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.



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

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Oil - US Crude
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
More View more
Real Time News
  • The US Dollar may seesaw as investors navigate what could be a volatile week packed with US GDP data, rising Covid-19 cases, Q3 corporate earnings and more. Get your #currencies update from @ZabelinDimitri here:
  • USD/MXN pushes lower towards a critical support level in the midst of continued political uncertainty. Get your #currencies update from @HathornSabin here:
  • 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: $GC_F $XAUUSD $GLD
  • 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:
  • 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:
  • 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:
  • 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:
  • 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:
  • 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:
  • 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:
USD Correction Underway, AUD Outlook Dampen By Rate Expectations

USD Correction Underway, AUD Outlook Dampen By Rate Expectations

2012-06-06 16:25:00
David Song, Strategist





Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index






USD_Correction_Underway_AUD_Outlook_Dampen_By_Rate_Expectations_body_ScreenShot051.png, USD Correction Underway, AUD Outlook Dampen By Rate Expectations

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.59 percent lower on the day after moving 124 percent of its average true range, and the greenback may track lower over the remainder of the week as it carves out a short-term top coming into June. As we expect former trendline support to act as new resistance, the index appears to be carving out a downward trend, and the recent weakness in the dollar may gather pace over the coming days as the European Central Bank looks to increase its effort in addressing the debt crisis. At the same time, the Fed’s Beige Book may boost risk-taking behavior should the survey fuel speculation for another round of quantitative easing, but we may see the report prop up the dollar should the central bank continue to take note of the more robust recovery.

USD_Correction_Underway_AUD_Outlook_Dampen_By_Rate_Expectations_body_ScreenShot052.png, USD Correction Underway, AUD Outlook Dampen By Rate Expectations

Indeed, Atlanta Fed President Dennis Lockhart floated the idea of extending ‘Operation Twist’ as opposed to expanding the balance sheet further, and it seems as though the central bank is looking at other options besides QE3 as the debt crisis continues to pose a risk to the global financial system. Beyond the external risks surrounding the world’s largest economy, the ongoing improvement in private sector activity continues to limit the Fed’s scope to further pump liquidity into the system, and we should see the FOMC continue to soften its dovish tone for monetary policy as the world’s largest economy gets on a more sustainable path. Nevertheless, it seems as though we’re finally seeing a correction in the USDOLLAR as the relative strength index continues to come off of overbought territory, and will be watching the 61.8 percent Fibonacci retracement around 9,949 for key support as it maintains the upward trending channel from earlier this year.

USD_Correction_Underway_AUD_Outlook_Dampen_By_Rate_Expectations_body_ScreenShot053.png, USD Correction Underway, AUD Outlook Dampen By Rate Expectations

Three of the four components advanced against the dollar, led by a 1.69 percent rally in the Australian dollar, and the high-yielding currency may continue to retrace the selloff from the previous month as currency traders increase their appetite for risk. Indeed, the above-forecast 1Q GDP print has helped to prop up the AUDUSD, but the rebound in the exchange rate is likely to be short-lived as market participants see the Reserve Bank of Australia taking additional steps to stimulate a stronger recovery. According to Credit Suisse overnight index swaps, investors are still looking for another 100bp worth of rate cuts over the next 12-months, and we will main a bearish outlook for the aussie-dollar as the continues to carry out its easing cycle.

--- Written by David Song, Currency Analyst

To contact David, e-mail 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

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.