AUD/USD Talking Points:
- The Australian Dollar has been mired in a sell-off for some time now, setting fresh decade-lows in early-August around the .6700 handle.
- An early-September retracement soon ran into resistance and sellers have come back over the past week. This keeps the pair as one of the more attractive long-USD scenarios ahead of the Q4 open.
- DailyFX Forecasts are published on a variety of markets such as Gold, the US Dollar or the Euro and are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.
The late-Q3 impasse in the US Dollar continues to hold as the Greenback remains in a range despite a number of big drivers showing over the last couple of weeks. The European Central Bank rate decision and announcement of stimulus was unable to do it, as was the FOMC rate cut last week, and USD price action continues to trade within a rather tight band just underneath the fresh two-year-highs that were created earlier this month.
Next quarter looks to be particularly interesting: Will we have a repeat of the 2018 Q4 risk aversion theme, where US equities dipped by as much as 20% ahead of the Christmas holiday? Or, will the Fed take on a softer tone, helping to provide a boost of support across global markets? Given the two rate cuts that we’ve already had that answer might seem simple but, at this point, the FOMC hasn’t yet tipped their hand, which is likely leading into the build of this range ahead of the Q4 open.
Despite this seeming lack of near-term direction, the US Dollar has shown a rather clear recent trend against the Australian Dollar, threatening to push the pair further down for a test of the fresh decade lows that were set in early-August trade.
US Dollar Four-Hour Price Chart
Chart prepared by James Stanley; US Dollar on Tradingview
AUD/USD Down-Trend Back in-Play, Can Sellers Take-Out .6700?
Heading into Q4, AUD/USD remains attractive for long-USD scenarios. The pair has been in varying forms of sell-off since January of 2018, and that theme hastened throughout this summer as Aussie sellers pushed AUD/USD down to fresh decade-lows. But it was around the .6700 level that bears met their match, and after considerable gyration near support in August, the pair showed a flicker of strength in early-September.
AUD/USD Weekly Price Chart
Chart prepared by James Stanley; AUDUSD on Tradingview
As looked at in the webinar two weeks ago, that retracement ran into resistance just inside of the .6900-handle; and sellers soon re-entered the picture as denoted by an aggressive sell-off last week that brought prices to support around .6760, which remains in-play ahead of the Q4 open.
If USD-strength is going to stick around next quarter, the short-side of AUD/USD remains as attractive, looking for those fresh decade lows that were set in August to come under fire. This will likely keep the pair as one of the more attractive long-USD venues until something changes.
AUD/USD Four-Hour Price Chart
Chart prepared by James Stanley; AUDUSD on Tradingview
To read more:
Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on Gold or USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.
Forex Trading Resources
DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.
If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.
--- Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX
