The AUD Holds Above 0.7500
Rowan Crosby • 2 min read
The bull run in the AUD/USD is continuing as price remains above the 0.7500 level with a number of key data points on the way.
The other major story in Australia today is the ban on Australian coal exports into China. The Chinese Government have been slowly adding to the list of commodities and products they will not accept from Australia which includes wine and barley amongst other things.
At this stage, everything they are putting tariffs on, are easily accessible from other countries so the stakes have been quite low. However, coal is a large export for Australia so this will be one to watch as we move forward. The tariffs have supposedly come in response to the Aussie PM calling for an enquiry into China as the course of COVID among other issues.
On the data front today we are going to be getting the latest RBA minutes, but if you recall there was very little that happened at the latest meeting with rate cuts already coming in the prior month. The board will not meet again until February 5, at which point we will have a better grasp on what the economy is looking like. Overall we have seen a sharp rebound and with lockdown measures and border closures all but over, the outlook is strong locally.
The final data point to note will be Chinese Industrial Production, which is expected to increase again for Nov up 7.0%.
Technically, the AUD/USD is bullish, as price holds above the 0.7500. What we are really witnessing is the decline in the USD and it is something I suspect might not be able to recover, given the political situation in the US. So for the time being we will watch the highs at 0.7580 and the recent lows of 0.7525 as areas to enter a long position.