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
GBP/USD
Bullish
USD/JPY
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
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
Bitcoin
Bearish
More View more
Real Time News
  • The latest UK General Election opinion polls continue to show the Conservative Party holding a strong lead over Labour and point to Boris Johnson winning a working majority in Parliament. Get your $GBPUSD market update from @nickcawley1 here: https://t.co/qF04EOUWkI https://t.co/LNl4bXbnpp
  • Recent polls have put Conservatives ahead of Labour and given a boost to $GBP. Get your #Brexit update from @ZabelinDimitri here: https://t.co/l2n53C0cYY https://t.co/oTWfXkaDDt
  • What are the truths and myths of #forex trading? Find out from @DailyFX analysts here: https://t.co/uF75VPzstr #FOMOintrading https://t.co/xeromAGqqx
  • Macro data from around the world have long attested to the urgent need for a trade settlement between the US and China. Increasingly the corporate numbers are saying the same. Get your market update from @DavidCottleFX here:https://t.co/Qon7QUO80c https://t.co/rCOG78QQ2M
  • #Gold prices may fall while the US Dollar gains even as economic policies championed by the Trump administration invite inflation. Get your market update from @IlyaSpivak here: https://t.co/4lHhHsby56 $XAUUSD https://t.co/JmZxckVHdS
  • Cable (GBP/USD) remains just off its seven-month high print around 1.3165 as traders start to move to the side lines ahead of next Thursday’s General Election vote. Get your $GBPUSD market update from @nickcawley1 here: https://t.co/CpCh13J9ZH #Brexit https://t.co/PIh6WUqbsK
  • (Weekly Technical Outlook) GBP/USD, EUR/GBP, GBP/JPY, GBP/CAD Outlook as UK Election Looms $GBPUSD $EURGBP $GBPJPY #UKelection2019 - https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/12/07/GBPUSD-EURGBP-GBPJPY-GBPCAD-Outlook-as-UK-Election-Looms.html?CHID=9&QPID=917702 https://t.co/iuILHYczJ7
  • Why do you require consistency in trading and why does it matter? Find out: https://t.co/WlEFlluGfZ #tradingstyle https://t.co/TkMtJQKatx
  • By issuing debt denominated in $USD, China is making a long-term bet that it will be cheaper to pay back its loans over time in the US Dollar; it believes the value of the US Dollar will fall. Get your market update from @CVecchioFX here:https://t.co/5GO9UrvO4y https://t.co/xV9urXXf48
  • What are some risk trading management techniques? Find out: https://t.co/RShdlDz9RA #tradingstyle https://t.co/M3ASPIHAep
AUDUSD Rebound Fizzles as Trump Fires Warning Shots on China Tariff

AUDUSD Rebound Fizzles as Trump Fires Warning Shots on China Tariff

2019-06-11 02:00:00
David Song, Currency Strategist
Share:

Australian Dollar Talking Points

AUD/USD remains little changed even though the NAB Business Confidence survey climbs to 7.3 from a reading of 0.1 in April, and the exchange rate may continue to consolidate over the coming days as the Trump administration keeps the door open to boost tariffs on China, Australia’s largest trading partner.

AUDUSD Rebound Fizzles as Trump Fires Warning Shots on China Tariff

AUDUSD gives back the advance following the below-forecast Non-Farm Payrolls (NFP) report as U.S. President Donald Trump insists that tariffs on Chinese goods can go “much higher than 25%,” and the Australian dollar stands at risk of facing headwinds ahead of the Group of 20 (G20) Summit scheduled for later this month amid the weakening outlook the Asia/Pacific region.

Image of RBA official cash rate

In response, the Reserve Bank of Australia (RBA) may continue to endorse a dovish forward guidance at its next meeting on July 2, and the central bank may take additional steps to insulate the economy as “the downside risks stemming from the trade disputes have increased.”

It seems as though the RBA will implement another 25bp rate-cut in 2019 as the “latest set of forecasts were prepared on the assumption that the cash rate would follow the path implied by market pricing, which was for the cash rate to be around 1 per cent by the end of the year,” and Governor Philip Lowe and Co. appear to be on a preset course to push the official cash rate (OCR) to fresh record-lows as “the Australian economy is likely to have spare capacity for a while yet.

With that said, AUDUSD may a more bearish fate over the near-term as the ongoing trade dispute between the US and China fuels speculation for another RBA rate-cut, but retail sentiment remains skewed despite the recent pickup in market volatility.

Image of IG client sentiment for audusd rate

The IG Client Sentiment Report shows 64.7% of traders are now net-long AUD/USD compared to 58.4% last week, with the ratio of traders long to short at 1.84 to 1. Keep in mind, traders have been net-long since April 18 when AUDUSD traded near 0.7160 even though price has moved 2.9% lower since then.

The number of traders net-long is 19.1% higher than yesterday and 0.7% higher from last week, while the number of traders net-short is 8.0% lower than yesterday and 7.3% lower from last week. The recent decline in net-short position may account for profit-taking behavior as AUDUSD pulls back from the monthly-high (0.7022), but the tilt remains in the sentiment index, with the ongoing skew offerings a contrarian view as both price and the Relative Strength Index (RSI) continue to track the bearish trends carried over from late-2018.

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss potential trade setups.

AUD/USD Rate Daily Chart

Image of audusd daily chart
  • Keep in mind, the AUDUSD rebound following the currency market flash-crash has been capped by the 200-Day SMA (0.7119), with the exchange rate marking another failed attempt to break/close above the moving average in April.
  • In turn, AUDUSD remains at risk of giving back the rebound from the 2019-low (0.6745) as the wedge/triangle formation in both price and the Relative Strength Index (RSI) unravels.
  • Downside targets coming back on the radar for AUDUSD as the recent advance fails to spur a run at the May-high (0.7061), with the near-term outlook capped by the 0.7020 (50% expansion) region.
  • In turn, a break/close below the 0.6950 (61.8% expansion) pivot opens up the Fibonacci overlap around 0.6850 (78.6% expansion) to 0.6880 (23.6% retracement), with the next region of interest coming in around 0.6730 (100% expansion).
  • Will keep a close eye on the RSI as it flashes a bearish signal, with the oscillator finally snapping the bullish formation carried over from the previous month.

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 Strategist

Follow me on Twitter at @DavidJSong.

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

DISCLOSURES

News & Analysis at your fingertips.