Markets fall and the USD rise in risk off trade
AUD/USD => The pair falls to a 4-month low
BTCUSD => The cryptocurrency falls to a 3.5 month low
DAX => The index falls below 13600
AUD/USD tumbles on China concerns
AUD/USD is falling for a third straight day.
Since Thursday, the pair has tumbled 3.4% as the USD surged on the back of the Federal Reserve 50bp rate hike, expectations for a more hawkish Fed action to come, and strong US jobs report. Meanwhile, the risk-sensitive AUD is falling as the market mood sours and amid fears over the economic health of China as lockdowns in Shanghai were tightened and as the G7 unveils fresh sanctions on Russia.
Today there is no high-impacting US data to be released. Instead, the focus will be on Federal Reserve speakers, which are likely to keep up the hawkish calls. NAB business confidence is also due heading into Tuesdays.
| U.S. non-farm payroll | Expected: 428k (0k) | Previous: 428k |
Where next for the AUDUSD?
AUD/USD has been trending firmly lower since reaching 0.7660 in early April.
The pair has fallen below its 50 & 100 sma, taken out key supports, and the bearish RSI suggests more downside. Sellers will need a break below 0.70 psychological level and 0.9670 at the 2022 low to continue the downtrend to round level support of 0.69 and 0.6810 at the July’20 low.
Any recovery would need to see the pair recapture 0.7060February 4 low ahead of 0.71, the February 24 low.
Bitcoin falls below 35k
Bitcoin continues to sell off for a fifth straight session.
Since Thursday, the cryptocurrency plunged over 14% as extreme fear hit the market and riskier assets are out of favour across the board. The bitcoin price now trades below the key support of $35,000 in the aftermath of the Fed’s 50 basis point rate hike and is down some 50 % from its November ’21 record high.
The next support can be seen at 33,000, 2022 low ahead of 29,000, a level which offered support across the summer last year. Buyers would need to recapture 37,000 to negate the near-term downtrend.
DAX as recession fears rise
The DAX is set to start the new week over 1.3% lower after losing 3% last week, in its worst weekly performance since late February when Russia invaded Ukraine.
The EU proposed a phased-in embargo on Russian oil last week, which raised energy prices and fueled fears of stagflation. Concerns are growing that Putin could use today, an important military date, “Victory Day,” as an opportunity to call up more reserves to attack Ukraine.
The ongoing lockdown in Shanghai adds to the downbeat mood. The German economic calendar is light. Eurozone consumer confidence could decline further.
| EZ consumer confidence | Expected: -20 (2) | Previous: -18 |
Support can be found at 13250 (March 11 low) and 13000 (round number).
Resistance for the stock can be seen at 13910 (April 13 low) and 14075 (50 sma).
