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
Bullish
Wall Street
Mixed
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • The Nasdaq 100-tracking QQQ ETF saw more than -$3.4 billion leave its coffers on Friday. Get your #Nasdaq market update from @PeterHanksFX here: https://t.co/NZWg2XrEuD https://t.co/S9uxEGzJjJ
  • The $QQQ ETF recently saw its largest outflow, followed by its largest inflow since October 2000 What does this mean for the Nasdaq? Read more - https://www.dailyfx.com/forex/market_alert/2020/09/22/Nasdaq-100-Forecast-Exodus-from-Tech-ETF-Has-Worrisome-Historical-Parallel.html?ref-author=phanks&QPID=917701&CHID=9 https://t.co/bS0V5IsS6Z
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.05% 🇳🇿NZD: -0.49% 🇪🇺EUR: -0.55% 🇨🇭CHF: -0.58% 🇬🇧GBP: -0.62% 🇦🇺AUD: -0.74% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/2JBbEKosO9
  • South African Rand clawing back yesterday’s depreciation against the US Dollar. Get your $USDZAR market update from @WVenketas here: https://t.co/9XCvJgRisU https://t.co/qk5KR4DncU
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.17% Gold: -0.57% Silver: -1.20% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/UPpRZN6FET
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.45%, while traders in NZD/USD are at opposite extremes with 69.16%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/JExLntdypk
  • Strong quarter from Nike - Revenue: $10.59B vs $9.11B exp - EPS: $0.95 vs $0.47 exp - However, Nike noted continued Y/Y declines in physical retail traffic - $NKE shares jump more than 8% in after-hours
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.59% Germany 30: 0.39% France 40: 0.38% US 500: 0.00% Wall Street: 0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/xEWK3sBQzR
  • Australian Dollar has broken parallel support and remains at risk for further losses within the broader June uptrend. Get your $AUDUSD technical analysis from @MBForex here:https://t.co/gTmlLX5t06 https://t.co/zCN6wwnKzC
  • Based on today's chart of the #Nasdaq, do you think we are seeing the beginning of a recovery or just a temporary pause before a deeper decline?
AUD/USD Rate Forecast: 2020 High on Radar Following RBA Minutes

AUD/USD Rate Forecast: 2020 High on Radar Following RBA Minutes

2020-09-16 05:15:00
David Song, Strategist
Share:

Australian Dollar Talking Points

AUD/USD tagged a fresh weekly high (0.7343) as the Reserve Bank of Australia (RBA) Minutes offered little hints for additional monetary support, and the Federal Reserve interest rate decision may keep current market trends in place as the central bank plans to “achieve inflation that averages 2 percent over time.”

AUD/USD Rate Forecast: 2020 High on Radar Following RBA Minutes

AUD/USD may continue to retrace the decline from the 2020 high (0.7414) as the RBA Minutes suggest the central bank will rely on its current tools to support the economic recovery, and Governor Philip Lowe and Co. may stick to the sidelines after tweaking the Term Funding Facility in September as “members agreed that the Board's policy package implemented in mid March was continuing to support the Australian economy.

It seems as though the RBA is in no rush to deploy additional monetary measures even though the Governor Lowe and Co. “consider how further monetary measures could support the recovery” as the central bank relies on its yield-target program, with the board insisting that “further purchases should be undertaken as necessary to maintain the target.

Image of DailyFX economic calendar for Australia

In turn, it remains to be seen if the update the Australia’s Employment report will influence the monetary policy outlook as the economy is expected to shed 50K jobs in August, but the macroeconomic environment may keep AUD/USD afloat ahead of the next RBA rate decision on October 6 as the Federal Reserve plans to “achieve inflation that averages 2 percent over time.

As a result, the update to the Summary of Economic Projections (SEP) may sway the near-term outlook for AUD/USD if the interest rate dot-plot may shows a downward revision in the longer-run forecast, but more of the same from the June meeting may spark a limited reaction as Chairman Jerome Powell and Co. vow to “increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace.

Looking ahead, current market trends may remain in place as the RBA rules out a negative interest rate policy (NIRP) for Australia, and the crowding behavior in AUD/USD may carry into the end of the month as retail traders have been net-short the pair since April.

Image of IG Client Sentiment for AUD/USD rate

The IG Client Sentiment report shows 44.86% of traders are net-long with the ratio of traders short to long at 1.23 to 1. The number of traders net-long is 1.56% higher than yesterday and 3.17% lower from last week, while the number of traders net-short is 4.07% lower than yesterday and 4.43% higher from last week.

The recent rise in net-long position has helped to alleviate the tilt in retail sentiment as only 41.74% of traders were net-long AUD/USD earlier this week, but the crowding behavior looks poised to persist even though the exchange rate trades to a fresh yearly (0.7414) high in September.

With that said, AUD/USD may continue to exhibit a bullish trend as it reverses course ahead of the 50-Day SMA (0.7176), and the Relative Strength Index (RSI) may show the bullish momentum gathering pace as it climbs towards overbought territory.

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by David Song
Learn More About the IG Client Sentiment Report
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 advance from the 2020 low (0.5506) gathered pace as AUD/USD broke out of the April range, with the exchange rate clearing the January high (0.7016) in June as the Relative Strength Index (RSI) pushed into overbought territory.
  • AUD/USD managed to clear the June high (0.7064) in July even though the RSI failed to retain the upward trend from earlier this year, with the exchange rate pushing to fresh yearly highs in August and September to trade at its highest level since 2018.
  • Recent developments in the RSI instilled a bullish outlook for AUD/USD as it threatened the downward trend from earlier this year to push into overbought territory for the fourth time in 2020, but a textbook sell-signal has emerged as the indicator quickly slipped back below 70.
  • In turn, AUD/USD may continue to track the monthly range following the failed attempt to test the July 2018 high (0.7484), but the exchange rate appears to have reversed course ahead of the 50-Day SMA (0.7176) as it largely preserves the upward trend established in June.
  • Will keep a close eye on the RSI as it climbs towards overbought territory, with a move above 70 likely to be accompanied by a further appreciation in AUD/USD like the behavior seen in June.
  • Until then, the rebound from the monthly low (0.7192) may gather pace as AUD/USD holds above the 0.7270 (23.6% expansion) region, with the Fibonacci overlap around 0.7370 (38.2% expansion) to 0.7390 (38.2% expansion) back on the radar as the exchange rate clings to trendline support.
  • Need a break of the 2020 high (0.7414) to open up the 0.7480 (50% expansion) region, with the next area of interest coming in around 0.7560 (50% expansion) to 0.7590 (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