The rout that sent global markets into a slump last week has no signs of easing on Monday morning, especially after comments from Treasury Secretary Steve Mnuchin on Sunday. He said that President Donald Trump had no intention of backing down and was not worried about a trade war.
Compared with a big volatility in the stock markets, the Forex markets showed more calmness. The DXY failed to rebound and declined further to 89.014, with a high volatility but failed to attempt a breakout in face of a major resistance ahead. The upcoming data for U.S. economy this week may fuel its bounce from the low level at this stage, since the March’s CPI and the annualized GDP in the fourth quarter are both estimated to grow based on a robust economic condition.
The Aussie dollar seems to start its rebound path after two months’ slip, showed by significant growth in intraday prices, which is US$ 0.7718 as of 11:40 a.m. in Sydney. As what I had showed in last article for AUD/USD technical analysis, it has already been bolstered by a descending trendline connected by Feb. 9 and March 1’s lows.
For the prospect of AUD/USD, the pair likely extends gains for a bit before facing a major resistance on 61.8% Fibo retracement around 0.7743. Coupled with the forecast of the DXY with those well-expected upcoming data, AUD/USD might retreat after testing the 61.8% retracement.
Chart 1: AUDUSD Daily
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