Crude oil prices rose to new highs for consecutive months, with WTI up more than 2%. The risk-averse Australian Dollar suffered as a result of the shift in mood, while the US Dollar benefited. As investors shunned bonds the yields of treasury incurred a cross-curve jump, expecting rising oil prices to boost inflation bets and, by extension, the bets of the Federal Reserve rate hike.
If the negative sentiment continues throughout the daily trading session, the Australian Dollar may fall much more. China’s GDP figures, on the other hand, may provide a reprieve. On June 9th, China is expected to release its May trade balance. The country’s surplus is expected to increase from $51.12 billion to $58 billion, according to analysts. A lot of the newfound strength is attributed to a resurgence in exports. A better outcome may ease some concerns about a slowing economy.
Irrespective of the overall sentiment, Chinese technology equities could be a silver lining. Alibaba as well as other Chinese technology stocks with significant market caps jumped on June 8th after China’s gaming regulator authorized licenses for several video games, overturning the industry’s years-long pattern of increasing restrictions. In New York, Alibaba’s ADR, which is listed in the United States, closed over 15% up.
Overnight, the AUD/USD exchange rate plummeted to a new low for the month, dipping under the 50-day SMA. If prices continue to decline, there might be some support available from the 38.2 % Fib retracement, which is right just under the June low. The bulls will try to regain the 50-day SMA if this does not happen. The RSI and MACD indicators, on the other hand, are deteriorating.