AUD/USD rises on weaker USD as Australian consumer confidence approaches

Australian Dollar, AUD/USD, US Dollar, Silver, Technical Outlook – Topics to Talk about

• Asia Pacific markets are set for higher opening on broad US dollar softness
• Australian consumer confidence set to cross wires in APAC trade
• AUD/USD is rising towards resistance as momentum oscillators are pointing to more upside

Asia Pacific Outlook Tuesday

Asia Pacific markets appear poised to extend Monday’s gains after a risky trading session on Wall Street. The benchmark S&P 500 ended 1.06% higher, led by gains in the energy, information technology and consumer discretionary sectors. The US dollar fell against most of its major peers as traders brace for a soft US CPI report due Tuesday. While market bets continue to point to a 75 basis point hike in the FOMC later this month, a fall in the CPI would likely weigh on future sessions.

The price of gold rose against the greenback. Silver prices rose. According to the CFTC’s Friday Commitments of Traders (COT) report for the week ended September 6, non-commercial short silver positioning rose to its highest level since July 2019. The increased number of short positions likely increased Contributed to today’s move higher as some traders believe bought to cover. XAG/USD is up over 5% while Gold is up 0.5%. The gold/silver ratio — a measure of how much silver it takes to buy one ounce of gold bullion — fell near a multi-month low.

Soybean prices rose in Chicago after the USDA’s World Agricultural Supply and Demand Estimates (WASDE) report was released. Soybean production is expected to fall by 152 million bushels. Corn prices rose while wheat fell. Random timber futures rose nearly 10% as a possible US railroad strike threatens food and energy supplies. Negotiations between unions and railway companies will continue until Friday. The White House is reportedly involved.

Japan’s Business Survey Index (BSI) Large Manufacturing for the third quarter is due this morning. The island nation’s August producer price index (PPI) is expected to rise 0.4% mom. The Westpac Melbourne Institute’s September consumer sentiment survey is a potentially market-moving event today. Last month the consumer sentiment index fell to 81.2 as inflation and RBA rate hikes weighed on confidence. Since then, the RBA has hiked rates again. AUD/USD hit a fresh September high during New York trade.

AUD/USD Technical Outlook

AUD/USD is trading just below its 50-day simple moving average (SMA) after breaching the 61.8% Fibonacci retracement. A break above this SMA would challenge the pseudo-50% Fib level before threatening the falling 100-day SMA, which is currently trading alongside the 38.2% Fib. The daily Relative Strength Index (RSI) crossed above its midpoint as the MACD moved above its signal line, both bullish momentum signals.

AUD/USD daily chart

Chart created with trading view

— Written by Thomas Westwater, Analyst for DailyFX.com

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