Aussie traders eye December’s employment data

The USD tended to be on the rise yesterday against a number of its counterparts as it was supported by rising US yields, especially against the common currency. It seems that the market has increasingly been pricing in a more aggressive hawkish stance from the Fed regarding its monetary policy and given that the Fed will be having its meeting next week. The market worries for the possible future rate hikes were reflected by rising US yields with the 10-year yield reaching 1.8740 and fuelling the bulls for the USD while on the other hand the bears for gold and US stockmarkets.

It’s characteristic how all three major US stockmarket indexes weakened, with the market sentiment being particularly bearish for the US tech sector. Today we note the release of the US construction data for December. The number of building permits is expected to drop slightly as is the number of housing starts and should the actual rates and figures show validate the drop expected, we may see the USD slipping as they would imply a contraction of economic activity for the US construction sector in the last month of 2021. Yet we tend to expect that should the market sentiment continue we may see it overshadowing today’s financial releases.

Nasdaq dropped yesterday and during today’s Asian session, breaking consecutively the 15415 (R2) and the 15170 (R1) support lines, both now turned to resistance. We tend to maintain a bearish outlook for the index, given also that  the RSI indicator below our daily chart is near the reading of 30 with a downward slope also supporting the notion of a bearish sentiment for the index. Should the bears actually maintain control over the index, we may see it breaking the 14915 (S1) support line and aim for the  14600 (S2) support level. Should the bulls say enough is enough and take over, we may see the index reversing course breaking the 15170 (R1) and take aim for the 15415 (R2) level.

AUD focus on the release of December’s employment data

AUD tended to ease against the USD, yet on a monetary level we may see the market also expecting a more confident stance on behalf of the RBA which could provide some support for the AUD should it intensify. Analysts tend to highlight the release of Australia’s CPI rates next week as key, regarding the bank’s stance however the bank had repeatedly stated in the past also its focus on the Australian employment market. In Thursday’s Asian session, we note the release of Australia’s employment data for December.

The employment change figure is expected to drop and if so and despite a correction lower being expected from November’s stellar figure, it could be a hint that the tightening of the Australian employment market is losing steam, while on the other hand the expected tick down of the unemployment rate could provide some comfort for Aussie traders. On a more fundamental level, market sentiment could be the main factor behind the commodity currency’s direction in the coming days as should there be a more risk on approach it could provide tail winds for the Aussie and vice versa.

AUD/USD maintained some bearish tendencies as it tested the 0.7170 (S1) before bouncing on it. Nevertheless, we still are bearishly inclined as the pair prints lower highs and lower lows and the RSI indicator below our 4-hour chart is between the readings of 50 and 30. Should the selling interest be renewed, we may see the pair breaking the 0.7170 (S1) and take aim of the 0.7100 (S2) level. On the other hand should the correction higher be extended and transformed into a full buying interest of the market, we may see the pair breaking the 0.7230 (R1) resistance line in search of higher grounds.  

Other highlights for today and early tomorrow

Today during the European session, we note for GBP trades the release of UK’s December CPI rates while in the American session BoE Governor Andrew Bailey is to speak and could create some volatility for GBP pairs. EUR traders could be keeping an eye out for Germany’s December HICP rates, while CAD traders could be focusing on the release of Canada’s December CPI rates.

US100 Cash Daily Chart 

Support: 14915 (S1), 14600 (S2), 14400 (S3)

Resistance: 15170 (R1), 15415 (R2), 16700 (R3)

AUD/USD H4 Chart 

Support: 0.7170 (S1), 0.7100 (S2), 0.7050 (S3)

Resistance: 0.7230 (R1), 0.7295 (R2), 0.7365 (R3)

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