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Markets in the Asia-Pacific set at a higher opening at the start of the week. With the Omicron threat set aside, the S&P 500 sealed at a new record high last Friday on Wall Street. The traders are now focused on the Federal Reserve and monetary policy announcement this week, scheduled for Wednesday. Many traders and forex brokers Australia are anticipating that the Federal Reserve will raise the pace of contracting asset purchases and may hint at speeding up subsequent increases.
New Zealand has currently reported its PSI (performance of services index). The PSI gauge of BusinessNZ indicated an upward movement from 44.9 to 46.5, which suggests that the services will continue to contract at a slower rate.
October’s visitor arrivals declined -27.3 percent year-on-year. This marked a slight moderation post decline -58.1 percent in the previous month. The currency pair NZD/USD broke its losing streak, which continued for weeks, on Friday, even though NZD/USD lingered behind its counterpart, cross-Tasman AUD.
Japan released multiple data points that were much weaker than expected by analysts. The Tankan 4th quarter manufacturing index and core machine orders in November crossed the lines at 18 and 2.9 percent, respectively. Among the currencies, the Japanese Yen continues to be at its weakest levels v/s USD since 2017. The Yen is still greatly undervalued across several valuation metrics in comparison to many of its currencies alike.
Westpac in Australia will report December’s consumer confidence this week. AUD traders are expecting an improved number from 105.3 print in November since Australia is finally opening up after the extended lockdowns throughout the year. With the estimated tracking of the consensus analysts at around over 200k for last month, the monthly employment report is also due this week.
Technical Forecast – AUD/USD
AUD/USD is aiming to break September’s low level at 0.7170 once the prices made multiple intraday trials to break last week’s level. Healthy improvements are indicated by the MACD oscillator, recently breaking above the signal line. Additionally, the RSI (Relative Strength Index) is also tracking high. Prices may retreat back to low August levels near 0.7106 if the pair fails to pierce high.