Daily brief: AUD/USD rises on softer USD as Australian consumer confidence nears

Tuesday’s Asia-Pacific outlook

Asia-Pacific markets look ready to extend Monday’s gains after a risk-on Wall Street trading session. The benchmark S&P 500 closed 1.06% higher, led by gains in the energy, information technology, and consumer discretionary sectors. The US dollar softened against most major peers as traders prep for a soft US CPI report due on Tuesday. While market bets continue to favor a 75-basis point FOMC hike later this month, a decline in CPI would likely weigh on future meetings.

Gold prices rose against the Greenback. Silver prices surged. According to Friday’s Commitments of Traders (COT) report from the CFTC for the week ending September 06, non-commercial silver short positioning increased to the highest level since July 2019. The elevated amount of shorts likely contributed to today’s upward action, as some traders bought to cover. XAG/USD rose over 5% versus gold’s 0.5% gain. The gold/silver ratio—a measure of how much silver is required to buy an ounce of bullion—fell near multi-month lows.

Soybean prices rose in Chicago after the USDA’s World Agricultural Supply and Demand Estimates (WASDE) report was published. Soybean production is forecasted to fall by 152 million bushels. Corn prices rose while wheat fell. Random length lumber futures surged nearly 10% as a potential US national railway strike threaten food and energy shipments. Negotiations between unions and rail companies will continue until Friday. The White House is reportedly involved.

Japan’s third-quarter Business Survey Index (BSI) Large Manufacturing is due this morning. The island nation’s August producer price index (PPI) is expected to increase 0.4% from the month prior. The Westpac Melbourne Institute’s consumer sentiment survey for September 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. The RBA has hiked rates again since then. AUD/USD printed a fresh high for September during New York trading.

AUD/USD technical outlook

AUD/USD is trading just below its 50-day Simple Moving Average (SMA) after piercing above the 61.8% Fibonacci retracement. A break above that 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

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