We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides Download
EUR/USD
Bullish
GBP/USD
Bearish
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Bullish
More View more
Real Time News
  • The $AUD may be poised to test below the 0.65 level after sinking to set another 11-year low against its US counterpart. Get your AUD/USD technical analysis from @IlyaSpivak here: https://t.co/JzmELM5JDW https://t.co/5peHgq0WbT
  • RT @FactSet: Analysts have lowered Q1 EPS estimates for $SPX by 3.3% over the first 2 months of the quarter, which is larger than the 5-yea…
  • Second coronavirus case of unknown origin has been confirmed in California -Washington Post
  • An equally-weighted Yen Index I update suffered its biggest single-day drop (Yen surge) since May 17, 2017 on Friday $USDJPY, $EURJPY, $GBPJPY, etc https://t.co/igz5XGvdmR
  • S&P 500 this week: Monday: -3.35% Tuesday: -3.03% Wednesday: -0.38% Thursday: -4.42% Friday: -0.82% $SPX $SPY
  • Net speculative futures positioning in gold eased off record high net long interest this past week through Thursday, but not by much $GC_F $XAUUSD https://t.co/SwcjiCDTnj
  • US advises people to reconsider travel to Italy over virus - BBG
  • The 10-Year US Treasury (here yield) and net speculative futures positioning are diverging even further https://t.co/qxUXGMv52w
  • The #Dow Jones has taken out various technical levels of historical significance The S&P 500 sank to 2,875 which marks the January 2018 high. Get your #equities market update from @PeterHanksFX here: https://t.co/LSSzQiMpVr https://t.co/PTaEOZhQM8
  • The COT net speculative futures positioning data is out. Remember, it reads positioning up until Tuesday. With the gap down in markets Monday, $VIX shot higher and the net short in futures was nearly halved. Going to guess that shifted further through the week https://t.co/iIPQ7f1FhU
Australian Dollar Outlook: AUD/USD & AUD/JPY Eye RBA Meeting

Australian Dollar Outlook: AUD/USD & AUD/JPY Eye RBA Meeting

2019-08-27 21:55:00
Rich Dvorak, Junior Analyst
Share:

AUSTRALIAN DOLLAR PRICE SET TO SWING AHEAD OF SEPTEMBER RBA MEETING

  • AUDUSD and AUDJPY remain bogged down by broad-based risk aversion in light of lingering trade war uncertainty and elevated recession fears
  • The Australian Dollar will likely gyrate within its August trading range as forex traders await the September RBA meeting a week away
  • Sharpen your skills as a forex trader with this free educational guide on Building Confidence in Trading

The September RBA meeting is officially 1-week away and brings the Australian Dollar back in the spotlight. AUDUSD and AUDJPY both plunged to multi-year lows earlier this month driven largely by forex traders fleeing risk and flocking to safety amid rising recession fears and US-China trade war uncertainty. Looking forward, Australian Dollar price action ahead of the September RBA meeting could foreshadow where AUDUSD and AUDJPY may head next.

RESERVE BANK OF AUSTRALIA INTEREST RATE CUT PROBABILITY (SEPTEMBER 2019)

RBA Reserve Bank of Australia Interest Rate Cut Expectations

RBA monetary policy expectations have been quite volatile over the last several months as Australia’s central bank tiptoes around daunting downside risks to its economy stemming from the US-China trade war. At the same time, Australian economic data has held up quite solidly – like the latest Australian jobs numbers – and has provided the RBA with a bit of flexibility on monetary policy decisions.

That said, overnight swaps are currently pricing an 87.8% probability that the RBA leaves rates unchanged at the central bank’s next interest rate decision but placing the odds of another RBA rate cut by year-end at 88.0%. A surprise RBA interest rate cut stands to send the Australian Dollar plunging, but this scenario is not likely considering recent commentary from RBA Governor Lowe who hinted at the limitations of monetary policy at the Jackson Hole Economic Symposium last weekend.

AUSTRALIAN DOLLAR 25D RISK REVERSALS (1-WEEK)

Australian Dollar Risk Reversals

Nevertheless, the currency market’s bias remains tilted to the downside judging by the 1-week risk reversal metrics for AUDUSD and AUDJPY. Yet, the recent influx of market risk appetite following the supposed trade war de-escalation could be contributing to the marginal bump in Australian Dollar risk reversals measures.

AUDUSD PRICE CHART: DAILY TIME FRAME (APRIL 01, 2019 TO AUGUST 27, 2019)

AUDUSD Price Chart Technical Analysis

Spot AUDUSD is expected to trade between 0.6691-0.6815 with a 68% statistical probability as calculated using the currency pair’s 1-week implied volatility reading of 7.82%. The 1-standard deviation option implied trading range just so happens to measure up closely with spot AUDUSD’s year-to-date low and 23.6% Fibonacci retracement of its April swing high, which reiterates the major confluence levels as technical support and resistance. We have previously highlighted resistance posed by the 0.6800 handle in our most recent AUDUSD price outlook where we stated that the Australian Dollar could be primed for a breakdown – a view we still hold which may materialize on dovish commentary revealed during the September RBA meeting.

AUDJPY PRICE CHART: DAILY TIME FRAME (APRIL 01, 2019 TO AUGUST 27, 2019)

AUDJPY Price Chart Technical Analysis

Judging by AUDJPY’s 1-week implied volatility reading of 12.56%, the currency pair is estimated to trade between 70.343-72.443 with a 68% statistical probability. The technical backdrop of AUDJPY is quite similar to that of AUDUSD. Spot AUDJPY has also struggled due to major technical resistance around the 72.000 handle which has served as a major headwind for Australian Dollar bulls.

-- Written by Rich Dvorak, Junior Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.