan.
According to a Reuters story citing three unidentified sources. China is allegedly planning to approve the issuance of slightly more than 1 trillion yuan in additional sovereign debt. The action is a component of the Chinese Communist Party’s initiatives to boost infrastructure investment. And promote economic expansion. On the last day of a meeting, the National People’s Congress (NPC) standing committee is anticipated to approve the additional debt issuance.
The US dollar is being affected by the decline in US Treasury yields.
It appears that the US Dollar Index (DXY) will continue its four-day losing streak, potentially due to negative US Treasury yields. Upon arriving at The 10-year Treasury yield reversed course at its highest point since 2007, which put some selling pressure on the US dollar (USD).
The markets do not believe that a rate hike in November is likely, according to the CME FedWatch Tool. The odds for January 2024 are still higher than 30%, though.
Australian Dollar Technical Analysis
The Australian dollar is trading near the 0.6350 major level, below the 14-day EMA.
Tuesday sees the Australian dollar trading near 0.6340, matching up with a critical resistance at the 14-day Exponential Moving Average (EMA) of 0.6349, which comes after a significant level at 0.6400.
A break above this resistance could take the price up to approximately 0.6429, the 23.6% Fibonacci retracement level. The significant support on the downside appears at the 0.6300 level, which is followed by the 0.6285 monthly low.
