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
Bearish
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
Bullish
GBP/USD
Mixed
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
More View more
Real Time News
  • S&P 500 Price Forecast: SPX Tests Huge Zone at Bull Flag Support https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2020/10/27/SPX-SPY-ES-Price-Forecast-SPX-Tests-Huge-Zone-at-Bull-Flag-Support.html $SPX $SPY $ES https://t.co/Pu2IgKdY5E
  • ....also, the outlook with a third peak in Covid cases in the US - and spread globally - is going to seriously undermine the sustainability of growth
  • A lot is being made of how remarkable the forecasted 31% increase in US GDP for 3Q would be if we hit the number Thursday, but remember the context. We are coming off a -31.4% plunge. You need an even bigger recovery to get back up to pace starting from a hole https://t.co/oBJKnOVgqu
  • is possible that USD/CAD is trying to carve a higher-low from the September 1 low, but some more work is needed to turn the near-term favorable for taking long-side bets. Get your $USDCAD technical analysis from @PaulRobinsonFX here:https://t.co/qNZxsbcXZO https://t.co/tZbYH8fG2h
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.79%, while traders in EUR/USD are at opposite extremes with 70.03%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/zsLSaHzzOv
  • Heads Up:🇩🇪 Bundesbank Balz Speech due at 17:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-10-27
  • The blue-chip Dow ($DJIA) is coming up on a six-month trendline support close to the 50-day moving average. Overlay here is $CAT who reported a 54% drop in earnings https://t.co/T5Oj8rVQg9
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 2.64% Silver: 0.72% Gold: 0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/laWDJf4nqF
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.61% 🇨🇦CAD: 0.44% 🇯🇵JPY: 0.39% 🇦🇺AUD: 0.29% 🇪🇺EUR: 0.20% 🇨🇭CHF: 0.16% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/0kZ2RALYDe
  • #Bitcoin Breakout. . . $BTCUSD Daily Chart (log) https://t.co/Odz4b39q0V
AUD/USD Analysis: 2020 Opening Range Filled with Lower Highs and Lows

AUD/USD Analysis: 2020 Opening Range Filled with Lower Highs and Lows

2020-01-08 06:00:00
David Song, Strategist
Share:

Australian Dollar Talking Points

The opening range for 2020 raises the scope for a further decline in AUD/USD as the exchange rate extends the series of lower highs and lows from the start of the month.

AUD/USD Analysis: 2020 Opening Range Filled with Lower Highs and Lows

AUD/USD slips to a fresh weekly low (0.6850) even though Australia Building Approvals jump 11.8% in November, and the exchange rate may continue to give back the advance from the 2019 low (0.6671) as the near-term correction fails to produce a test of the July high (0.7082).

There appeared to be a shift in AUD/USD behavior as it closed above the 200-Day SMA (0.6896) for the first time since 2018, but lack of momentum to hold above the moving average may fuel a further decline in the exchange rate despite the narrowing threat of a US-China trade war.

Forex for Beginners
Forex for Beginners
Recommended by David Song
Forex for Beginners
Get My Guide

It seems as though the US and China, Australia’s largest trading partner, are on track to sign the Phase One trade deal on January 15 as President Donald Trump pledges to visit Beijing at a later date “where talks will begin on Phase Two, and the agreement may spark a bullish reaction in the Australian Dollar as it instills an improved outlook for global growth.

In turn, the Reserve Bank of Australia (RBA) may merely attempt to buy time at its first meeting for 2020, and the central bank may strike an upbeat tone on February 4 as “the Australian economy appears to have reached a gentle turning point.

Image of Reserve Bank of Australia interest rate decisions

It remains to be seen if the RBA will alter the forward guidance over the coming months as officials “assess the evidence of how the easing in monetary policy was affecting the economy,” but Governor Philip Lowe and Co. may continue to emphasize that the board has “the ability to provide further stimulus” as the Trump administration remains reluctant to rollback tariffs.

As a result, the RBA may keep the door open to further insulate the economy, and the central bank may continue to push monetary policy into uncharted territory as the International Monetary Fund (IMF) warns that “unconventional monetary policy measures such as quantitative easing may become necessary.”

With that said, the dovish forward guidance may continue to produce headwinds for the Australian Dollar, and AUD/USD may face a more bearish fate over the coming months as the Federal Reserve moves way from its rate easing cycle.

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

  • AUD/USD has been capped by the 200-Day SMA (0.6900) for most of 2019, but the recent break/close above the moving average signals a potential shift in market behavior especially as the Relative Strength Index (RSI) pushes into overbought territory for the first time since 2018.
  • However, the bullish momentum appears to be abating as the RSI falls back from overbought territory and flashes a textbook sell signal, with the oscillator snapping the upward trend from December.
  • At the same time, AUD/USD has snapped the series of higher highs and lows from late December after failing to close above the 0.7020 (50% expansion) region, with the lack of momentum to test the July high (0.7082) raising the risk for a further decline in the exchange rate.
  • The opening range for 2020 brings the downside targets on the radar for AUD/USD as the exchange rate extends the series of lower highs and lows from the start of the month, but need a close below the 0.6850 (78.6% expansion) region to open up the 0.6800 (61.8% expansion) handle.
  • Next area of interest comes in around 0.6720 (78.6% expansion) to 0.6730 (100% expansion) followed by the Fibonacci overlap around 0.6620 (100% expansion) to 0.6650 (61.8% expansion).
Traits of Successful Traders
Traits of Successful Traders
Recommended by David Song
Traits of Successful Traders
Get My Guide

--- 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