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
Bearish
Oil - US Crude
Bearish
Wall Street
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
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/roqwTv3eyP
  • Technical analysis of charts aims to identify patterns and market trends by utilising differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/ghcFd5ufaD
  • Traders tend to overcomplicate things when they’re starting out in the forex market. This fact is unfortunate but undeniably true. Simplify your trading strategy with these four indicators here: https://t.co/fYgcMxImlP https://t.co/kkekBVYvhV
  • 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/VwIkOMpvYl
  • “The UK and EU have agreed to return to the negotiating table to try to agree a post-#Brexit trade deal. But on Friday, a joint statement said ‘significant divergences’ remained.” - BBC News #GBP
  • Multiple time frame analysis follows a top down approach when trading and allows traders to gauge the longer-term trend while spotting ideal entries on a smaller time frame chart. Learn how to incorporate multiple time frame analysis here: https://t.co/Sy3g6HGLrR https://t.co/aRfVCRZut3
  • Forex sentiment analysis can be a useful tool to help traders understand and act on price behavior. Learn how to get the most out of understanding trader sentiment here: https://t.co/rJznrXkcYz https://t.co/uUh18lR3yK
  • The rising wedge is a popular reversal pattern that is predictive in nature and can give traders a clue to the direction and distance of the next price move. Incorporate the rising wedge in your trading strategy and learn more here: https://t.co/zTTk2WOrj9 https://t.co/q5oBalZieU
  • Both the S&P 500 and $EURUSD will enter the coming week with momentum to their back. What can trip up the rallies? What could keep them going? My overview for the week ahead: https://www.dailyfx.com/forex/video/daily_news_report/2020/12/05/SP-500-and-EURUSD-Rallies-Face-Different-Conviction-Questions-.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/YfEXEhkbhl
  • After the recent strength of EUR/USD, a period of consolidation is likely ahead of two critical meetings: of the European Central Bank and the European Council. Get your $EURUSD market update from @MartinSEssex here:https://t.co/Slu7tHo2a4 https://t.co/9am4szeia1
Upbeat Australia Retail Sales Report to Fuel Bullish AUD/USD Series

Upbeat Australia Retail Sales Report to Fuel Bullish AUD/USD Series

2019-01-10 22:30:00
David Song, Strategist
Share:

Australian Dollar Talking Points

AUD/USD pares the weakness following the larger-than-expected slowdown in China’s Consumer Price Index (CPI), and fresh data prints coming out of Australia may fuel the recent series of higher highs & lows in the exchange rate as Retail Sales are projected to increase another 0.3% in November.

Image of daily change for major currencies

AUD/USD 2019 Open Range Raises Risk for Larger Flash-Crash Rebound

Image of daily change for audusd

The AUD/USD rebound following the currency market flash-crash may get a boost as the underlying strength in private-sector consumption puts pressure on the Reserve Bank of Australia (RBA) to alter the monetary policy outlook, and the central bank may adopt a more upbeat tone at the next meeting on February 5 especially as U.S. President Donald Trump tweets that ‘talks with China are going very well.

The easing threat of a U.S.-China trade war should keep the Australian dollar afloat as it removes a major downside risk for the Asia/Pacific region, and the central bank may start to prepare households and businesses for a less-accommodative stance as ‘members continued to agree that the next move in the cash rate was more likely to be an increase than a decrease.’

Image of RBA official cash rate

However, it remains to be seen if Governor Philip Lowe & Co. will lift the official cash rate (OCR) off of the record-low in 2019 as ‘there was no strong case for a near-term adjustment in monetary policy,’ and the RBA’s wait-and-see approach may continue to rattle the broader outlook for AUD/USD as the Federal Reserve removes its non-standard measures.

Even though the Federal Open Market Committee (FOMC) appears to be approaching the end of the hiking-cycle, fresh comments from Chairman Jerome Powell suggests the Fed will continue to unload its asset-holdings in 2019 as the balance sheet is expected to return to a ‘more normal level.’ The quantitative tightening (QT) is likely to drag on aussie-dollar rate as long as the RBA remains reluctant to implement higher interest rates, but the monthly opening range raises the risk for a larger correction as the exchange rate initiates a series of higher highs & lows.

Keep in mind, the recent appreciation in AUD/USD has triggered a change in retail interest, with traders still attempting to fade the advance from the monthly-low (0.6745).

Image of IG client sentiment for audusd

The IG Client Sentiment Report shows only 54.3%of traders are now net-long AUD/USD compared to 61.4% earlier this week, with the ratio of traders long to short at 1.19 to 1.The number of traders net-long is 2.6% lower than yesterday and 11.6% lower from last week, while the number of traders net-short is 20.8% higher than yesterday and 64.6% higher from last week.

The drop in net-long position appears to be driven by profit-taking behavior as AUD/USD extends the advance from earlier this month, but the ongoing surge in net-short interest suggests a broader shift in retail sentiment is taking shape even as both price and the Relative Strength Index (RSI) break out of the bearish formations carried over from the previous month. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups.

AUD/USD Daily Chart

Please add a description for the image.
  • Topside targets are still on the radar for AUD/USD as it initiates a series of higher highs & lows, with a close above the 0.7170 (23.6% expansion) to 0.7180 (61.8% retracement) region rising the risk for a move towards 0.7230 (61.8% expansion),
  • Next region of interest comes in around 0.7320 (50% expansion) to 0.7340 (61.8% retracement) followed by the 0.7400 (38.2% expansion) handle, which lines up with the December-high (0.7394).

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 2019.

--- 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