02.12.2021: USD to regain ground; outlook for USD, USD/JPY, AUD/USD
Hi everyone! The new month has just started. So far, there have been no sharp movements in markets. The main currency pairs of the Asian session, as well as the US dollar index, are consolidating at yesterday's levels. However, we have some news to share with you. Let’s get cracking!
The US dollar index is trading sideways as we mentioned yesterday. Its quotes have dropped slightly below 96. The price is moving to 95.80 as part of the intraday correction. So, the dynamic of the US dollar index is rather mixed. Market participants are hesitant whether they should open long positions given the worsening epidemiological situation worldwide. At the same time, until yesterday such questions were relevant. After Jerome Powell’s speech, investors received hints that the US dollar may strengthen across the board. In the medium term, the index may grow to 96-98.
Meanwhile, the dollar/yen pair may perform an upward reversal. The pair has been declining for a week, reaching the resistance level. Now, it is trading at 113 as we predicted earlier. So, analysts expect the pair to fall to 112.70, its current resistance level that has not yet been broken. The price may rebound from this level. In light of recent events, traders are likely to try to lock in profits. As a result, the pair will be able to rise after breaking through 113.35.
The AUD/USD pair is trading at 0.7115. It is unlikely to decline below 0.7100 because of the strong resistance level. Besides, fundamental data, as well as economic indicators, also show the resilience of the Australian economy. So, it may start recovering quite soon. This is why in the medium term, analysts expect an upward reversal of the pair from the indicated resistance level.
Australia's economy shrank by 1.9% on a quarterly basis in the third quarter versus market expectations of a 2.7% decline and after a 0.7% growth in the second quarter. This was the first contraction since the second quarter of 2020 amid prolonged lockdown in New South Wales, Victoria, and the Australian Capital Territory. However, on an annual basis, the economy managed to expand. The increase exceeded the decline for the indicated period.
Let’s sum up. Investors continue to assess the risks associated with the new strain. Vaccine manufacturers have expressed concerns that current vaccines may be less effective against Omicron. As a result, markets are gripped by uncertainty, which usually leads to volatility.
That’s all for now! See you!
02:16 Australia GDP Growth Rate
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