16.01.201811:20 Forex Analysis & Reviews: AUD / USD: Conditions for storming the 80th figure

The pair of AUD / USD, like all dollar pairs, reacts to the weakening of the US currency. However, the Australian dollar has its "own" reasons to become more expensive, abstracting from macroeconomic events in the United States. For today, the pair has got close to borders of 80th figure, and in the next few days it will be clear whether the bulls of AUD / USD will storm a multi-month maximum or will take a siege position, having receded from a price peak.

Let's start with the general reasons for the weakening of the US dollar. The descending long-term trend of the greenback looks rather abnormal, taking into account the FRS's intentions to increase the interest rate three times this year. The minutes of the last meeting of the Federal Reserve testify to the "hawkish" plans of the regulator, despite a weak increase in inflation indicators. Here, you can appeal to the fact that the voting composition of the Federal Reserve of the 2018 sample differs significantly from the December composition, but the latest statements by "newcomers" indicate a high probability of continuing the course taken earlier. Suffice it to recall the comments of John Williams, whom last week announced the need to triple the rate increase.

It remains an open question whether the new head of the Federal Reserve, Jerome Powell, will support this "hawkish" spirit. But at the moment, experts are considering the situation a little differently. The bottom line is that the tightening of monetary policy in the US ceased to be the driver that allowed the dollar to dominate almost all currency pairs.

Comparing the current situation with the period of 2014-2016, we can agree that the Fed has lost its "uniqueness" in the context of normalizing the terms of monetary policy. In this direction, the Bank of Canada, the Bank of England, the European Central Bank and, in some respects, the Bank of Japan, are already moving. Moreover, if the above-mentioned regulators are just starting the tightening cycle, the Fed will soon approach the "wait-and-see phase". Today, the interest rate is at the level of 1.5%. Most economists polled by Bloomberg believe that in the long term, interest rates will stabilize at 2.85%, while the Fed's preliminary forecast in this regard is slightly lower - 2.75%. And this is provided if the growth rate of inflation accelerates. Otherwise, the "pause" can be set by the regulator much earlier than the announcement of the announced target.

In turn, the growth of the world economy and the commodity market allows many leading central banks to begin the cycle of tightening monetary policy. This fact allows traders to reorient their interests, especially given the continuing uncertainty about the Fed's actions this year. All this puts pressure on the US currency, causing the dynamics of dollar pairs.

The pair of AUD / USD did not stand aside from this process, especially against the backdrop of a record growth in the commodity market. And it's not just about oil. Yesterday, the copper updated the multi-month highs, reaching $ 7,259 per ton. The aluminum and nickel also rose in price, and zinc even reached 10-year highs.

An important prerequisite for the overall fundamental picture is the growth of China's key macroeconomic indicators. Last year, the situation in China's foreign trade improved, domestic consumer demand stabilized, and high-tech industries demonstrated positive dynamics. This Thursday, January 18, data on the growth of the Chinese economy will be published. According to experts' forecasts, the indicator will grow both for the fourth quarter and for the whole 2017 (+ 6.9%). This will be an important information reason for the growth of the Australian currency.

Another important indicator on this day will be released directly in Australia. It is about the dynamics of the labor market. The unemployment rate should remain on the values of October and November, that is at a record low of 5.4%. But the indicator of growth in jobs can show a very mediocre result - 15.2 thousand (for comparison - in November, 61.6 thousand jobs were created). Any deviation from the forecast figures in the direction of improving the situation will undoubtedly strengthen the Australian currency.

It is worth recalling that the recently published data on inflation from TD Securities retained a certain optimism. The indicator, although slightly slower in December, but still remained above 2%. The fact is that the official figures for Australian inflation are published quarterly, so the data from the Department of Economics and Trade of the University of Melbourne is used as a monthly benchmark. If, in addition to inflation, the growth of the labor market continues, the national currency will receive an occasion for further growth.

Technically, the pair is trading in an uptrend on the signal "Line Parade" indicator Ichimoku Kinko Hyo. Also, the pair is located between the upper and middle line of the Bollinger Bands indicator, which act as support and resistance levels and correspond to the levels of 0.8002 and 0.7809. The Tenkan-sen line of the Ichimoku indicator Kinko Hyo acts as the nearest support level and corresponds to a mark of 0.7890, the breakout of which will open the way to the midline of the Bollinger Bands indicator. The main northern goal of the pair bulls is the anchoring in the area of the 80th figure.