Author: Mr. Amar – Technical Analyst
The Australian Industry Group Australian Performance of Services Index (Australian PSI) rose by 6.6 points to 56.2 over the summer holiday period, indicating an improvement in conditions compared to November 2021 and delivering the index’s highest monthly result since June 2021. According to the Chief of employer association, Willox, the rebound in performance following a slump in the months affected by the Delta outbreaks in the southeast corner of the country points to partial recovery from the September quarter fall in GDP. It points also to considerable resilience and continuing difficulties as the sector transitions to living with COVID while confronting staff shortages and supply chain disruptions.
Last week’s NFP showed how AUD/USD fell after data showed the world’s largest economy created far more jobs than expected, raising the chances of a larger Federal Reserve interest rate increase at the March policy meeting. As a consequence, the AUD reversed half the week’s gains on the data that drove a surge in yields. The US dollar moved its way up the 95 areas as measured by the DXY index, crippling the Aussie that fell 0.88% vs the greenback by the close of play.
It was stated that the bears were in anticipation of a Doji closely followed by a Bearish Engulfing. While it did not come in the previous daily close, it finally came nonetheless and confirms the bearish bias for the week ahead. Bar potential mitigation of the markdown and the imbalance thereof, a break of 0.7050 and then 0.7030 would be the eyed area. This could occur in the opening sessions as local rates market play catch up to the US Treasury yields that surged to new cyclical highs after the surprisingly strong Nonfarm Payrolls data.