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
EUR/USD
Bearish
GBP/USD
Mixed
USD/JPY
Bullish
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • #USDCHF pivot points (daily) – S3: 0.9798, S2: 0.9858, S1: 0.9894, R1: 0.9953, R2: 0.9976, R3: 1.0036 - https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Silver, Gold, and $EURUSD thoughts from today's webinar - https://www.dailyfx.com/forex/video/live_events/2019/09/16/silver-gold-eurusd-forecast-JWweb-116.html
  • $EURUSD: Prices soon ripped-higher until resistance showed at a confluent area on the chart, as taken from the prior swing-low at 1.1109 that ran into a bearish trendline projection. Get your technical analysis from @JStanleyFX here: https://t.co/KlnCP4dpQ9 https://t.co/vu8AvJFvfa
  • 🇯🇵 JPY Trade Balance (AUG), Actual: N/A Expected: -¥346.3b Previous: -¥249.6b https://www.dailyfx.com/economic-calendar#2019-09-17
  • With increasing volatility in weather patterns, how might storms, hurricanes and floods rattle the supply chain for petroleum-based products and impact crude #oil prices? Find out from @ZabelinDimitri here: https://t.co/e91RRyBQ3z https://t.co/QJdJu2lNHf
  • The market for negative-yielding bonds has exploded in 2019 to a whopping $14 trillion against the backdrop of deteriorating global growth prospects https://t.co/kHqdF1ExbM
  • $ES_F $TNX https://t.co/AebApRQmlQ
  • 🛢 #CrudeOil and volatility analysis following Monday’s surge in petrol prices - via @DailyFX ➡️ Link: https://www.dailyfx.com/forex/technical/home/analysis/usoil/2019/09/16/crude-oil-price-spike-to-drag-volatility-higher-stocks-lower.html $USO $OVX #WTI #OOTT https://t.co/KiYJD4tTFN
  • How can traders avoid #FOMOintrading? Start by implementing a well-heeled plan taking only four hours per week. Get your insight from @JStanleyFX here: https://t.co/zXJ0j1YeAn https://t.co/xsAlM3Cqon
  • 🇳🇿 NZD Current Account Gross Domestic Product Ratio YTD (2Q), Actual: N/A Expected: -3.3% Previous: -3.6% https://www.dailyfx.com/economic-calendar#2019-09-17
AUD To Continue Consolidation With Void Of Local Data On Tap

AUD To Continue Consolidation With Void Of Local Data On Tap

2014-07-25 01:31:00
David de Ferranti, Currency Analyst
Share:

Please add a description for the image.

Fundamental Forecast for Australian Dollar: Neutral

  • AUD Set For Another Flat Finish Despite Plenty Of Intraday Volatility
  • Light Economic Docket May Do Little To Shift RBA Policy Bets
  • Low Vol. Environment Could Continue To Support Carry Demand

The Australian Dollar is set for a relatively flat finish after a turbulent week that yielded plenty of intraday volatility. An upside surprise to the Australian second quarter core CPI reading, and rise in headline inflation to the top of the RBA’s 2 to 3 percent target band, sent the currency soaring above the 94 US cent handle. Additional strength for the Aussie was found on the back of a bumper China PMI print, as well as an absence of ‘jawboning’ in a speech from RBA Governor Glenn Stevens. Ultimately, most of the gains proved short-lived, which may have reflected some hesitation from traders to push the currency into a region of noteworthy technical resistance.

Looking to the week ahead; Building Approvals and the Performance of Manufacturing Index figures represent the only medium-tier domestic economic data on the calendar. However, the leading indicators for the health of the local economy may do little to materially shift the rate outlook, meaning any reaction from the AUD may fail to find follow-through. Similarly, the Chinese manufacturing figures (also on tap) could generate another round of knee-jerk volatility on a surprise reading, yet likely hold do not hold the requisite power to leave a lasting impact on the currency.

Indeed, Stevens’ recent address reinforced the prospect of a ‘period of stability’ for the cash rate over the near-term. At this stage it appears unlikely the RBA will change its stance while it attempts to foster a rebalancing of the domestic economy.

Implied volatility remains near multi-year lows, suggesting traders continue to price in a relatively small probability of a major economic crisis occurring in the near-term. Traders are seemingly looking past the latest flare-up in geopolitical tensions and have returned to the hunt for yield. Against this backdrop the Aussie’s relative interest rate advantage remains a source of strength for the currency, and could continue to keep it elevated. This leaves the major threat for the AUD/USD to stem from the US Dollar side of the equation given several key pieces of US event risk ahead. Refer to the US Dollar outlook for insights into how the reserve currency may perform over the coming week.

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

DISCLOSURES

News & Analysis at your fingertips.