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
Oil - US Crude
Bearish
Wall Street
Bullish
Gold
Bullish
GBP/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
USD/JPY
Bearish
More View more
Real Time News
  • #Bitcoin prices may see a pickup in volatility ahead of the 2020 halving as the #coronavirus pandemic threatens to disrupt cross-continental $BTC mining operations. Get your market update from @ZabelinDimitri here: https://t.co/BoH24MVf4P https://t.co/yuEA4wdlS9
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.06% 🇳🇿NZD: -0.05% 🇨🇦CAD: -0.17% 🇨🇭CHF: -0.48% 🇯🇵JPY: -0.61% 🇬🇧GBP: -0.87% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/hOyPH71ZfE
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Germany 30: 1.85% France 40: 1.47% US 500: 0.46% Wall Street: 0.38% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/UxILaRvSdH
  • 🇨🇭 CHF Retail Sales Real (YoY) (FEB), Actual: 0.3% Expected: N/A Previous: -0.1% https://www.dailyfx.com/economic-calendar#2020-03-31
  • Missed today's #AUDUSD weekly outlook webinar? See the recording here - https://t.co/6k1KCuxr50 Some of the topics discussed were: - #coronavirus economic impact - #Fed #QE as catalyst for AUD rise - scope for renewed #USD gains
  • RT @DailyFXEspanol: Análisis del $XAUUSD: El precio del oro se estanca, ¿qué nos dice el gráfico? #trading #covid19 https://t.co/7x2Zdt0AnA…
  • USD/CAD IG Client Sentiment: Our data shows traders are now net-long USD/CAD for the first time since Jan 22, 2020 when USD/CAD traded near 1.31. A contrarian view of crowd sentiment points to USD/CAD weakness. https://www.dailyfx.com/sentiment https://t.co/KjIkTKOFmC
  • Asia’s vast and growing importance to the world economy is not yet matched by the presence of a currency trading center to rival the established order. Get your update on market drivers in Asia here: https://t.co/r3Ku0p9dw1 https://t.co/JVzLj6lON7
  • European Opening Calls From IG: #FTSE 5558 -0.10% #DAX 9865 +0.50% #CAC 4394 +0.35% #AEX 476 -0.08% #MIB 16974 +0.60% #IBEX 6749 +1.34% #OMX 1457 +0.52% #STOXX 2779 +0.49%
  • Heads Up:🇨🇭 CHF Retail Sales Real (YoY) (FEB) due at 06:30 GMT (15min), Actual: N/A Expected: N/A Previous: -0.1% https://www.dailyfx.com/economic-calendar#2020-03-31
AUD/USD Rate Rebound Pulls RSI Out of Oversold Territory

AUD/USD Rate Rebound Pulls RSI Out of Oversold Territory

2020-03-05 01:00:00
David Song, Strategist
Share:

Australian Dollar Talking Points

AUD/USD extends the rebound from the yearly low (0.6434) even though the Reserve Bank of Australia (RBA) cuts the official cash rate (OCR) to a fresh record low of 0.50%, and the exchange rate may stage a larger rebound over the coming days as the bearish momentum abates.

AUD/USD Rate Rebound Pulls RSI Out of Oversold Territory

AUD/USD retraces the decline from the previous month after trading at its lowest level since 2009, and reaction to the RBA rate cut suggests the 25bp reduction was not enough for market participants to dump the Australian Dollar as the central bank states that the “Australian Government has also indicated that it will assist areas of the economy most affected by the coronavirus.

It seems as though the RBA is in no rush to push the official cash rate (OCR) to the effective lower bound (ELB) of 0.25% even though the “Board is prepared to ease monetary policy further to support the Australian economy,” and it remains to be seen if Governor Philip Lowe and Co. will implement another rate cut at the next meeting on April 7 as “the Australian economy is expected to return to an improving trend” once COVID-19 is contained.

Image of ASX Cash Rate futures

Expectations for a fiscal stimulus package may push the RBA to the sidelines as Treasurer Josh Frydenberg insists that the program “is going to have a 'b' in front of it,” but the ASX 30 Day Interbank Cash Rate Futures reflect a 100% probability for another 25bp rate cut as the central bank warns “GDP growth in the March quarter is likely to be noticeably weaker than earlier expected.

With that said, the Australian Dollar may face headwinds ahead of the next RBA meeting, but recent price action raises the scope for a larger rebound in AUD/USD as the Relative Strength Index (RSI) bounces back from oversold territory and breaks out of the bearish formation from earlier this year.

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

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 monthly opening range has been a key dynamic for AUD/USD in the fourth quarter of 2019 as the exchange rate carved a major low on October 2, with the high for November occurring during the first full week of the month, while the low for December materialized on the first day of the month.
  • The opening range for 2020 showed a similar scenario as AUD/USD marked the high of the month on January 2, with the exchange rate carving the February high during the first week of the month.
  • With that said, the opening range for March remains in focus, and the bearish momentum may continue to abate over the coming days as the Relative Strength Index (RSI) bounces back from oversold territory and snaps the bearish formation from earlier this month.
  • The failed attempt to break/close below the 0.6410 (100% expansion) to 0.6440 (261.8% expansion) region has pushed AUD/USD back above the Fibonacci overlap around 0.6510 (161.8% expansion) to 0.6570 (23.6% retracement), but need a move above the 0.6620 (100% expansion) to 0.6660 (38.2% retracement) region to open up the overlap around 0.6720 (78.6% expansion) to 0.6730 (50% retracement).
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

News & Analysis at your fingertips.