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AUD/USD and NZD/USD Fundamental Daily Forecast – Low Volume, Low Volatility Expected Today

By:
James Hyerczyk
Published: Oct 22, 2018, 10:34 UTC

In the absence of any fresh economic news from the U.S. on Monday and the bank holiday in New Zealand, we’re not expecting much movement today. If there is volatility then it will likely be fueled by trader reaction to U.S. Treasury yields and demand for risky assets.

AUD/USD

The Australian and New Zealand Dollars are trading lower shortly before the U.S. opening. There are no major reports today and there’s a bank holiday in New Zealand so volume and volatility are below average. Earlier in the session, the currencies did receive some positive guidance when China’s stock markets surged more than 4.5%, but this news couldn’t sustain the rally.

At 1009 GMT, the AUD/USD is at .7102, down 0.0017 or -0.25% and the NZD/USD is at .6579, down 0.0011 or -0.17%.

Chinese stocks continued to rise sharply for a second session as authorities took steps to support the market after the release of weaker-than-expected GDP data on Friday.

Over the week-end, Chinese President Xi Jinping added more verbal support to the economy, saying in a letter to private entrepreneurs that the government would offer “unwavering support” for the country’s private sector, while the country’s exchanges committed to help manage share-pledge issues. Earlier on Monday morning, the People’s Bank of China advisor Ma Jun said he expects policy measures to support the market.

In other news, Reserve Bank of Australia Deputy Governor Debelle said he had an open mind on what constitutes full employment. His remarks come after data last week showed the unemployment rate falling to 5.0%, a 6-1/2 year low and a rate that many viewed as the full employment rate. Last week, Debelle had said that it is possible the country’s jobless rate would have to fall further than on previous occasions before wage growth would increase at a faster pace.

Forecast

In the absence of any fresh economic news from the U.S. on Monday and the bank holiday in New Zealand, we’re not expecting much movement today. If there is volatility then it will likely be fueled by trader reaction to U.S. Treasury yields and demand for risky assets.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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