AUD/USD: shallow recovery limited?

By FXStreet FXStreet (Guatemala) – There has been a market for the bid in AUD/USD, despite the longer term implications of inflationary pressures dragging below the RBA’s target as shown in yesterday’s TD Securities mean trim for Nov Y/Y.

Instead, markets rather pay attention to the headline 0.1% m/m vs prior 0.0% m/m as the RBA tracks performance on a m/m basis while investors are gauging each and every development on a shorter term basis as we head into the closing weeks of the year. However, while a series of data of late has been stacking up on the less bullish side vs the RBA’s more positive outlook coupled with the possibility of a Fed hike, the downside remains compelling and recoveries may remain shallow.

Nonfarm Payrolls / OPEC key events

Besides the RBA meeting, expected to stay on hold, the Nonfarm Payrolls is the key data for this week and will likely underpin a strong dollar is indeed the numbers remain positive. It will also be a big week in commodities with the OPEC meeting coming up where risk could lead to a stabilization of prices, supporting the outlook of firmer commodity currencies.

AUD/USD levels

Technically, 0.7170 is a key target …read more

Source:: FX Street