AUD/USD Targets 200-Day SMA as Copper and Coal Costs Surge Amid USD Pullback

ZACKAugust 11, 2022

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Australian Greenback, AUD/USD, Vitality, Copper, Iron Ore, Financial Outlook – TALKING POINTS

APAC markets might even see a cautious buying and selling session after US shares fell in a single day
An increase in copper, iron ore and coal costs is supporting Australian Greenback energy
AUD/USD is nearing its high-profile 200-day SMA after rising practically 3% this week

Friday’s Asia-Pacific Outlook

US shares closed blended in New York as post-CPI exuberance light regardless of further indicators that value pressures are easing. The high-beta Nasdaq-100 Index (NDX) closed 0.65% decrease. The benchmark S&P 500, helped by the power sector, managed to tread water, slipping solely 0.07% on the shut. The S&P 500’s power GICS sector rose 3.19% as crude oil costs climbed, whereas well being care fell 0.71%. The US-listed Nasdaq Golden Dragon China Index supplied a constructive signal for Asian equities, rising 2.60%.

Brent crude and WTI crude oil costs rose nearly 3% in a single day after the Worldwide Vitality Company (IEA) elevated its demand outlook for this yr by 380k barrels per day (bpd). A rise in pure fuel and different power costs was cited by the Paris-based company. These greater costs might power some international locations to burn oil as a substitute of pure fuel to produce power, growing demand for the commodity.

That mentioned, pure fuel costs elevated throughout the European, Asian and US benchmarks. Europe’s power scenario has darkened as a result of near-critically low water ranges within the Rhine river—a significant waterway for the transport of coal and different industrial items in Germany. The dearth of coal mixed with low ranges of hydroelectric provide threatens Europe’s effort to stockpile pure fuel forward of the winter.

Coal costs on the Newcastle coal terminal in Australia climbed above $400 per metric ton (mt). Iron ore costs in China completed above $110, and copper costs gained 1.56% in New York. A pullback within the US Greenback allowed broader energy throughout the commodities sector. The commodity-sensitive Australian Greenback moved greater in opposition to most of its friends regardless of a rise in China’s native Covid instances.

The New Zealand Greenback climbed over 0.5% greater in opposition to the Dollar. The island nation’s Efficiency of Manufacturing Index rose to 52.7 in July from an upwardly revised 50.0 in June, in line with BusinessNZ. The Efficiency of Companies Index (PSI) and second-quarter Producer value index enter/output knowledge are the final knowledge factors due out earlier than the RBNZ’s August 17 price announcement. The swap market is favoring a 50-basis-point OCR hike.

Notable Occasions for August 12:

Japan – International Bond Funding (06/August)

Philippines – Retail Worth Index YoY (April)

Japan – 3-Month Invoice Public sale

India – Passenger Automobiles Gross sales MoM (July)

Hong Kong – GDP Development Fee Remaining (Q2)

AUD/USD Technical Outlook

After yesterday’s failed intraday try, AUD/USD pierced above the 100-day Easy Transferring Common (SMA), with costs now dealing with the high-profile 200-day SMA. If bulls clear that SMA, the June excessive would shift into focus as the following goal at 0.7283. Alternatively, a drop again under the 100-day SMA might drag costs all the way down to the prior wedge goal at 0.7037.