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AUD/USD Holds Monthly Low Ahead of RBA- Gold Tests Former Support

AUD/USD Holds Monthly Low Ahead of RBA- Gold Tests Former Support

David Song, Strategist

Talking Points:

- AUD/USD Holds Monthly Low Ahead of RBA Interest Rate Decision.

- Gold Fails to Retain Bullish RSI Momentum- Former Support in Focus.

- USDOLLAR Topside Targets Still Favored Despite Weaker-Than-Expected 4Q GDP.

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AUD/USD

AUD/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Looks as though AUD/USD will hold the January low (0.7718) ahead of the Reserve Bank of Australia (RBA) February 2 meeting, but remains at risk for a further decline as the Relative Strength Index (RSI) holds in oversold territory.
  • RBA is largely anticipated to keep the benchmark interest rate on hold at 2.50%, but seeing speculation for a rate cut amid the global easing cycle.
  • DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long AUD/USD, but seeing the ratio narrow going into February as it currently stands at +1.51.

XAU/USD

XAU/USD Daily Chart
  • Gold remains vulnerable to a further decline after failing to close above $1301 (50% retracement); near-term top in place?
  • As the RSI fails to preserve the bullish momentum carried over from back in November, the precious metal looks vulnerable to a further decline especially if it fails to close above 1.270 (50% expansion) going into February.
  • Break/close below $1250 should expose the former resistance zones around $1227 (23.69% expansion) to $1231 (78.6% retracement).

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Read More:

GBPNZD - Symmetry In Motion

USD/CAD Overloved?

USDOLLAR(Ticker: USDollar):

IndexLastHighLowDaily Change (%)Daily Range (% of ATR)
DJ-FXCM Dollar Index11846.1211860.6111824.5-0.0654.05%
USDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • String of higher-lows in Dow Jones-FXCM U.S. Dollar continues to foster a bullish outlook for February even as the advance 4Q Gross Domestic Product (GDP) report falls short of market expectations.
  • Nevertheless, seeing greater willingness from Fed officials to raise the benchmark interest rate in mid-2015 as St. Louis Fed President James Bullard favors normalize monetary policy sooner rather than later.
  • As the RSI holds in overbought territory, topside targets remain favored with the next level of interest at 11,901 (78.6% expansion).

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ReleaseGMTExpectedActual
Gross Domestic Product (Annualized) (QoQ) (4Q A)13:303.0%2.6%
Personal Consumption (4Q A)13:304.0%4.3%
GDP Price Index (4Q A)13:300.9%0.0%
Core Personal Consumption Expenditure (4Q A)13:301.1%1.1%
ISM Milwaukee (JAN)14:0058.0051.60
Chicago Purchasing Manager (JAN)14:4557.559.4
U. of Michigan Confidence (JAN F)15:0098.298.1

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--- Written by David Song, Currency Analyst

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

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