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
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
Mixed
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
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Brush up your knowledge on trade-wars with this tool from DailyFX research briefly outlining trade-war history dating back to the early 1900s here: https://t.co/ZWaL6laTU5 https://t.co/WdxnoXvpS9
  • Crude Oil Prices May Rise on US Stimulus Hopes, PMI Data - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2020/10/23/Crude-Oil-Prices-May-Rise-on-US-Stimulus-Hopes-PMI-Data.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #crudeoil #OOTT https://t.co/l54vzXTIVK
  • Heads Up:🇬🇧 Retail Sales YoY (SEP) due at 06:00 GMT (15min) Expected: 3.7% Previous: 2.8% https://www.dailyfx.com/economic-calendar#2020-10-23
  • Heads Up:🇬🇧 Retail Sales ex Fuel YoY (SEP) due at 06:00 GMT (15min) Expected: 5% Previous: 4.3% https://www.dailyfx.com/economic-calendar#2020-10-23
  • 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/A4dqGMPylo https://t.co/M4xAIgWhiC
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.63%, while traders in EUR/USD are at opposite extremes with 72.80%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/UV4LsfdKmX
  • Stimulus talks and election anticipation remain the most overbearing market force as the week enters its final session. Evaluating the landscape in scenarios, $USDJPY may be one of the better positioned candidates. My Friday trading video: https://www.dailyfx.com/forex/video/daily_news_report/2020/10/23/USDJPY-May-Be-the-Best-Candidate-for-Stimulus-Traders-Fade-GBPUSD-Rally.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/dWgWc1w4SL
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.14% 🇨🇭CHF: -0.06% 🇨🇦CAD: -0.11% 🇬🇧GBP: -0.14% 🇪🇺EUR: -0.18% 🇳🇿NZD: -0.22% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/xYDB8lhyUc
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.25% FTSE 100: 0.16% France 40: 0.15% US 500: 0.12% Wall Street: 0.05% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/XG3DQEPj5g
  • Asia-Pacific stock indices Update: Nikkei 225 (+0.39%) Hang Seng (+0.65%) China CSI 300 (+0.18%) ASX 200 (closed) [delayed] -BBG
AUD/USD Forecast: Failure at 200-Day SMA Warns of Further Losses

AUD/USD Forecast: Failure at 200-Day SMA Warns of Further Losses

2019-12-18 01:00:00
David Song, Strategist
Share:

Australian Dollar Talking Points

AUD/USD extends the decline from the monthly high (0.6939) following the Reserve Bank of Australia (RBA) Minutes, and the failed attempt to close above the 200-Day SMA (0.6906) warns of further losses amid the historical tendency around the moving average.

AUD/USD Forecast: Failure at 200-Day SMA Warns of Further Losses

AUD/USD continues to give back the advance from the monthly low (0.6762) as the RBA Minutes highlight a dovish forward guidance and states that the central bank has “the ability to provide further stimulus to the economy, if required.”

The remarks suggest the RBA is merely taking a break from its rate easing cycle as officials “continue to assess the evidence of how the easing in monetary policy was affecting the economy.” In turn, Governor Philip Lowe and Co. may continue to insulate the economy in 2020 as “weak growth in household income continued to present a downside risk to consumer spending.”

Image of RBA interest rate decisions

It remains to be seen if the US and China trade deal will encourage the RBA to alter the forward guidance as the central bank plans to “reassess the economic outlook in February 2020,” but the central bank may stick to the same script at the next meeting on February 4 as the Trump administrationwill be maintaining 25 percent tariffs on approximately $250 billion of Chinese imports, along with 7.5 percent tariffs on approximately $120 billion of Chinese imports.

In response, the International Monetary Fund (IMF) warns that “Australia is especially exposed to a deeper-than-expected downturn in China,” with the group going onto say that “unconventional monetary policy measures such as quantitative easing may become necessary” amid the weakening outlook for global growth.

With that said, the RBA may continue to push monetary policy into uncharted territory, and the recent appreciation in AUD/USD may continue to unravel ahead of 2020 amid the string of failed attempts to close above the 200-Day SMA (0.6906).

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 AUD/USD rate daily chart

Source: Trading View

  • Keep in mind, the AUD/USD rebound following the currency market flash-crash has been capped by the 200-Day SMA (0.6906), with the exchange rate marking another failed attempt to break/close above the moving average in July.
  • A similar scenario appears to be taking shape in December as the advance from the monthly low (0.6762) fails to produce a closing price above the simple moving average.
  • The Relative Strength Index (RSI) highlights a similar dynamic as the oscillator snaps the bullish formation from earlier this month.
  • The failed run at the Fibonacci overlap around 0.6950 (61.8% expansion) to 0.6970 (23.6% expansion) has pushed AUD/USD back below the 0.6910 (38.2% expansion) region, with exchange rate currently sitting at overlap around 0.6830 (23.6% expansion) to 0.6850 (78.6% expansion).
  • Need a break/close below the 0.6780 (38.2% expansion) to 0.6800 (61.8% expansion) region to bring the downside targets back on the radar, with the first hurdle coming in around 0.6720 (78.6% expansion) to 0.6730 (50% 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