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
Bullish
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
Wall Street
Bullish
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
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/cXImPrjl8x
  • Crude Oil Forecast: Oil Prices Edge Lower Toward Trend Support -via @DailyFX WTI #CrudeOil closed the week slightly higher on balance, but the commodity is struggling at resistance as bears look to challenge trend support. Link to Full Analysis: https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2021/05/08/crude-oil-forecast-oil-prices-edge-lower-toward-trend-support.html #OOTT https://t.co/MvtP36QxY8
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/3f5sLijsVB
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/PO93mIKAZP
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/CHE6IOq3K5
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/Agl1q6EQyu
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/G58J1dg6y3 https://t.co/UmubxiDXGc
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/e4G1gTGhex
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/pS48NIuwqX
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/arxYmtQeUn https://t.co/gFVVZTGbe1
Australian Dollar Rides High on Trade Hopes But Watch Geopolitics

Australian Dollar Rides High on Trade Hopes But Watch Geopolitics

David Cottle, Analyst
AUDUSD Daily Chart

Fundamental Australian Dollar Forecast: Neutral

  • AUDUSD gains have accelerated sharply on trade deal hopes
  • That underpinning will probably hold on into January
  • However potential for further US military involvement in Iraq is now a wildcard

The Australian Dollar has been on a tear since early October, and its gains only accelerated as 2019 bowed out, can they hang on and even go further in a new year?

Well, much of them have come as markets became more optimistic that China and the US could sign at least an interim trade deal. That is apparently still on the cards with January 15 penciled in as the signing date. However, that deal itself will probably amount to no more than a truce in the war of tit-for-tat tariff impositions which dominated much of 2019. This alone is unlikely to justify the surge in risk appetite which has boosted pro-cyclical assets from global equity to commodity currencies.

Much will probably depend on the level of goodwill shown at the signing for a move on to a more ambitious, phase-two deal.

Not all the Australian Dollar’s underpinnings are international. The domestic economy remains quite buoyant by some measures, notably by its record of job creation. The Australian labor market continues to defy expectations of a rollover with November’s numbers showing a strong return to form.

Australia’s Monetary Policy Path Looks Less Sure

Futures markets seem less certain than they were as a result that still-lower Australian interest rates are coming. However, inflation remains stickily low and some of the major Australian lenders still think that both lower rates and, possibly, quantitative easing, will be needed in due course. Clearly someone is going to be wrong here, but evidence to support either case won’t come this month.

Another unknown is the Reserve Bank of Australia’s attitude to current rampant Aussie strength. It probably doesn’t care for it much. When you’re trying to get inflation up, a strong currency makes imports cheaper and acts as a drag. Still, the RBA is unlikely to fight the market meaningfully.

Still, we won’t hear from it in the coming week, with no speeches or major RBA events on the calendar. Indeed, must wait until February for the first monetary policy decision of 2020. This promises to be a fascinating year for the Australian Dollar, but the market needs more data and it may take time to take off.

For now, trade drives and the currency is unlikely to fall far while the US and China are still talking. That said, the past two weeks’ rise has been sharp, and a little consolidation seems likely even if the overall AUDUSD uptrend looks safe enough.

Middle Eastern geopolitics have returned to haunt markets as the US strikes against Iranian-backed militias in Iraq and Syria. Intensification of conflict here could see a rapid move back into counter-cyclical assets like the Yen, at the expense of growth correlated assets like equity and the Australian Dollar.

AUDUSD Daily Chart

Australian Dollar 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