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
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
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bullish
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/QszmdZX8cS https://t.co/qdrsi61CN8
  • It seems the markets are riding high, but risk is always lurking around the corner. Consider your escape plan before you find yourself in collapsing market. What are the top havens for different conditions in 2021? Find out from @JohnKicklighter here: https://t.co/1oeXWEsJkb https://t.co/IyQdfq29fz
  • Myth or fact? One thing is for sure, there are a lot of misconceptions about trading. Knowing the difference between common trading myths and the reality is essential to long-term success. Find out about these 'myths' here: https://t.co/EDvQdHfIPm https://t.co/R7pa7DsM8n
  • What are some monetary policies that could affect Gold this quarter? Get your Gold free forecast here: https://t.co/bTXkGN1CIM #DailyFXGuides https://t.co/EhdZpmkzaH
  • Even more remarkable than the record high levels of leverage registered in US equities this past week was the attention it garnered. Paying attention to risk is a threat when markets are this high and the docket as dense as it is this week. My outlook: https://www.dailyfx.com/forex/video/daily_news_report/2021/01/23/Dow-VIX-Tesla-and-Leverage-Reflect-Greater-Risk-to-the-Relentless-Bull-Market.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/KBOJIRPTQe
  • 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/qP2PbS4dsY
  • Are you new to trading? Technical analysis of charts aims to identify patterns and market trends by utilising different forms of technical chart types and other chart functions. Get a refresher on technical analysis or begin building your knowledge here: https://t.co/qV3c7a4YR3 https://t.co/POGWDIkqqz
  • USD hegemony is at risk thanks to changes in the global economy and the long-term consequences of the US-China trade war. Get your market update from @CVecchioFX here: https://t.co/5GO9UrvO4y https://t.co/H76jNJJxU5
  • 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/1TiEWCbJ6t
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/fN2mfHgpON
Forex: USD Index Eyes 9,900- AUD Outlook Hinges On RBA Policy

Forex: USD Index Eyes 9,900- AUD Outlook Hinges On RBA Policy

David Song, Strategist

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

9946.61

9978.31

9941.21

-0.22

102.25%

Forex_USD_Index_Eyes_9900-_AUD_Outlook_Hinges_On_RBA_Policy_body_ScreenShot116.png, Forex: USD Index Eyes 9,900- AUD Outlook Hinges On RBA Policy

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.15 percent lower from the open after moving 75 percent of its average true range, and the downward trend in the greenback may continue to pan out in the week ahead as easing price pressures in the world’s largest economy fuels speculation for additional monetary support. As the index falls back from trendline resistance, we may see the index make another run at the 9,900 figure, but we will keep a close eye on the 30-minute relative strength index as it approaches oversold territory. Nevertheless, the recent efforts taken by the Federal Reserve continues to come under scrutiny as the ballooning balance sheet raises the threat for inflation, and we may see a growing number of central bank officials argue against further easing as the world’s largest economy gets on a more sustainable path.

Forex_USD_Index_Eyes_9900-_AUD_Outlook_Hinges_On_RBA_Policy_body_ScreenShot117.png, Forex: USD Index Eyes 9,900- AUD Outlook Hinges On RBA Policy

Indeed, we’re seeing the USDOLLAR threaten the upward trend from September yet again, but it seems as though there’s a growing rift within the Fed as policy makers see a more broad-based recovery in the year ahead. Richmond Fed President Jeffrey Lacker, the sole dissenter on the FOMC, argued that ‘monetary policy has only a limited ability to reduce unemployment, and such effects are transitory and generally short-lived,’ and went onto say that ‘further monetary stimulus runs the risk of raising inflation and destabilizing inflation expectations.’ At the same time, Dallas Fed President Richard Fisher warned that the central bank ‘may never be able to leave this position’ as the committee introduces a ‘qualitative guidance’, and stated that the FOMC’s ‘efficacy is declining over time’ as Chairman Ben Bernanke continues to embark on quantitative easing. In light of the recent weakness in the USDOLLAR, we may see the relative strength index come up against near-term support (41), but the greenback may regain its footing in the week ahead as the economic docket is expected to encourage an improved outlook for growth.

Forex_USD_Index_Eyes_9900-_AUD_Outlook_Hinges_On_RBA_Policy_body_ScreenShot118.png, Forex: USD Index Eyes 9,900- AUD Outlook Hinges On RBA Policy

The greenback weakened across the board, led by a 0.42 percent rally in the Euro, which was following by a 0.20 advance in the Australian dollar. We’re seeing the Australian dollar extend the advance from earlier this month as market participants continue to raise their appetite for risk, but the Reserve Bank of Australia (RBA) Minutes on tap for the following week should the central bank preserve a dovish tone for monetary policy. After lowering the benchmark interest rate to 3.00%, Governor Glenn Stevens seemed to endorse a wait-and-see approach for 2013, but we may see the central bank continue to embark on its easing cycle next year as the outlook for growth and inflation remains weak. As China, Australia’s largest trading partner, moves away from its export-drive market, the structural shift in the world’s second largest economy may continue to drag on the $1T economy, and we may see a short-term correction in the AUDUSD as the relative strength index approaches overbought territory.

--- 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, please follow this link.

New to FX? Watch this Video

Join us to discuss the outlook for the major currencies on the DailyFXForums

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

DISCLOSURES