News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Wall Street Futures Update: Dow Jones (+0.27%) S&P 500 (+0.18%) Nasdaq 100 (+0.06%) [delayed] -BBG
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here: https://t.co/yOEvLjKnct https://t.co/nD75SqMrxd
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 88.66%, while traders in France 40 are at opposite extremes with 79.92%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/0X721EyXki
  • Gold Prices at 3-Month High Amid USD Weakness after Big NFP Miss https://www.dailyfx.com/forex/market_alert/2021/05/10/Gold-Prices-at-3-Month-High-amid-USD-Weakness-after-Big-NFP-Miss.html https://t.co/ZlsBKlFOw6
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.23% 🇦🇺AUD: 0.02% 🇨🇦CAD: -0.02% 🇨🇭CHF: -0.08% 🇳🇿NZD: -0.09% 🇯🇵JPY: -0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/pzMXnTquKf
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: France 40: 0.36% FTSE 100: 0.33% Germany 30: 0.28% Wall Street: 0.27% US 500: 0.20% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/d3nVIzPniI
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/ApsjkNfGMO
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.63% Silver: 0.61% Gold: 0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/nO754swCBo
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.30% 🇦🇺AUD: 0.07% 🇨🇦CAD: 0.00% 🇪🇺EUR: -0.05% 🇨🇭CHF: -0.09% 🇯🇵JPY: -0.24% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/rdSUCcdssH
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 88.56%, while traders in France 40 are at opposite extremes with 80.47%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/85hvnrXx2Y
Australian Dollar Market Will Be Fed Focused, But Watch Aussie CPI

Australian Dollar Market Will Be Fed Focused, But Watch Aussie CPI

David Cottle, Analyst
AUDUSD 2-Hour Price Chart

Fundamental Australian Dollar Forecast: Bullish

  • The Australian Dollar has risen into the coming week’s US interest rate decision
  • It has held those gains despite a lack of clarity on either US/China trade or Brexit
  • Assuming the Fed delivers they should hold a little longer yet

Find out what retail foreign exchange traders make of the Australian Dollar’s prospects right now, in real time, at the DailyFX Sentiment Page

The Australian Dollar will like all other tradeable assets be focused on the United States in the coming week. The US Federal Reserve will give its next monetary policy decision on October 31.

Like most pro-cyclical units, the Aussie has risen into this event. With the Fed long seen as all-but certain to cut interest rates there’s reason in that. The currency also got some support this month from hopes of progress in both the US/China trade story and the tortured saga of Brexit.

However, it has since become clear that neither tale is anywhere near resolution. Nevertheless AUD/USD remains very close to its October highs suggesting that the prognosis for lower US interest rates was always its primary driver.

AUD/USD Daily Price Chart

Daily AUDUSD Price Chart

It may be primary, but it won’t be alone. Wednesday will bring markets their first look at official Australian consumer price inflation data for the third quarter. The annualized growth rate is expected to remain subdued at 1.6%, well below the 2% lower band of the Reserve Bank of Australia’s target area.

Aussie Inflation Should Remain Weak, But Central Bankers Expect This

However, the RBA has expected this outcome for quite some time and, should it be delivered, it’s doubtful that expectations of Australian interest rate policy will change much. Clearly a significant undershoot would increase rate-cut bets and, in all probability, weaken the currency, so be on careful watch for that.

RBA Governor Philip Lowe is due to speak on Tuesday. This will only be a day before that crucial CPI release and, as such, he may not give much away. Markets may be tempted to interpret anything he says as a steer on the data, and central bankers tend to avoid being accused of that if they can.

Still, all up this week is likely to be at least comforting for risk appetite, assuming the Fed plays ball and doesn’t sound too opposed to further monetary largesse. If Australian inflation doesn’t collapse (and it’s not expected to) the Aussie should at least be supported by this.

Headlines around trade or Brexit will retain the potential to derail optimistic market bets, but they are very hard to predict. On the basis of what we can know, it’s a cautiously bullish call.

The longer-term backdrop for AUD/USD, at least, remains quite bearish, however, with the long downtrend from late 2018 under no serious threat.

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

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

DISCLOSURES