The plummets of the global stock market have wiped out this year's profits from Wall Street, and the falls in Asia are not slowing down. But the currency market is still relatively calm. We see a slight rebound after yesterday's USD appreciation.
The SP500 index fell by 3.09% wiping out this year's profits. Nasdaq crashed by 4.63%, which first looks like a spiral of negative sentiment, but there is no shortage of real reasons: high valuations, passing the top in the dynamics of revenues, higher interest rates and fears about the effects of the US-China trade war. In Asia, you can see a continuation of declines with the Japanese Nikkei225 down 3.5%; in Shanghai Composite loses 1.6%
The situation on the FX market remains more controlled, which, however, is more evidence of low investor involvement than a sign of calm recovery. USD / JPY does not move away from 112 (despite the collapse of the Tokyo Stock Exchange), EUR / USD returned over 1.14.
On Thursday, the 25th of October, the event of the day is the ECB Interest Rate Decision and the following ECB Press Conference with Mario Draghi. The other events that the global investors should keep an eye on are German Ifo data, Durable Goods Orders data from the US, Unemployment Claims and Continuing Claims data from the US as well.
AUD/USD analysis for 25/10/2018:
Australia's rating remains at the highest level since 2002. Fitch rating agency maintained its assessment and left a stable perspective. Analysts expect GDP growth at 3.3% in 2018. In the following years, there will be a slight slowdown in dynamics to 2.8% in 2019 and 2.7% in 2020.
The report says that "Australia's fiscal position has strengthened over the last year. It is driven by the cycle of higher revenues and the maintained level of expenditure in accordance with the strategy of repairing the country's budget. "The state budget as a whole will amount to around 1.2% of GDP at the end of the year. For comparison, a year earlier this result amounted to 1.9% of GDP.
Let's now take a look at the AUD/USD technical picture at the H4 time frame. The price has bounced for the third time from the level of 0.7055 and it moved towards the 61% Fibo at 0.7086 but failed to hit it so far. The RSI is slightly above its fifty level, but it might not last for long as the bears are now trying to push the price towards the level of 0.7067 where the nearest support is located. The trend remains down and to change the trend to the uptrend, the bulls would have to push the prices above the level of 0.7105.