Forexlive Asia-pacific FX news wrap 4 Dec The AUDUSD falls sharply after weaker GDP data.

• Key Contenders for Pentagon Leadership: Ernst, Hagerty, and DeSantis in the Spotlight
• ECBs Holzmann: 25 basis point cut is conceivable in December. not more
• The AUDUSD is running to the downside, but is now testing a key floor. What next?
• Bank of Korea: Will increase short term liquidity measures starting Wednesday
• China Caixin Services PMI for November 51.5 versus 52.4 estimate
• RBNZ Orr: Changes to capital rules will not increase competition among banks
• PBOC sets USD/ CNY mid-point today at 7.19346 (vs. exp 7.2821)
• Australia’s treasurer Chalmers: Today’s National accounts show positive but weak GDP
• Australia GDP Q3 0.3% versus 0.4% estimate
• Japan Composite PMI for November 50.1 versus 49.8 last month
• Reuters Poll: EURUSD unlikely to reach parity over the coming three month (24 of 42)
• Kickstart the trading day with a technical look at the EURUSD, USDJPY & GBPUSD
• Australia AIG manufacturing index for November -17.9 versus -19.7 last month
• Australia Composite PMI final 50.2 versus 49.4 preliminary.
• Crude oil inventories show build of 1.232 million barrels versus -0.671 million estimate
• Forexlive Americas FX news wrap: South Korean drama spices up markets

Markets:

• Gold up $3.96 or 0.15% at $70.09
• US 2-year yield 4.167%, -0.4 basis points
• US 10-year yield 4.226%, +0.5 basis points
• WTI crude oil up $0.19 or 0.27% at $70.09
• Nikkei 225 +26 points or 0.07% at 39276
• Shanghai composite -0.07%
• Hong Kongs Hang Seng +0.08%
• China CSI300 -0.21%
• So.Korea Kospi -1.92%

The US dollar is trading higher /mixed with dollars gain vs the AUD and NZD leading the way. The DXY dollar index is up 0.01%

• EUR, unchanged
• JPY +0.27%
• GBP, -0.04%
• CHF unchanged
• AUD +0.71%
• NZD +0.46%

The Australia GDP came in weaker than expectations at 0.3% vs 0.4% with household spending (which accounts for 1/2 of GDP, added 0 to growth in the quarter, leaving government spending to do all of the heavy lifting with a contribution of 0.6% to GDP.

That started selling in the AUDUSD and its shadow, the NZDUSD. China Caixin Services PMI also came in weaker than expected which also helped to contribute some to the declines.

Technically the AUDUSD fell from a closing level near 0.6481 to a low of 0.6407. The move took the price below swing lows from the month of November between 0.6433 and 0.64419. The high of that level was tested on Monday before bouncing higher into resistance near the 100 bar MA on the 4-hour chart.

The price of the AUDUSD has rebounded higher into the November lows, trading between the high and low of the area at 0.6433 to 0.64419 as I type. Will the sellers show up here and rotate back to the downside? It is the key test after the break lower.

The NZDUSD was the 2nd largest mover in the session with it moving from resistance near the 100-hour MA (near 0.5882) down to a low of 0.5830. Technically,the move in addition to staying under the 100-hour MA, broke below a swing area between 0.5859 and 0.58667. That area will be close risk for sellers into the European session.

The EURUSD tried to move lower after closing near its 200-hour MA at 1.0507. The low reached down to 1.0487 before buncing back to the unchanged level on the day and also the 200-hour MA. What will be key on more upside is if the 100-hour MA can hold the rally once again. The last three tests of the MA line yesterday and on Monday, the sellers leaned and put a lid on the pair. The 100-hour MA comes in at 1.05299 currently and moving lower.

In the session, ECB’s Holzmann stated that a 25 basis point rate cut is possible in December, but nothing more than that is likely. He emphasized that no decisions on the next rate move have been made, as they will depend on the data available at the December meeting. Holzmann also remarked that U.S. President elect Trump is influencing inflation forecasts in Europe, likely contributing to increased inflation expectations.

The private crude oil inventory data was released showing a surprise build of 1.232M vs an expected drawdown of -0.671M. The EIA weekly data will be released tomorrow at 10:30 AM ET.

The European and the US session will have a slew of data released:

• 3:15am – EUR – Spanish Services PMI, Est 53.4

• 3:45am – EUR – Italian Services PMI, Est 50.9

• 3:50am – EUR – French Final Services PMI, Est 45.7

• 3:55am – EUR – German Final Services PMI, Est 49.4

• 4:00am – EUR – Final Services PMI Est 49.2

• 4:30am – GBP – BOE Gov Bailey Speaks

• 5:00am – EUR – PPI m/m, Est 0.4%

• 8:15am – USD – ADP Non-Farm Employment Change, Est 152K

• 8:30am – CAD – Labor Productivity q/q, -0.2%

• 8:45am – EUR – ECB President Lagarde Speaks

• 8:45am – FOMC voting member Musalen speaks

• 9:45am – USD – Final S&P Global Services PMI, Est 57.0

• 10:00am – USD – ISM Services PMI, Est 55.7

• 10:00am – Factory Orders MoM, Est 0.2%

• 10:30am – USD – Crude Oil Inventories

• 1:45 PM – Fed Chair Powell speaks

• 2:00 PM – Fed’s Beige Book

Good fortune with your trading.

This article was written by ForexLive at www.forexlive.com.