Troubles in China’s real estate and private firms’ institutions rocked the Asian markets earlier today!
Will this lead to more losses for AUD/USD?
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Over the weekend, China’s largest private property developer Country Garden suspended the trading of 11 of its onshore bonds starting Monday.
Two clients of Chinese trust company Zhongrong International Trust Co. – one of China’s largest largest private wealth managers – said the firm delayed payment of maturing wealth products amid reports of liquidity concerns
BusinessNZ services index further contracted from 49.6 to 47.8 in July; “The results all point to a sharp drop in demand in July, significantly accelerating the slowing trend that had been evident for many months”
New Zealand’s overseas visitor arrivals up by 11.3% in June after three consecutive months of decline
Price Action News
With not a lot of top-tier data on tap, the markets had time to digest news of Chinese property developer company Country Garden Holdings not only suspending the trading of its 11 onshore bonds but also reportedly missing payments on two of its dollar bond coupons at an initial deadline.
It didn’t help that rumors went around that – Zhongrong International Trust – one of China’s largest largest private wealth managers – has delayed payment of maturing wealth products.
Talks of notable, big(ish) firms in China possibly defaulting on their debts shook risk-takers during the Asian session.
China-related AUD and NZD, in particular, dropped by around 0.50% against their counterparts before traders took a chill pill and focused on a possible soft landing and peak interest rates in the U.S.
Upcoming Potential Catalysts on the Forex Economic Calendar:
Japan’s preliminary Q2 GDP price index at 11:50 pm GMT
RBA’s meeting minutes at 1:30 am GMT (Aug. 15)
Australia’s quarterly wage price index at 1:30 am GMT (Aug. 15)
China’s data dump at 2:00 am GMT (Aug. 15)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
AUD/USD: 15-min
As mentioned above, concerns over China’s growth and the safety of some of its top real estate and financial firms inspired risk aversion earlier today.
Not a good look ahead of China’s data dump and the RBA’s meeting minutes during tomorrow’s Asian session trading.
There aren’t a lot of top-tier reports scheduled in the European and U.S. sessions today, so forex price action will likely move to risk sentiment’s tune.
I’m keeping my eyes on AUD/USD, which has reached a 50% Fibonacci retracement after dipping to fresh August lows earlier today.
AUD/USD’s current prices are also around the 15-minute chart’s 100 SMA as well as a previous area of interest on the chart.
The cherry on top is Stochastic showing an “overbought” signal on the chart.
Concerns over China’s growth, confirmation of the RBA’s lack of hawkishness, or overall risk aversion could drag AUD/USD back to its previous lows near .6450.
On the other hand, optimism for a soft landing in the U.S. could push AUD/USD to higher inflection points like the Pivot Point line or the 200 SMA before the pair sees sustained bearish pressure.
