The AUD/USD Forex Pair Is Watching Australian Retail Sales, And China PMI Data For Direction As Iron Ore Prices Are A Headwind

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Technical Outlook for Australian Dollar, AUD/USD, Retail Sales, China PMI and Iron Ore. The Australian Dollar may target the 50-day SMA against its US counterpart if Fibonacci support holds, with Asia-Pacific stocks looking to rise on Monday as yields fall. 

Meanwhile, China’s official manufacturing PMI figures for October could decide the market mood going into the week.

Asia-Pacific Outlook for Monday

Stocks in the Asia-Pacific region, excluding China, surged last week as bond investors returned to the market and drove yields lower. Japan’s Nikkei 225 index rose by 0.8%, and 

South Korea’s KOSPI Index gained 2.5%.

As iron ore prices in Singapore dropped below $80 for the first time since early 2020, worry set in about Australia’s large mining sector. A sudden decrease in demand is to blame for the plummeting prices, as higher rates and China’s declining property sector result in less need for metal. Consequently, this doesn’t look good forecast-wise for Australia’s Dollar, given how heavily its mining industry relies on the Chinese market.

On September 30th at 00:30 UTC, Australia will release its retail sales figure for the month prior. The Bloomberg consensus sees a 0.6% increase from August’s numbers. The Reserve Bank of Australia will announce its policy decision on Tuesday, with this data point being the last one before then.

Futures markets are assuming a 100% probability of a 25-basis point interest rate hike and very little likelihood of a more significant move. According to the CFTC’s Commitment of Traders report from Friday, speculators have upped their bets against the Australian Dollar by 15.2k contracts.

Technical Outlook for the Australian Dollar

On Wednesday, the Australian Dollar went above the 23.6% Fibonacci retracement after unsuccessfully trying to do so on Monday and Tuesday. If prices hold above the Fib level, we will focus on the 50-day Simple Moving Average (SMA) and the 38.2% Fib retracement.

The MACD is pointing to positive momentum, but AUD/USD could still see further losses as part of the broader downtrend.

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