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.

Free Trading Guides
EUR/USD
Mixed
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
Oil - US Crude
Mixed
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
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
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Bullish
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
More View more
Real Time News
  • Update on #Cryptocurrencies #BITCOIN +3.41% #BITCOINCASH +2.15% #ETHEREUM +4.35% #RIPPLE +0.93% #LITECOIN 2.35%
  • Amid escalating China tension, Australian Dollar risk reversals indicate that the bullish bias recently enjoyed by AUD/USD could soon unwind and pressure spot prices back lower. Get your $AUDUSD technical analysis from @RichDvorakFX here: https://t.co/ZAHEwxNrEW https://t.co/gWt401EkQI
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.62% 🇬🇧GBP: 0.50% 🇨🇭CHF: 0.42% 🇦🇺AUD: 0.21% 🇯🇵JPY: 0.09% 🇨🇦CAD: -0.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Gn0ub8TS6e
  • #Gold prices have continued to push higher as expectations have built for global Central Banks to remain very loose and passive with monetary policy for the foreseeable future. Get your $XAUUSD technical analysis from @JStanleyFX here: https://t.co/h5tF3kAZfd https://t.co/gVU4QoQjnv
  • White House says that Trump and Macron talked about COVID-19 and holding G7 meeting in person - BBG
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 0.77% Gold: 0.58% Oil - US Crude: -0.14% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/0LgQROzxEj
  • Is there? Tough assertion to back up... https://t.co/I0TLitj21j
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.91%, while traders in US 500 are at opposite extremes with 76.25%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/JWJfhVeAZH
  • RT @FedResearch: New #IFDPPaper shows how currency hedging links global imbalances to exchange rate determination, cross-currency basis and…
  • $AUD $AUDUSD | Australian Dollar Risk Reversals Slump as China Tension Heats Up (via @DailyFX) -Aussie bulls undermined by stalling call/put skew readings -Daunting confluence of technical resistance near 0.67 a threat Link to More: https://www.dailyfx.com/forex/market_alert/2020/05/28/audusd-aud-usd-price-outlook-australian-dollar-risk-reversals-slump-china-tension.html #FX #Forex #Trading https://t.co/Ra4EJHsyib
AUD/USD Risks Larger Pullback as RBA Ramps Up Verbal Intervention

AUD/USD Risks Larger Pullback as RBA Ramps Up Verbal Intervention

2017-08-01 15:40:00
David Song, Strategist
Share:

Talking Points:

- GBP/USD Initiates Bullish Sequence Ahead of BoE Rate Decision.

- AUD/USD Risks Larger Pullback as RBA Ramps Up Verbal Intervention.

-DailyFX 3Q Forecasts Are Now Available.

DailyFX Table

Ticker

Last

High

Low

Daily Change (pip)

Daily Range (pip)

GBP/USD

1.3215

1.3245

1.3191

0

54

GBP/USD continues to gain ground ahead of the Bank of England (BoE) interest rate decision, with the near-term outlook tilted to the topside as the pair starts to carve a series of higher highs & lows.

Indeed, the BoE is widely expected to keep the benchmark interest rate at the record-low of 0.25% following the 5 to 3 split in June, but the fresh votes may reveal a growing dissent within the Monetary Policy Committee (MPC) as Governor Mark Carney continues to warns ‘inflation will be above target for a period of time.’

Even though BoE board member Ben Broadbent argues ‘it is a bit tricky at the moment to make a decision,’ a growing number of MPC officials may show a greater willingness to start normalizing monetary policy as Chief Economist Andrew Haldane notes that the central bank needs to ‘look seriously at the possibility of raising interest rates to keep the lid of those cost of living increases.’ Keep in mind, Silvana Tenreyro joins the MPC to replace Kristin Forbes, while Sir David Ramsden is scheduled to begin his tenure in September, and the majority may merely try to buy more time as the recent slowdown in the U.K. Consumer Price Index (CPI) dampens the threat for above-target inflation.

GBP/USD Daily Chart

GBP/USD Daily Chart

Chart - Created Using Trading View

  • Topside targets remain on the radar as GBP/USD initiates a bullish sequence, with the next region of interest coming in around 1.3300 (100% expansion) to 1.3370 (78.6% expansion) followed by 1.3445 (September 2016-high) to 1.3460 (50% retracement).
  • Keeping a close eye on the Relative Strength Index (RSI) as it threatens the bearish formation carried over from May, but the lack of momentum to push into overbought territory raises the risk for a near-term pullback in the exchange rate as price continues to diverge with the oscillator.
  • A move below the overlap around 1.3090 (38.2% retracement) to 1.3120 (78.6% retracement) opens up the 1.2950 (23.6% retracement) region, with the next region of interest coming in around 1.2860 (61.8% retracement, which sits just above the July-low (1.2812).

Ticker

Last

High

Low

Daily Change (pip)

Daily Range (pip)

AUD/USD

0.7976

0.8043

0.7961

27

82

AUD/USD fails to test the 2017-high (0.8066), with the pair at risk for a near-term correction as the Reserve Bank of Australia (RBA) toughens the verbal intervention on the local currency.

The fresh rhetoric coming out of the RBA suggests the central bank is in no rush to normalize monetary policy as officials warn ‘an appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.’ As a result, Governor Philip Lowe and Co. may continue to endorse a wait-and-see approach at the next meeting on September 5, and the RBA may carry the record-low cash rate into 2018 as ‘wage growth remains low and this is likely to continue for a while yet.’

In turn, AUD/USD may stage a larger pullback as the RBA adopts a cautious tone, but the shift in market behavior may continue to unfold over the coming months especially as Fed Fund Futures continue to highlight a 50/50 chance for a December rate-hike.

AUD/USD Daily Chart

AUD/USD Daily Chart

Chart - Created Using Trading View

  • Longer-term outlook for AUD/USD remains constructive following the break of the 2016-range, but the lack of momentum to close above the close the 0.8020 (38.2% expansion) hurdle raises the risk for a larger pullback especially as the Relative Strength Index (RSI) finally appears to be coming off of overbought territory.
  • May see a bearish RSI trigger emerge over the days ahead if the oscillator fails to preserve the bullish formation from May; move below the Fibonacci overlap around 0.7930 (50% retracement) to 0.7940 (61.8% retracement) opens up the next downside hurdle around 0.7850 (38.2% retracement) to 0.7860 (61.8% expansion) followed by the former-resistance zone around 0.7720 (23.6% retracement) to 0.7740 (78.6% expansion).
IG Sentiment

Track Retail Sentiment with the New Gauge Developed by DailyFX Based on Trader Positioning

  • Retail trader data shows 37.7% of traders are net-long GBP/USD with the ratio of traders short to long at 1.65 to 1. In fact, traders have remained net-short since June 23 when GBP/USD traded near 1.27744; price has moved 3.6% higher since then. The number of traders net-long is 2.7% lower than yesterday and 26.4% lower from last week, while the number of traders net-short is 0.6% higher than yesterday and 10.2% higher from last week.
  • Retail trader data shows 32.4% of traders are net-long AUD/USD with the ratio of traders short to long at 2.08 to 1. In fact, traders have remained net-short since June 04 when AUD/USD traded near 0.74405; price has moved 7.4% higher since then. The number of traders net-long is 1.5% higher than yesterday and 11.8% higher from last week, while the number of traders net-short is 0.9% higher than yesterday and 8.8% lower from last week.
DailyFX Calendar

Click Here for the DailyFX Calendar

--- 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.

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

DISCLOSURES

News & Analysis at your fingertips.