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
EUR/USD
Mixed
Oil - US Crude
Bearish
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
Bearish
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Gold Forecast - via @DailyFX “Gold price outlook still hinges on stimulus deal expectations and corresponding swings in real yields.” What will I have my eyes on in the week ahead? Link to Analysis: https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2020/10/23/gold-forecast-xau-usd-at-the-mercy-of-a-fiscal-stimulus-deal.html $GC_F $XAUUSD $GLD https://t.co/GWEI4d4mMu
  • 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/5uSWKoLkd6 https://t.co/rxswe1gVL0
  • Talks between the EU and UK restarted today and will continue over the weekend as negotiators from both sides battle against the clock. Get your #currencies update from @nickcawley1 here: https://t.co/ER8IT1yxYO https://t.co/Jeeu2P9mwB
  • The London trading session accounts for around 35% of total average forex turnover*, the largest amount relative to its peers. The London forex session overlaps with the New York session. Learn about trading the London forex session here: https://t.co/UTWxbnNz7M https://t.co/W9awqb818J
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/lucvsACxu5
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/UVvf51HiVP https://t.co/yywnE39MLU
  • The US Dollar is losing ground against ASEAN FX, with USD/SGD and USD/IDR possibly readying to extend declines. Will USD/PHP and USD/MYR follow? Find out from @ddubrovskyFX here: https://t.co/l705RWumj5 https://t.co/jBbMKYp0F5
  • There are many different types of forex orders, which traders use to manage their trades. While these may vary between different brokers, there tends to be several basic FX order types all brokers accept. Learn about different FX order types here: https://t.co/lIJdiz4xSz https://t.co/YUhC9cCDpy
  • The US Dollar has spent much of October giving back September’s gains. Is there any hope for change? Get your #currencies update from @JStanleyFX here: https://t.co/3EHa6PV5yH https://t.co/PrP9J2klJk
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/UalZ8cRSXB https://t.co/wDVd2QvcjO
USD Correction On Tap, Australian Dollar Testing For Support

USD Correction On Tap, Australian Dollar Testing For Support

2012-03-14 15:45:00
David Song, Strategist
Share:

DJ FXCM Dollar Index

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10068.01

10071.88

10004.38

0.50

114.10%

USD_Correction_On_Tap_Australian_Dollar_Testing_For_Support_body_ScreenShot014.png, USD Correction On Tap, Australian Dollar Testing For Support

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.50 percent higher from the open after the Fed curbed speculation for more quantitative easing, and the shift in the policy outlook should continue to prop up the greenback as the central bank takes note of the more robust recovery. Indeed, the less dovish remarks from the Federal Open Market Committee reinforces our bullish call for the dollar, and we should see the reserve currency continue to retrace the decline from the previous year as developments coming out of the U.S. keeps the Fed on the sidelines. However, as the index comes up against the upper bounds of the upward trending channel, we should see a small pullback before another move to the upside, and the dollar may consolidate in the coming days as market participation tends to thin ahead of weekend.

USD_Correction_On_Tap_Australian_Dollar_Testing_For_Support_body_ScreenShot015.png, USD Correction On Tap, Australian Dollar Testing For Support

As the USDOLLAR breaks out of the broad consolidation pattern carried over from the previous year, the index looks poised to make another run at the 78.6 percent Fibonacci retracement, but we will be keeping a close eye on the relative strength index as it approaches overbought territory. A move above 70 would strengthen our view for a run at the 78.6 percent Fib, but a pullback in the oscillator could foreshadow a near-term correction for the USD amid the marked appreciation in March. Nevertheless, we should see the FOMC continue to soften its dovish tone for monetary policy as growth and inflation picks up, and the committee may look to conclude its easing cycle in 2012 as central bank officials expect to see a stronger recovery this year. In turn, currency traders may turn increasingly bullish against the USD, and easing bets for QE3 is likely to dampen the correlation between the dollar and risk as the fundamental outlook for the world’s largest economy improves.

USD_Correction_On_Tap_Australian_Dollar_Testing_For_Support_body_ScreenShot016.png, USD Correction On Tap, Australian Dollar Testing For Support

All four components weakened against the greenback, led by a 0.98 percent decline in the Australian dollar, and the high-yielding currency may face additional headwinds over the near-term as the fundamental outlook for the $1T economy deteriorates. Indeed, market participants are looking for more rate cuts from the Reserve Bank of Australia amid the slowing recovery, and the central bank may take additional steps to shield the region as China – Australia’s largest trading partner – continues to face a risk for a ‘hard landing.’ Indeed, China said it will take steps to encourage private sector lending, and we may see the People’s Bank of China ease monetary policy throughout 2012 as the government curbs its outlook for growth. In turn, we may see the RBA follow suit, and speculation for lower interest rates reinforces a bearish outlook for the AUDUSD as the pair carves out a lower top coming into March. However, as the aussie-dollar comes up against the 200-Day SMA (1.0408), the moving average may provide near-term support, and we may see a small bounce before a key break to the downside.

--- 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