Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

AUD/USD faces downward pressure: global and domestic factors weigh as NAB business confidence survey looms

AUD/USD sees a third weekly decline, impacted by global pressures and weak employment data. The NAB Business Confidence survey takes center stage amidst ongoing risk sentiment and key economic events.

Source: Bloomberg

Last week saw a third consecutive weekly fall for the AUD/USD, as a combination of global and domestic events supported the US dollar and undercut support for the Australian dollar.

To recap, last week.

  • Employment in Australia fell by 65.1k jobs in December, well below the 15k gain expected. The unemployment rate remained unchanged at 3.9% due to a significant drop in the participation rate from 67.1% to 66.8%, which often occurs when those discouraged stop looking for work. Hours worked fell for a second consecutive month.
  • While China's GDP growth picked up to 5.2% y/y in Q4 2023 from 4.9% in Q3, the increase was largely due to base effects. Notably, sequential growth slowed to 1% q/q in Q4 from 1.5% in Q3 despite a host of easing measures by the government.
  • Fed Waller's speech was less dovish than expected. Waller expressed a keen interest in seeing more progress on the inflation front and preferred a slower pace of cuts than in previous cycles.

In a holiday-shortened week, the only local economic event of note will be the NAB Business Confidence survey released on Tuesday morning, previewed below, with the key drivers of the AUD/USD more likely to be risk sentiment, the outcome of central bank meetings in Japan and Europe as well as inflation data in the US.

NAB Business Confidence survey (Thursday, January 18th at 11.30 am AEST)

The NAB Business Confidence survey index dived to -9 in November, the lowest print outside the Covid period since 2012.

The market consensus is for a marginal rise to -7 in December. Within the sub-indices, employment and pricing intentions will be the focus, which were both on the firm side of things in November.

Australian business confidence chart

Source: TradingEconomics

AUD/USD technical analysis

From the October .6270 low to the December .6871 high, the AUD/USD gained just under 10% in two months. The rally appears to have unfolded in five waves (Elliott Wave), which suggests the pullback from the .6871 high is part of a correction rather than a reversal lower.

This view is supported by the AUD/USD last week holding and bouncing from the strong layer of horizontal support at .6520/00, noted in last week's update, which also includes the 61.8% Fibonacci retracement of the October to December rally at .6500c.

Therefore, leaning against support at .6520/00, a positive bias is in place, looking for a rebound initially towards resistance at .6700/25. Aware that if a sustained break of .6520/00 were to occur, it would warn that a deeper decline is unfolding towards 6400c.

AUD/USD daily chart

Source: TradingView
  • Source: TradingView. The figures stated are as of 22 January 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

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. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.