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
Mixed
USD/JPY
Bearish
Gold
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
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Real Time News
  • RT @DeItaOne: FEDERAL RESERVE CHAIR POWELL SAYS U.S. TRADE TENSIONS HAVE CONTRIBUTED TO MANUFACTURING RECESSION THIS YEAR
  • The 2s10s US yield curve (spread between the 2 and 10 year Treasury Yield) is at 23.273, down from it's recent high of 27.417 on October 12th https://t.co/xoew9EPxK9
  • The Dow's past 9-day trading range is the smallest on a historical basis since Jan 2, 2018. Holiday-level conditions. Perfect time for a catalyst... https://t.co/m3TLnI7X3P
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.38% 🇬🇧GBP: 0.24% 🇨🇭CHF: 0.19% 🇨🇦CAD: 0.01% 🇳🇿NZD: -0.47% 🇦🇺AUD: -0.76% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/M9CEfeQetJ
  • Waiting for the Section 232 auto tariff decision due today like... https://t.co/9K58s23VcT
  • RT @FxWestwater: Powell, Fed Officials Highlight US Economy, Debt & Repo Strains Get your market update @DailyFX #FOMC $DXY #USD #Fed…
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Gold: 0.53% Silver: 0.35% Oil - US Crude: 0.20% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/7C3JtRpJc2
  • Fed Funds Futures are pricing a 7.7% probability for a rate cut at next month's FOMC meeting, down from 57.7% on October 3rd https://t.co/0YSVotzeMk
  • RT @ZabelinDimitri: - #USDBRL reaching edging closer to retesting 14-month high - Recent price action suggesting upside momentum is waning…
  • 🇳🇿 NZD BusinessNZ Manufacturing PMI (OCT), Actual: 52.6 Expected: N/A Previous: 48.8 https://www.dailyfx.com/economic-calendar#2019-11-14
AUDUSD Rate Outlook Remains Mired as RBA Sticks to Dovish Guidance

AUDUSD Rate Outlook Remains Mired as RBA Sticks to Dovish Guidance

2019-09-25 05:00:00
David Song, Currency Strategist
Share:

Australian Dollar Talking Points

AUDUSD attempts to pare the decline from the previous week as Reserve Bank of Australia (RBA) Governor Philip Lowe offers little hints for an imminent rate cut, but the recent rebound in the exchange rate may prove to be short-lived as the central bank retains a dovish forward guidance for monetary policy.

AUDUSD Rate Outlook Remains Mired as RBA Sticks to Dovish Guidance

AUDUSD climbs to a fresh weekly-high (0.6806) as Governor Lowe states that “the fundamental factors underpinning the longer-term outlook for the Australian economy remain strong,” with the central bank head going onto say that the RBA will “again take stock of the evidence” at the next meeting on October 1.

Image of RBA interest rates

The comments suggest the RBA will stick to the sidelines following the back-to-back rate cuts as “the Australian economy has strong fundamentals,” but the weakening outlook for global growth may push the central bank to implement lower interest rates as “the Board is prepared to ease monetary policy further if needed.”

As a result, the shift in US trade policy may play an increased role in dictating global monetary policy as China, Australia’s largest trading partner, struggles to reach an agreement with the Trump administration, and the RBA may retain the dovish forward guidance throughout 2019 as the “US–China disputes, in particular, are having a disruptive effect on international trade flows.”

In turn, the Australian dollar may face additional headwinds over the coming months, with the broader outlook still tilted to the downside as AUDUSD continues to track the bearish trend from late last year.

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

Source: Trading View

  • Keep in mind, the AUDUSD rebound following the currency market flash-crash has been capped by the 200-Day SMA (0.6998), with the exchange rate marking another failed attempt to break/close above the moving average in July.
  • More recently, the rebound from the September-low (0.6688) appears to sputtered ahead of the 0.6910 (38.2% expansion) region, with the exchange rate at risk of exhibiting a more bearish behavior as it struggles to hold above the 0.6800 (61.8% expansion) handle.
  • As a result, the Fibonacci overlap around 0.6720 (78.6% expansion) to 0.6730 (100% expansion) remains on the radar, with a break of the 2019-low (0.6677) raising the risk for a move towards 0.6620 (100% expansion).

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.