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
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
Bearish
Wall Street
Bullish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • US Senator Romney: I want to get an agreement on infrastructure today $USD $DXY
  • US Treasury Sec. Yellen: - Congress should act to lift the debt ceiling as quickly as possible - We cannot allow any chance of the government defaulting on its debt
  • US Treasury Sec. Yellen: - Defaulting on the national debt is "unthinkable" - It would be catastrophic for the US to default, that would likely precipitate a crisis
  • US Treasury Sec. Yellen: - The Fed's IOER adjustment was purely technical - According to the Fed, the stance of monetary policy has not changed
  • US Treasury Sec. Yellen: - Inflation estimates for next year are consistent, hovering around 2%
  • US Treasury Sec. Yellen: - The majority of inflation expectation indicators are still stable - Inflation will return to normal levels after this year
  • US Treasury Sec. Yellen: - I believe current inflation patterns are temporary due to supply chain bottlenecks - It will be a bumpy road to reopening, but the economy is on a good track
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Silver: 0.59% Gold: 0.05% Oil - US Crude: -0.12% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/aUkdKtKoMw
  • US Treasury Sec. Yellen: Raising the corporate tax rate would land the US in the middle of its peers
  • US Senator Schumer: - We are moving forward on multiple infrastructure proposals - I will meet with White House officials later along with Speaker of the House Nancy Pelosi
AUD/USD Rebound Undermined by Historical Behavior Around 200-Day SMA

AUD/USD Rebound Undermined by Historical Behavior Around 200-Day SMA

David Song, Strategist

Australian Dollar Talking Points

AUD/USD recoups the losses from earlier this week as Australia Employment picks up more-than-expected in November, but the failed attempt to close above the 200-Day SMA (0.6904) undermines the recent rebound in the exchange rate amid the historical tendency around the moving average.

AUD/USD Rebound Undermined by Historical Behavior Around 200-Day SMA

AUD/USD extends the advance from the weekly low (0.6828) as Australia adds 39.9K jobs in November, with the unemployment unexpectedly narrowing to 5.2% from 5.3% the month prior.

The data may encourage the Reserve Bank of Australia (RBA) to retain a wait-and-see approach in 2020 as “recent outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.”

Image of RBA interest rate decisions

In turn, the RBA may stick to the sidelines at the next meeting on February 4, but the central bank may continue to endorse a dovish forward guidance as Governor Philip Lowe and Co. insists that the central bank has “the ability to provide further stimulus to the economy, if required.”

The RBA may continue to respond to the shift in US trade policy despite the Phase One deal 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.”

The slowdown in China, Australia’s largest trading partner, is likely to keep the RBA on its toes as “the US–China trade and technology disputes continue to affect international trade flows and investment,” and the central bank may continue to insulate the economy in 2020 as the International Monetary Fund (IMF) warns that “unconventional monetary policy measures such as quantitative easing may become necessary.”

With that said, the RBA may reestablish its rate easing cycle over the coming months, and the recent rebound in the exchange rate may prove to be short lived amid the failed attempts to close above the 200-Day SMA (0.6904).

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 (0.6904), with the exchange rate staging multiple failed attempts to close above the moving average in 2019.
  • 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 the exchange rate at risk of facing range bound conditions as it bounces back from the 0.6830 (23.6% expansion) to 0.6850 (78.6% expansion) region.
  • 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