AUD/USD heading to January lows

The dominant theme in the FX space remains USD-centric as the greenback extends its gains against most of the majors.

Source: Bloomberg

AUD/USD slipped to $0.8748 and still has January lows of $0.8660 in sight. While most of the activity is likely to be on the USD side this week, AUD moves will be pinned on commodities and China. China released industrial profits on Saturday and it was a shocking number, down 0.6% for August when the previous reading was +13.5%. China’s official PMI reading is due out on Wednesday and, after the HSBC reading showed some improvement, this will perhaps be a positive as well.

However, there will be plenty of scepticism and, with protests kicking off in Hong Kong, risk is likely to be on the back foot in Asia. I continue to favour selling the AUD into strength, with initial targets to January lows. Any rallies back to $0.8800 are likely to be used as an opportunity to sell. On the local calendar this week we have retail sales, building approvals and trade balance data as the key readings.

Click to enlarge

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.