AUD/USD Persists in Rally Efforts, Showing Resilient Upward Momentum

Chandan Gupta

Traders' Opinions

Economic

Forex

Summary:

Aussie resilient, targets 50-day EMA. Notable resistance at 0.6625, potential support at 0.6450 amid speculation on Fed rates. Stay tuned as market dynamics unfold, influencing currency trends.

Fundamental Analysis

During Tuesday's trading, the Australian dollar initially dipped but later rebounded, signaling renewed strength. The market seems poised to target the 50-day and, if needed, the 200-day EMA.

Anticipating a crucial resistance level at 0.6625, breaching it would mark a significant win for Aussie bulls. However, caution is advised, considering historical activity around the 0.65 level, which could witness increased volatility if the tide turns.

The 0.6450 level, corresponding to the most recent swing low, is expected to provide support if maintained. The Federal Reserve's potential rate cut later in the year is a key factor influencing the US dollar's value. Despite a delayed timing, its impact on the market remains substantial.

Chart analysis indicates probable noise and choppiness, demanding a prudent approach. A collapse below crucial levels could lead the Aussie to the 0.63 mark swiftly. This currency pair is often considered "risk on, risk off," making it crucial for traders to monitor the Chinese economy, a significant determinant of the Australian dollar's direction.

With support and resistance spaced in approximately 50-pip increments, maneuvering room is limited. Consequently, this market is likely tailored for short-term traders. Unless you fall into that category, the Australian dollar may not be the ideal choice presently.

Given the Aussie's sensitivity to external factors, rigorous risk management is paramount. Recognizing influences from various sources underscores the importance of strategic placement of stop-loss orders, especially in the current choppy environment. AUD/USD Persists in Rally Efforts, Showing Resilient Upward Momentum_1

AUD/USD Persists in Rally Efforts, Showing Resilient Upward Momentum_1

Technical Analysis

Looking at the AUD/USD scenario, a potential uptrend could lead the pair to revisit the temporary 55-day SMA at 0.6629. This area aligns with the late January highs, specifically on January 30. A breakthrough beyond this range might propel the pair toward the December 2023 peak of 0.6871 (December 28). Following that, we have the July 2023 high of 0.6894 (July 14) and the June 2023 peak of 0.6899 (June 16), all lining up before the crucial 0.7000 milestone.

On the flip side, bearish endeavors could see AUD/USD testing its 2024 low around 0.6452, recorded on February 13. A breach below this level might trigger a revisit to the 2023 low of 0.6270 (October 26), followed by the round level of 0.6200 and the 2022 low of 0.6169 (October 13).

It's crucial to note that for the AUD/USD to witness more short-term gains, a clear surpassing of the significant 200-day SMA is imperative, currently positioned at 0.6562.

A glance at the 4-hour chart provides hints that the recovery momentum is set to continue in the near future. Initial resistance levels stand at 0.6579, followed by 0.6610. A breach of this zone signals a potential advance towards 0.6728. On the downside, a break of 0.6442 may lead to a decline to 0.6347, followed by 0.6338. Positive signs come from the MACD, which has shifted to the positive zone, and the RSI, which appears stable near 57.

In navigating these market dynamics, it's essential for traders to stay vigilant and adapt to potential shifts. The technical indicators are suggestive of a positive trajectory, but the landscape remains dynamic, requiring a judicious approach to potential resistance and support levels.

As we monitor these developments, keep an eye on the evolving 200-day SMA, as its significance cannot be overstated in shaping the near-term outlook for AUD/USD. Traders should remain flexible in their strategies, considering both bullish and bearish scenarios, given the inherent volatility in the foreign exchange market.

In summary, the AUD/USD pair seems poised for interesting moves, with a potential upward trajectory supported by technical indicators. However, the market remains fluid, and prudent risk management is paramount. Traders should stay tuned for further price action, especially around key levels, as they navigate the ever-changing dynamics of the currency pair. AUD/USD Persists in Rally Efforts, Showing Resilient Upward Momentum_2

AUD/USD Persists in Rally Efforts, Showing Resilient Upward Momentum_2

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Comments

Add to Favorites

Alex

Economic

Stocks

Hong Kong stocks surged to a seven-week high as property developers advanced on speculation the city’s government will remove more curbs this month to stem an industry slump. China pledged to improve policy transparency while state-run funds have stepped up intervention.

The Hang Seng Index rallied 1.6 per cent to 16,503.10 on Wednesday to reach the highest level since January 5. The Tech Index soared 2.7 per cent, while the Shanghai Composite Index climbed 1 per cent.

Sun Hung Kai Properties advanced 3.7 per cent to HK$75.15, Henderson Land added 2.8 per cent to HK$21.90 while New World Development climbed 4.6 per cent to HK$9.79. The Hang Seng Property Index rose 3 per cent to a one-month high. Tech stocks also rallied, as Alibaba Group strengthened 1 per cent to HK$72.90 and Tencent rose 1.6 per cent to HK$288.80 while Meituan appreciated 4.9 per cent to HK$77.

The benchmark index pared a rally of as much as 3 per cent as HSBC slumped 3.8 per cent to HK$60.25. The UK lender reported a 56 per cent jump in net profit in 2023, as net interest margin slimmed in the final quarter and credit losses weighed on results.

What moved the Hang Seng Index?

Hong Kong Stocks Surge To 7-week High On Property Market Speculation As ChinA Pledges Regulatory Predictability Amid Market Intervention_1

The Hang Seng Index has risen 6.6 per cent this month, clawing its way up from a 14-month low in January as Beijing stepped up measures to repair investor confidence. The rebound in February has restored US$200 billion of value to the city’s stock market through February 20, according to Bloomberg data.

Financial secretary Paul Chan Mo-po will deliver the city’s budget on February 28 as traders bank on measures to jump-start the local economy. Some industry veterans have also called on Chan to dismantle market hurdles as asset values diminished. The government imposed curbs to cool a speculative frenzy in the 1990s.

Stewart Leung, chairman of the Real Estate Developers Association, said he recently briefed Chan on the state of the industry and that the government has taken note of the market’s concerns and issues affecting the economy.

Stocks in mainland China extended gains. China’s ‘national team’ has stepped up market intervention to support stock prices, as indicated by a surge in net assets of the nation’s biggest exchange-traded funds. Separately, the Communist Party’s Central Financial Commission has pledged to increase regulatory predictability and reduce restrictive acts.

“The government continued to provide liquidity and support to the market,” Kelly Chung, investment director and head of multi-asset at Value Partners, said in a note on Wednesday. Still, sentiment will be solidly lifted with concrete details of the policy, she added.

Longfor soared 9.5 per cent to HK$10.04 and peer China Resources Land jumped 4.9 per cent to HK$25.60, leading gains among mainland developers. The nation’s commercial banks on Tuesday cut the five-year loan prime rate cut by a record 25 basis points, a signal that policymakers are worried about the housing market slump.

Other major Asian markets mostly traded lower, tracking weaker overnight US equities The Nikkei 225 in Japan fell 0.3 per cent and the S&P ASX 200 in Australia declined 0.7 per cent, while the Kospi Index in South Korea lost 0.2 per cent.

Source：South China Morning Post

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Comments

Add to Favorites

Warren Takunda

Central Bank

Economic

Traders' Opinions

The Reserve Bank of New Zealand's potential decision to raise interest rates next week looms as a factor that could send shockwaves through financial markets. The New Zealand Dollar is anticipated to experience heightened volatility as global markets brace themselves for the possibility of an unexpected interest rate hike by the Reserve Bank of New Zealand (RBNZ) on February 28.

Despite the country's economy being technically in a recession, speculation has been circulating in the local market that the RBNZ might consider not just one but two rate hikes this year, up from the current 5.5%.

The ramifications of a potential surprise rate hike by the RBNZ transcend the confines of New Zealand, reverberating across global financial markets and impacting Western bond markets in particular. As a first-mover in the central banking sphere, the RBNZ holds a unique position of influence and precedent-setting. Notably, it was the pioneering central bank to embrace modern inflation targeting as a cornerstone of its monetary policy framework. Moreover, the RBNZ distinguished itself as the inaugural major bank to initiate interest rate hikes within the current economic cycle, setting a precedent that resonates among central banks worldwide.

Market expectations for an RBNZ rate hike gained momentum after domestic lender ANZ suggested that the central bank's next move could indeed be a rate hike, driven by stronger-than-expected quarterly employment figures.

There is mixed mixed economic signals, highlighting signs of robust business activity, such as the presence of expensive boats in Auckland harbor, busy cruise ships, and long queues of tourists at upscale shops. This nuanced economic landscape suggests a potential K-shaped economy, reminiscent of discussions during the COVID era.

While the RBA and RBNZ express reluctance to pursue rate hikes, they find themselves unable to categorically rule out such a move. The threat of a rate hike, while intended to temper market exuberance, could become a necessary measure. However, if aggregate demand persists above the economy's supply capacity, and fiscal stimulus continues, the question arises: what alternatives are on the table?

Traditionally, an RBNZ rate hike would be seen as supportive of the New Zealand Dollar. However, concerns are already emerging about the potential for rate hikes to exacerbate the country's recessionary conditions. If this narrative gains traction, rate hikes could prove detrimental to the Kiwi Dollar.

Certainly, one thing is assured – the upcoming week promises heightened volatility for the New Zealand Dollar as investors keenly await the RBNZ's decision and its potential repercussions on the currency and broader financial markets.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Comments

Add to Favorites

Alex

Economic

The UK’s magazine The Banker has run an article highlighting optimistic opinions of experts on Vietnam’s economic outlook in 2024.

Vietnam saw gross domestic product growth of 5.1% in 2023, which is forecast to rise 6–6.5% in 2024, making Vietnam one of the strongest growth environments in Southeast Asia, the article noted.

The article quoted Khanh Vu, Deputy Managing Director at VinaCapital Fund Management as saying that the pick-up in GDP growth will be driven by rising exports and manufacturing, tourism, and a modest recovery in domestic consumption and consumer sentiment. Economic growth has also been supported by a favourable interest rate environment, he added.

Helmi Arman, economist at Citi, a US-based financial service company, said that after a freeze in early 2023, activity in the real estate sector has picked up in the second half of the year. The government is pushing through structural reforms that lay the foundation for a more sustainable recovery in the real estate sector.

The article underlined that for international investors, Vietnam’s manufacturing sector remains the most appealing, specifically in the smartphone supply chain and for consumer electronics. For domestic investors, garment, footwear, and furniture exports are gaining the most interest.

Both Vu and Kenglin Tan, senior portfolio manager, equities at Manulife Investment Management, showed optimism about Vietnam’s export prospects thanks to signs of stabilisation.

There was some trepidation that Vietnam’s decision to implement the global minimum tax rate would impact investment flows, but this has not transpired, Tan said, adding that from a foreign investor perspective, whether they invest in Vietnam or other countries in the agreement like Mexico or Thailand, they are impacted by the same policy. It can be seen from FDI flows in December 2023 after the policy was announced, that investors have not been deterred at all, she underscored.

There has also been a surge in interest in the FDI space. Vu noted that the Republic of Korea has pledged its support in investing in Vietnam, stating plans to exceed 100 billion USD in total investment by 2025. To date, the country has invested 84 billion USD into Vietnam. The focus is on manufacturing, with 62 billion USD invested into more than 4,600 projects, with large manufacturers including Samsung, LG and SK. A major project benefiting from FDI support is Long Thanh International Airport, being constructed close to Ho Chi Minh City, the expert stated, underlining that FDI support for the project has come from the US, Japan, France, Turkey, and the Netherlands.

To further extend the potential for international investment, Vietnam is opening up its stock market settlements by allowing domestic brokers to vouch for foreign investors, enabling them to purchase shares. Arman says allowing greater levels of foreign ownership could mitigate against future shocks.

In the field of tourism, the experts noted that the sector is at 70% of pre-COVID-19 levels, but domestic tourism is booming. Chinese tourists were 30% of their pre-COVID-19 levels last year.

The article cited a report from data company Vietnam Report JSC finding 66% of respondents in the tourism and hotel sector expressing confidence for 2024. Of the respondents, 93% stated the new visa rules would be a lever for the country’s tourism growth trajectory, according to the report.

Source:VNA

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Comments

Add to Favorites

Ukadike Micheal

Economic

In January, the national index for new home prices in Canada experienced a modest 0.1% decline on a monthly basis, with prices either decreasing or remaining unchanged in 21 of the 27 surveyed census metropolitan areas (CMAs). Ottawa recorded the largest month-over-month decrease at -0.4%, marking the 13th consecutive monthly decline for the region. Other notable declines were observed in Vancouver (-0.3%), Montréal (-0.3%), and Calgary (-0.2%). New Home Prices in Canada Experience Modest Decline in January_1

New Home Prices in Canada Experience Modest Decline in January_1

Conversely, the largest month-over-month increases in new home prices occurred in Edmonton (+0.8%) and Trois-Rivières (+0.4%) in January. Builders in these CMAs cited increased construction costs and improved market conditions as reasons for the price hikes. However, on a national scale, new home prices saw a year-over-year decrease of 0.7% in January, marking the 10th consecutive annual decline – the longest period of consecutive decreases since 2009.

Ottawa reported the largest year-over-year decline at -5.0%, followed by Victoria at -3.2%. In contrast, the largest annual increases were observed in Québec (+3.3%) and Calgary (+2.5%).

From a technical viewpoint, the fluctuations in new home prices offer insights into the broader dynamics of the Canadian real estate market. The persistent declines in Ottawa, despite the builder promotions to boost sales, indicate challenges in the local market that extend beyond short-term promotional strategies. The increases in Edmonton and Trois-Rivières, driven by construction costs and market conditions, underscore the nuanced factors influencing regional real estate trends.

The year-over-year national decline in new home prices for the 10th consecutive month reflects broader economic factors and shifts in consumer confidence. This extended period of decrease since 2009 may be indicative of larger economic trends impacting the housing market, warranting a closer examination of factors such as employment rates, interest rates, and overall economic stability.

The Canadian new home price landscape in January tells a tale of localized challenges and regional variations within the broader context of a national decline. While some areas grapple with sustained decreases, others experience growth driven by specific market conditions. The longer-term annual downturn underscores the need for a comprehensive analysis of economic indicators to unravel the complex interplay of factors shaping the Canadian real estate market. As stakeholders navigate this intricate landscape, understanding the underlying dynamics becomes crucial for informed decision-making, both for the industry and potential homebuyers.

Source: Statistics Canada

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Comments

Add to Favorites

Alex

Cryptocurrency

Although bitcoin fell marginally on Tuesday, it continues to trade above $52,330. In the past one month alone, the cryptocurrency has risen by around 26 percent. In the past six months, the token has gone up by 100 per cent.

There are a number of reasons cited for this rally. One was the recent approval to spot bitcoin ETF by the US regulator Securities and Exchange Commission (SEC).

It was followed by the offering of BlackRock and Fidelity.

The second key reason for the ongoing rally is the upcoming bitcoin halving that is slated to happen in the middle of 2024.

Edward Snowden, former NSA (National Security Agency) contractor, has put his weight behind the token’s likely surge.

He wrote on X platform: “"Bitcoin is the most significant monetary advance since the creation of coinage."

What is bitcoin halving?

One of the significant events of bitcoin is halving when the reward for mining is reduced by half. The last halving was done on May 11, 2020 after which the network participants validating transactions are awarded 6.25 bitcoins for each block mined successfully.

The next halving is slated to happen in mid-2024 after which the block reward will decline to 3.125 bitcoins.

The final halving will occur in the year 2140 when the number of bitcoins circulating will reach the supply of 21 million. As of now, 19 million bitcoins have been mined, leaving only two million more to be mined.

“One of the most important features of Bitcoin is its limited supply and issuance mechanism," says Forbes quoted Bruce Fenton, CEO of Chainstone Labs, as saying.

To be able to understand the concept behind validating a transaction, one must understand how bitcoin works.

As we are aware that bitcoin's underlying technology is blockchain which consists of a network of computers called nodes. Each full node is responsible for approving a transaction in bitcoin's network.

In order to do that, the node conducts a check of the transaction's validity.

It is vital to note that each transaction is approved individually and after approval, the transaction is added to the blockchain and broadcast to other nodes.

What does the industry believe?

Most crypto industry spokespersons in India believe that this will be a significant event and would play a key role in giving an impetus to bitcoins as well as to other crypto tokens.

“Bitcoin Halving is a proof of the maturity of decentralisation. It’s a demonstration of the genius of Satoshi. Halving controls Bitcoin's inflation. But the rules aren't made on the go, but set-in-stone and made immutable in code. Like clockwork, every four years...or nearly every 210,000 blocks, the algorithm cuts the rewards for miners in half. We are now approaching the Fourth Halving since Bitcoin's inception," says Ashish Singhal, Co-founder and Group CEO, Peepal Co.

Some even believe that the halving would enable bitcoin break its previous all-time high of $68,789 it reached on Nov 10, 2021.

Vikram Subburaj, CEO, Giottus Crypto Platform, says “Currently, BTC is consolidating near $52,000 after an exciting run in the past 14 months. It is widely anticipated that BTC will surpass its $69,000 all-time high in the quarter post-halving this year. Historically, Bitcoin halving events have led to bullish momentum in the months before and after halving."

Meanwhile, Sumit Gupta, Co-founder of CoinDCX, says, “With the halving event just 58 days away, there will be a supply shock while the demand continues to grow. This delicate balance between supply reduction and increasing demand creates an environment ripe for momentum, signalling the dawn of the next bull run. Anticipation mounts as we foresee Bitcoin scaling unprecedented peaks post-halving, marking yet another chapter in its remarkable journey within this calendar year."

“The upcoming halving is another major milestone for investors which is driving the optimism and buy action in the market. It’s important to note that liquidity is improving for the overall crypto market and Bitcoin’s $1 trillion market cap is a testament to the resilience," says Rajagopal Menon, VP, WazirX.

Source：mint

Risk Warnings and Disclaimers

Comments

Add to Favorites

Samantha Luan

Stocks

The benchmark index is up almost 9% this year and nearly as much in dollar terms, to put it ahead of regional peers such as Malaysia or the Philippines, as well as the S&P 500.

Perennial speculation that the market, which dominates "frontier" indexes, could be upgraded to "emerging" status is also gathering steam, with JPMorgan noting that a preliminary decision by index provider FTSE may come as soon as September, in line with an earlier Reuters report.

That would draw further flows to the US$200 billion market by opening it to more and larger funds, said South Korea's broker Mirae Asset Securities in a report that noted the return of foreign investors to the market.

Foreigners bought, on a net basis, around US$48 million in Vietnamese stocks in January, according to exchange data, the first positive month since March last year.

The Vietnam index lost a third of its value in 2022, as a crackdown on property lending hammered confidence in a market dominated by banks and real estate firms.

It rose 12% in 2023 and lenders have been the main drivers of gains, as profits surge and investors bet the worst is over.

Some of the largest banks saw a double-digit rise in their share value, including state-owned VietinBank and private lender Techcombank, which have recorded increases of 31% and 22.8% respectively so far this year.

Net profit at VietinBank leapt nearly 45% in the fourth quarter of 2023, while Techcombank reported a 25% rise in the same period.

Analysts said banks' good performance was also linked to new regulations approved by parliament in January, including one on land valuations that could reduce banking risks, although the impact of the complex texts is still not fully clear.

China's woes, Vietnam's gains

The performance contrasts with sliding Chinese markets and gloom enveloping the outlook for Vietnam's giant northern neighbour.

The country remains closely interconnected to China, which is the source of a large part of components for smartphones or solar panels that manufacturers in Vietnam assemble for export.

But China's economic slowdown is expected to affect Vietnam less than others whose trade with Beijing hinges on exports of raw materials, asset manager Dragon Capital said in a monthly report, such as coal from Indonesia or rubber from Thailand.

Tourism arrivals in January topped pre-pandemic levels, and Vietnam continues to attract manufacturers who want to relocate some of their operations from China to reduce trade risks with the United States and cut labour costs.

Foreign investment pledges in January rose 40% from a year earlier to US$2.4 billion, with more than half of it going to real estate businesses, according to official data.

To be sure, signs of strain remain in the property sector and foreign flows are small. Foreign ownership caps on banks will also be lowered from July, a move that could further restrict investment.

The market upgrade is also likely to face delays, as the government has not yet adopted necessary reforms and the time for FTSE to assess changes may not be sufficient to meet the September deadline, said Trinh Thai, analyst at Vietnam's top broker SSI Securities Corporation.

Even in the best scenario, an announcement by FTSE in September would allow a formal upgrade only in 2025, as six to 12 months are necessary before the actual promotion, according to FTSE procedures.

Still, the index is expected to remain attractive, with price-to-earnings ratios far lower than the longer-run average, said Petri Deryng of private equity PYN Fund Management.