Risk Sentiment Deteriorates Further, AUD Reacts Little to RBA Minutes

Risk Appetite Continues to Fade Amid Global Growth Worries

The dollar traded lower against most of the other G10 currencies on Monday. It outperformed only NOK and CAD, which may have come under pressure due to the slide in oil prices. The main gainers against the greenback were NZD, JPY and CHF in that order, with NZD rallying after New Zealand’s ANZ business confidence index for December rose to -24.1 from -37.1 in November. This means that only a net 24.1% of companies expect business conditions to deteriorate in the coming 12 months compared to 37.1% previously.

Nasdaq 100 — Technical Outlook

Once again, the Nasdaq 100, together with the other equity markets, has sold off yesterday. Looking at the daily chart of the Nasdaq 100 cash index, we can see that last night, the technology index found good support near the 6393.75 level, which is the year’s opening price. Given that the S&P 500 and the Dow Jones Industrial Average are already deeply in the red for the year, Nasdaq 100 in a way, is the last hope for the bulls. But if the sellers are here to stay for a little longer, then further declines could be possible. Even though we could see some recovery, still, that could be short-lived, and the index might sell off again.

Aussie Stays Unphased After RBA Minutes

Although the Australian dollar gained somewhat against its US counterpart, it was among the main losers following the opening yesterday, perhaps dragged lower by the negative market sentiment.

AUD/JPY — Technical Outlook

With the current risk-off mood in the markets, AUD/JPY continues to travel south for the winter. The pair has now broken the short-term tentative upside support line, drawn from the low of the 26thof October. For now, looking at the 4-hour chart, it seems there could be more downside, at least in the short run.

As for Today’s Events

During the European day, we get the German Ifo survey for December. Expectations are for both the current assessment and business expectations indices to have declined to 104.9 and 98.3 from 105.4 and 98.7 respectively, which would drag the business climate index down to 101.8 from 102.0. That said, having in mind the ZEW results, which showed that the current conditions index fell, but the economic sentiment one rose, we see the risks surrounding the Ifo business expectations index as tilted somewhat to the upside.

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