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. See our updated Privacy Policy here.

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
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bearish
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
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Find out about the recent history of ISM data, how to track it, and how to trade its release here: https://t.co/MZtBh88nOv https://t.co/hQgZB9T73q
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10CKUR https://t.co/9JVh6BsWa2
  • There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all. Learn how interest rates impact currency markets here: https://t.co/J0EPMD2Cfi https://t.co/ZDuee58Abe
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/niJL2W2yXV
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/0rNbbrd58e
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/zPzJAxBJxt
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/uf6KEYTes5
  • 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: https://t.co/reRmDe1Ksp https://t.co/gRjdVfbg66
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCYRCIk https://t.co/mLLGqYUygY
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/HUYJzEkYiT
Bearish AUD/USD Sequence Raises Risk for Fresh 2018 Lows

Bearish AUD/USD Sequence Raises Risk for Fresh 2018 Lows

David Song, Strategist

Australian Dollar Talking Points

AUD/USD remains under pressure as lackluster data prints coming out of China, Australia’s largest trading partner, cast a weakened outlook for the Asia/Pacific region, and the exchange rate may ultimately trade to fresh yearly lows as it extends the bearish sequence from the previous week.

Image of daily change for major currencies

Bearish AUD/USD Sequence Raises Risk for Fresh 2018 Lows

Image of daily change for audusd

Updates to China’s Gross Domestic Product (GDP) report appear to have dampened the appeal of the Australian dollar as the economy expands at the slowest pace since 2009, and the softening outlook is likely to keep the Reserve Bank of Australia (RBA) on the sidelines as ‘developments in international trade policy continued to be a source of uncertainty.’

Image of RBA official cash rate

In turn, Governor Philip Lowe & Co. may stick to the same script at the next meeting on November 6 as ‘there was no strong case for a near-term adjustment in monetary policy,’ and it seems as though the RBA will carry the record-low cash rate into 2019 as ‘household income growth had been subdued and this continued to be an important source of uncertainty for the outlook for consumption and inflation.

With that said, the diverging paths for monetary policy continues to cast a long-term bearish outlook for AUD/USD especially as a growing number of Federal Reserve officials show a greater to extend the hiking-cycle, and a pickup in market volatility may spur a further shift in retail sentiment as traders appear to be betting on a larger recovery.

Image of IG client sentiment for audusd

The IG Client Sentiment Report shows retail interest still near extremes as 65.7% of traders are net-long with the ratio of traders long to short at 1.92 to 1. In fact, traders have remained net-long since September 24 when AUD/USD traded near 0.7270 even though price has moved 2.8% lower since then. The number of traders net-long is 14.7% higher than yesterday and 3.5% lower from last week, while the number of traders net-short is 7.0% lower than yesterday and 5.1% higher from last week.

The skew in retail position provides a contrarian view to crowd sentiment, with the broader outlook for AUD/USD still tilted to the downside as both price and the Relative Strength Index (RSI) continue to track the bearish formations from earlier this year. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups.

AUD/USD Daily Chart

Image of audusd daily chart
  • The near-term outlook for AUD/USD remains mired by the failed attempt to get back above the 0.7090 (78.6% retracement) to 0.7110 (78.6% retracement) region, with the recent series of lower highs & lows raising the risk for further losses.
  • In turn, the 2018-low (0.7041) sits on the radar, with the next downside region of interest coming in around 0.7020 (50% expansion) followed by the 0.6950 (61.8% expansion) area.
Image of DailyFX economic calendar

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2018.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

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

DISCLOSURES