Australian Dollar Traders Higher Alongside Dow Jones Before Powell Speech

(MENAFN– DailyFX)
Australian Dollar, AUD/USD, China, Iron Ore, Technical Outlook – TALKING POINTS

  • Australian Dollar climbs with US stocks as traders shift back into risk assets
  • US-listed Chinese stocks rocketed after US and Chinese regulators near deal
  • AUD/USD takes aim at the 100-day SMA after prices clear technical barriers

Friday’s Asia-Pacific Outlook

Asia-Pacific markets look ready to open higher today after US stocks rose. The high-beta Nasdaq -100 Index (NDX) climbed 1.75%, and the Dow Jones Industrial Average rose 0.98%. Chinese stocks listed on US exchanges, American depository receipts, surged after the Wall Street Journal reported that US and Chinese regulators were close to making a deal that would potentially resolve accounting and regulatory issues that threatened to see the stocks delisted.

The Nasdaq Golden Dragon China Index rocketed 6% higher in New York. Alibaba, the Chinese e-commerce giant, helped carry those gains, adding nearly 8%. The agreement, reported by WSJ, would permit auditors from the US Public Company Accounting Oversight Board (PCAOB) to inspect financial statements in Hong Kong.

The move signals how valuable the US investing pool is worth to Chinese companies and Beijing, especially when expansive monetary policy may dissuade foreign investment. China’s Li Zhong—Vice Minister of the Ministry of Human Resources and Social Security—said, on Thursday, that the government will focus on supportive economic policies, including fiscal, monetary, and industrial sector, in a bid to support China’s labor market. The offshore Yuan rose around 0.3% versus the Greenback.

Risk-sensitive APAC currencies, including AUD and NZD , moved higher overnight. AUD/USD outpaced its major pairs as AUD-friendly iron ore prices. New Zealand’s ANZ published an August update on consumer confidence, with the gauge rising to 85.4 from 81.9 in the prior month. Markets will see Tokyo CPI cross the wires this morning, followed by Thailand’s July trade balance data. However, traders are keenly focused on the upcoming US PCE data and Fed Chair Powell’s Jackson Hole speech.

AUD/USD Technical Outlook

AUD/USD looks primed to move higher on a technical basis. After piercing through the 38.2% Fibonacci and the 50-day Simple Moving Average, bulls are up against the falling 100-day SMA and the 23.6% Fib. The Relative Strength Index and MACD oscillators are tracking higher, signaling a potential tailwind for prices.

AUD/USD Daily Chart

Chart created with TradingView

— Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwater on Twitter

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