Today’s Key Market Drivers – 6th November 2017


Aussie Dollar is looking weaker.

The Aussie Dollar is continuing to look weak against the US Dollar closing an engulfing bearish candle to the downside on Friday with price pushing straight back off the 200 EMA on the daily chart. What is worth nothing about Friday’s closing price is that price closed below the opening prices of each day last week and the lows of last week are now key support levels. If those support levels are broken early this week the AUD v USD has the technical likelihood of going lower. The RBA will release its latest monthly statement tomorrow on Melbourne Cup Day and it is widely tipped they will leave the cash rate on hold at 1.5% which will mark the 14th straight month they have left interest rates on hold. I doubt they will have any “new” news that will change the momentum on the AUD and whilst we will see some volatility I believe the longer-term trend is lower.

The RBA would enjoy a lower AUD and I think they will confirm to the market that the official interest rate will remain on hold for the foreseeable future. Any new lows will attract more sellers and any short sharp rallies back higher will be an opportunity to establish short positions. Should the stock market decide to pull back this will only see the AUD v USD fall faster as the AUD is sold in times of uncertainty. From a fundamental perspective, the US has a lot more going for it right now and interest rates will rise faster in the US than they will down under. It would take a significant shift in the USA’s economic fortunes to derail what is a well-established fundamental trend and I just can’t see the Australian economy turning the corner anytime soon and giving investment banks a reason to diversify holdings into AUD. I’m a seller of the AUD. I will talk about the Kiwi Dollar tomorrow but until then I will just add “ditto for the Kiwi”.

The US Dollar continued on its winning way on Friday after better than expected services sector data hit a 12-year high and factory orders overshadowed a less than impressive October jobs figure. The Canadian Dollar jumped on Friday after a better than expected jobs number for October.

 

About the Author: Andrew Barnett

Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).

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