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AUD/USD Retail Crowd Turns Net-Long Ahead of RBA Minutes

AUD/USD Retail Crowd Turns Net-Long Ahead of RBA Minutes

David Song, Strategist

Talking Points:

- AUD/USD Retail Crowd Turns Net-Long Ahead of Reserve Bank of Australia (RBA) Minutes.

- USD/JPY Remains Stuck in Triangle/Wedge Formation Ahead of Japan 1Q GDP, BoJ Meeting.

- USDOLLAR Pares Advance as U.S. Data Continues to Disappoint.

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AUD/USD

AUD/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Failure to close above 0.8130 (78.6% retracement) mayspur a near-term pullback in AUD/USD & keep the 2015 high (0.8294) in place, but will keep the topside targets on the radar as long as the bullish RSI momentum remains in play.
  • Despite the limit data prints coming out of the $1T economy, may see the Reserve Bank of Australia (RBA) Minutes heighten the appeal of the higher-yielding currency should the central bank highlight an end of its easing cycle.
  • DailyFX Speculative Sentiment Index (SSI) shows retail crowd has flipped to net-long AUD/USD during the European session, with the ratio currently sitting at +1.23.

USD/JPY

USD/JPY Daily Chart
  • Lack of momentum to close above 120.10 (61.8% retracement) to 120.20 (50% retracement) may continue to produce a narrowing range in USD/JPY especially as the RSI retains the bearish momentum carried over from back in December.
  • Bank of Japan (BoJ) looks poised to retain its currently policy at the May 22 interest rate decision, and the preliminary 1Q Gross Domestic Product (GDP) report may encourage the central bank to carry its wait-and-see approach into the second-half of 2015 as the growth rate is expected to increase an annualized 1.6% after expanding 1.5% during the last three-months of 2014.
  • Break/close below 118.90 (50% retracement) to 119.20 (23.6% retracement) may open up key support ar 118.20 (61.8% retracement).

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Read More:

More USD Patterns

The Weekly Volume Report: Euro Rises But Volume Diminishes

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

11656.22

11714.95

11654.29

-0.01

86.27%

AUD/USD Retail Crowd Turns Net-Long Ahead of RBA MinutesUSDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Dow Jones-FXCM U.S. Dollar gives back the advance to 11,714 following the ongoing slew of dismal data coming out of the U.S. economy; downside targets remain favored as the bearish formations remain in play.
  • May get a limited market reaction to the Federal Open Market Committee (FOMC) Minutes amid the lackluster comments from the April 29 meeting, but a further slowdown in the headline and core reading for the Consumer Price Index (CPI) may produce further headwinds for the greenback as the central bank struggles to achieve its 2% target for inflation.
  • As the RSI flirts with oversold territory, may see close below 11,646 (61.8% retracement) next week, which could foster a more meaningful run at channel support/2015 low (11,550).

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AUD/USD Retail Crowd Turns Net-Long Ahead of RBA Minutes

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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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