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
Mixed
GBP/USD
Bullish
USD/JPY
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
Gold
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
Oil - US Crude
Bullish
Bitcoin
Mixed
More View more
Real Time News
  • 🇯🇵 JPY Industrial Production (YoY) (DEC F), Actual: -0.4% Expected: N/A Previous: -3.0% https://www.dailyfx.com/economic-calendar#2020-02-17
  • The US Dollar gained versus SGD and IDR despite a “risk-on” tone in markets, boosted by strong declines in the Euro. What is the week ahead for $USDSGD, $USDIDR, $USDPHP and $USDMYR? #USD #ASEAN #Euro - https://www.dailyfx.com/forex/fundamental/article/special_report/2020/02/17/US-Dollar-USDSGD-USDIDR-May-Rise-on-FOMC-Minutes-and-Repos.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/YMkZ4WhG0A
  • Heads Up:🇯🇵 JPY Industrial Production (YoY) (DEC F) due at 04:30 GMT (15min), Actual: N/A Expected: N/A Previous: -3.0% https://www.dailyfx.com/economic-calendar#2020-02-17
  • Commodities Update: As of 03:00, these are your best and worst performers based on the London trading schedule: Silver: 0.63% Oil - US Crude: -0.02% Gold: -0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/oNEkMGVhyX
  • Forex Update: As of 03:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.17% 🇨🇦CAD: 0.11% 🇪🇺EUR: 0.07% 🇳🇿NZD: -0.01% 🇨🇭CHF: -0.03% 🇯🇵JPY: -0.04% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/6TDJo3StbI
  • LIVE NOW: Join DailyFX Senior Strategist @IlyaSpivak LIVE as he discusses the outlook for the financial markets in the week ahead! https://www.dailyfx.com/webinars/889679267
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.27%, while traders in Germany 30 are at opposite extremes with 84.48%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Hp25WV8QCx
  • LIVE IN 30 MIN: Join DailyFX Senior Strategist @IlyaSpivak LIVE as he discusses the outlook for the financial markets in the week ahead! https://www.dailyfx.com/webinars/889679267
  • #NOK, #AUD and #SEK are expected to be the most active G10 currencies vs USD with 1-week implied volatility at 7.35, 7.76 and 6.72, respectively
  • Tune in to @IlyaSpivak 's #webinar at 10:00 PM ET/3:00 AM GMT for insight on the cross market weekly outlook. Register here: https://t.co/E213bTtq5C https://t.co/Mh5NxU5BsU
USD Searches For Support, Aussie Outlook Remains Bearish

USD Searches For Support, Aussie Outlook Remains Bearish

2011-10-10 16:46:00
David Song, Currency Strategist
Share:

DJ FXCM Dollar Index

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

9829.32

9961.46

9826.5

-1.40

145.30%

USD_Searches_For_Support_Aussie_Outlook_Remains_Bearish_body_ScreenShot003.png, USD Searches For Support, Aussie Outlook Remains Bearish

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is down 1.40% on the day after moving 145% of its average true range, and the greenback may continue to retrace the rally carried over from the previous month as risk trends continue to dictate price action in the foreign exchange market. However, as the 30-minute relative strength index trades bounces back from a low of 23, we may see the greenback regain its footing over the next 24-hours of trading, and a short-term correction may pan out in the days ahead once the oscillator crosses back above 30. As the Federal Open Market committee is scheduled to release its policy meeting minutes later this week, we may see the USD consolidate going into the middle of the week, and comments from the FOMC is likely to move the market as investors weigh the prospects for future policy.

USD_Searches_For_Support_Aussie_Outlook_Remains_Bearish_body_ScreenShot004.png, USD Searches For Support, Aussie Outlook Remains Bearish

Indeed, the dollar index appears to have found short-term support around the 50.0% Fibonacci retracement ( 9,828), and the greenback may face range-bound price action ahead of the FOMC meeting minutes as the central bank maintains a cautious outlook for the world’s largest economy. As the Fed employs ‘Operation Twist’ in an effort to stem the downside risks for the region, the policy statement may highlight an increased willingness to carry the easing cycle into the following year, and the central bank may keep the door open to conduct another round on quantitative easing as the region faces an increased risk of a double-dip recession. As we expect the Fed to maintain a wary outlook for the region, dovish comments from the central bank may impede on investor confidence, and a flight to safety may resurface as the prospects for global growth deteriorates. In turn, we may see the index work its way back towards the 61.8% Fib around 9,947, and the greenback may extend the rally carried over from the previous month as it continues to benefit from safe-haven flows.

USD_Searches_For_Support_Aussie_Outlook_Remains_Bearish_body_ScreenShot005.png, USD Searches For Support, Aussie Outlook Remains Bearish

All four components advanced against the dollar on Monday, led by a 2.44% advance in the Australian dollar, and the AUD/USD may continue to retrace the sharp decline from the previous month as market participants increase their appetite for risk. However, as the Reserve Bank of Australia shows an increased willingness to scale back the benchmark interest rate from 4.75%, speculation for lower borrowing costs continue to cast a bearish outlook for the aussie-dollar, and the relief rally may taper off ahead of the next rate decision scheduled for the 31st as investors see a growing risk of a rate cut. According to Credit Suisse overnight index swaps, market participants are fully pricing a 25bp rate hike for later this month, while borrowing costs are expected to fall by nearly 150bp over the 12-months as the isle-region faces a slowing recovery. As interest rate expectations deteriorate, the near-term outlook remains bearish, and the exchange rate should continue to trend lower over the remainder of the year as the fundamental outlook for the world economy weakens.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Join us to discuss the outlook for the major currencies on the DailyFX Forums

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

DISCLOSURES

News & Analysis at your fingertips.