11 Nov 2013
AUD/USD tumbles as markets wait for China Plenum outcome
FXstreet.com (Athens) – The AUD/USD is under pressure the last couple of hours, as the markets participants are focused on the China’s Plenum outcome amidst lull in data risk.
The AUD/USD is peeling back to its opening level in the Wellington trading session amidst the so-called “China Third Plenum”, which in plain English is a conference of the ruling party’s ‘top chairs’ including President Xi Jinping and Premier Li Keqiang that essentially focuses on economic policy. Especially for the Aussie the outcome of the China Third Plenum will be of great significance; generally speaking, the major theme of the Plenum will be China’s transition from an export-driven to a consumer-based growth model. Bearing that in mind it is comprehensible that the number one concern for financial markets will be the extent to which the reforms adopted at the Plenum will impact near-term performance in the world’s second-largest economy. Australia is the greatest trading partner of the China, thus, will be probably mostly influence by the Plenum outcome.
Technical Aspects on the AUD/USD
Marc Chandler Global Head of Global Currency on behalf of BBH , mentions that “Encouraged by a dovish monetary policy statement by the Reserve Bank of Australia, the Aussie was pushed convincingly below $0.9400 for the first time in a month ….. Scope for corrective upticks extends toward $0.9400-25….The US dollar has carved out a potential head and shoulders pattern…A convincing break of the $0.8200 neckline would suggest potential toward $0.7850.”
The AUD/USD is peeling back to its opening level in the Wellington trading session amidst the so-called “China Third Plenum”, which in plain English is a conference of the ruling party’s ‘top chairs’ including President Xi Jinping and Premier Li Keqiang that essentially focuses on economic policy. Especially for the Aussie the outcome of the China Third Plenum will be of great significance; generally speaking, the major theme of the Plenum will be China’s transition from an export-driven to a consumer-based growth model. Bearing that in mind it is comprehensible that the number one concern for financial markets will be the extent to which the reforms adopted at the Plenum will impact near-term performance in the world’s second-largest economy. Australia is the greatest trading partner of the China, thus, will be probably mostly influence by the Plenum outcome.
Technical Aspects on the AUD/USD
Marc Chandler Global Head of Global Currency on behalf of BBH , mentions that “Encouraged by a dovish monetary policy statement by the Reserve Bank of Australia, the Aussie was pushed convincingly below $0.9400 for the first time in a month ….. Scope for corrective upticks extends toward $0.9400-25….The US dollar has carved out a potential head and shoulders pattern…A convincing break of the $0.8200 neckline would suggest potential toward $0.7850.”