The Australian dollar rose slightly after the RBA delivered its final interest rate decision of the year. The bank left interest rates at zero and announced that it would continue with its asset purchases to support the economy. Members also hinted that they will not hike interest rates any time soon. The Aussie also reacted to the impressive manufacturing data from China. Data from Caixin and Markit showed that the manufacturing PMI rose to 54.9 in November, the ninth consecutive monthly gain.
The Japanese yen was little changed during the Asian session after the better-than-expected manufacturing PMI data. According to Markit, the PMI increased from 48.3 in October to 49.0 in November. While the reading was below the expansion zone of 50, it was also the best it has been in months. It is further evidence that the Japanese economy is doing relatively well. According to the report, most businesses reported better demand for their goods, employed more people, and sounded more optimistic about the future.
Looking ahead, the economic calendar will have several important events today. The most important will be the final manufacturing PMI from around the world. This data will provide clues about the state of the world economy. Analysts expect that countries like Germany, Norway, and the US will release strong manufacturing data. From Europe, we will receive the preliminary inflation data for November. From Canada, the statistics office will release the third-quarter GDP data while in the United States, we will receive a statement by Jerome Powell.
EUR/USD
The EUR/USD pair fell to an intraday low of 1.1922 during the American session. It then bounced back to the current level of 1.1957. On the four-hour chart, the pair has moved back above the 25-day moving averages. It has also moved above the middle line of the Bollinger bands. The RSI has also started rising after dropping sharply in overnight trading. The outlook for the pair is neutral today. A move above the psychological level of 1.1970 will be a sign that bulls have returned, which will be bullish. Also, a move below yesterday’s low of 1.1922 will mean that there are still sellers out there.
AUD/USD
Like the EUR/USD, the AUD/USD pair dropped to a low of 0.7335 during the American session and then bounced back. That price was at the lower side of the ascending channel shown in yellow. The price has also moved above the variable index dynamic average. The accumulation and distribution indicator continues to rise, which is a sign that the price may continue rising, with the next target being the upper side of the channel at 0.7400.
USD/JPY
The USD/JPY pair is trading at 104.35. On the hourly chart, this price is higher than last week’s low of 103.83. It has also moved above the 25-day and 15-day moving averages. The price also seems to be forming a bullish pennant flag that is shown in yellow. The Relative Vigour Index (RVI) has also started moving lower. While the pair will likely remain at the current range today, there is also a possibility of a bullish breakout in the near term.
