Market Analysis – USD surges, AUD hit by RBA, Oil and Gold continue decline

USD was bid in Tuesdays session with DXY finding strong support at its 200 Day MA and pushing up to test the big 104 figure before losing steam. DXY did have a sharp dip on big miss in the JOLTS employment data though a strong ISM Services PMI figure offset that and saw DXY rally for the rest of the session. Interestingly yields didn’t recover the same way, with the US 10-Year yield falling to 3-month lows showing the USD strength was more of a technical pullback from oversold levels and haven flows on a choppy equity market.

AUD was buffeted by a strong USD and fallout from the RBA rate decision. The central bank kept rates on hold as expected but the accompanying statement lacked the hawkish messaging that AUD bulls were looking for. AUDUSD pushing decisively below its 200-day MA support level and printing a low of 0.6545. The previous range top of 0.65 will be the key level to watch to the downside coming into today’s Aussie GDP report.

Gold continued its steep decline after setting all-time highs on Monday. XAUUSD attempted an Asian session rally but reversed course as the US came online breaking lower to test the 2009 resistance/support level. USD and a technical pullback from extreme overbought conditions seemingly the main driver of the precious metal. Gold traders will be watching if the previous established resistance level at 2009 now switches to support.

Crude oil declined for a 4^th straight session on USD strength an inventory builds and concerns the “voluntary” nature of the recently announced OPEC+ production cuts may not happen. There was an initial move higher after a Russian press report of comments from Deputy PM Novak saying Russia intends to fully fulfil its obligations to voluntarily reduce oil output as early as January. The initial pop didn’t last though and crude trended lower for the rest of the session hitting 5-month lows.