Confirming you are not from the U.S. or the Philippines

By giving this statement, I explicitly declare and confirm that:
  • I am not a U.S. citizen or resident
  • I am not a resident of the Philippines
  • I do not directly or indirectly own more than 10% of shares/voting rights/interest of the U.S. residents and/or do not control U.S. citizens or residents by other means
  • I am not under the direct or indirect ownership of more than 10% of shares/voting rights/interest and/or under the control of U.S. citizen or resident exercised by other means
  • I am not affiliated with U.S. citizens or residents in terms of Section 1504(a) of FATCA
  • I am aware of my liability for making a false declaration.
For the purposes of this statement, all U.S. dependent countries and territories are equalled to the main territory of the USA. I accept full responsibility for the accuracy of this declaration and commit to personally address and resolve any claims or issues that may arise from a breach of this statement.
Cancel Confirm
We are dedicated to your privacy and the security of your personal information. We only collect emails to provide special offers and important information about our products and services. By submitting your email address, you agree to receive such letters from us. If you want to unsubscribe or have any questions or concerns, write to our Customer Support.
Confirm
Octa trading broker Sign up Log in
Octa trading broker
Open trading account
Test
Trading news
Back
20 Oct 2022

AUD/USD bounces off low amid softer USD, upside potential seems limited

  • AUD/USD recovers early lost ground amid the emergence of some selling around the USD.
  • A positive risk tone undermines the safe-haven buck and benefits the risk-sensitive aussie.
  • A combination of factors might continue to act as a headwind and favour bearish traders.

The AUD/USD reverses an intraday dip to a three-day low and climbs back above mid-0.6200s in the last hour, though lacks any follow-through buying.

A modest bounce in the US equity futures prompts some selling around the safe-haven US dollar, which, in turn, offers some support to the risk-sensitive aussie. That said, a combination of factors acts as a headwind for the AUD/USD pair and should continue to keep a lid on any meaningful recovery.

Rising bets for aggressive interest rate hikes by the Federal Reserve remain supportive of elevated US Treasury bond yields. In fact, the rate-sensitive 2-year US government bond stands near a 15-year peak and the benchmark 10-year Treasury note hits its highest level since the 2008 financial crisis.

Furthermore, any optimistic move is likely to remain capped amid growing worries about a deeper global economic downturn, which could further benefit the greenback's relative safe-haven status. Apart from this, the softer Australian jobs report might also contribute to capping gains for the AUD/USD pair.

In fact, the Australian Bureau of Statistics reported that the number of employed people rose by 0.9K in September, well below expectations for a reading of 25K. This, to a larger extent, overshadows the fact that the unemployment rate held steady at 3.5% - the lowest level since the early 1970s.

Apart from this, the Reserve Bank of Australia's (RBA) decision to slow the pace of policy tightening earlier this month suggests that the path of least resistance for the AUD/USD pair is to the downside. Hence, a slide back towards the YTD low, around the 0.6170 area, remains a distinct possibility.

Traders now look to the US macro data - the Philly Fed Manufacturing Index, the usual Weekly Initial Jobless Claims and Existing Home Sales data. This, along with speeches by influential FOMC members and the US bond yields, will drive the USD demand and provide some impetus to the AUD/USD pair.

Technical levels to watch

 

Oct 20, 2022

FX option expiries for Oct 20 NY cut

FX option expiries for Oct 20 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 0.9695-05 1.9b 0.9715-25 744m 0.9750
Read more Previous
Oct 20, 2022

GBP/USD must trade below the 1.1150-1.1450 range before falling to 1.10 – DBS Bank

GBP/USD depreciated a second session by 0.9% to 1.1219. Economists at DBS Bank expect the pair to test 1.10 on a break under 1.1150. Political backdro
Read more Next