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
Subscribe
Please try again
EUR/USD
Bullish
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
Bullish
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
Gold
Mixed
GBP/USD
Bullish
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
Mixed
More View more
Real Time News
  • Trading Forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Learn about these principles in depth here: https://t.co/lZFM8youtX https://t.co/p9Pkkbo2zf
  • The docket thins out over the coming week, but there are a few serious market highlights that can make for some interesting opportunities in the week ahead. $GBPUSD has the technical chops and fundamental confluence (US CPI, UK GDP, etc) https://www.dailyfx.com/forex/video/daily_news_report/2021/05/08/Dollar-Tumbles-Dow-Hits-Record-Highs-and-Dogecoin-Traders-Tune-In.html https://t.co/BMUQ0xVOge
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfIZNKr https://t.co/nBfJcptUDK
  • Dogecoin continues to trade higher with explosive energy, attesting to the cryptocurrency's new clout. Meanwhile, Bitcoin and Ethereum sink. Get your market update from @FxWestwater here:https://t.co/ohw714KqB2 https://t.co/EWxKoQykv1
  • Natural gas prices moved higher, capturing a long-term trendline that could support the heating commodity's price in the coming weeks as colder temps support fundamental side. Get your market update from @FxWestwater here:https://t.co/tGUDJE9hn0 https://t.co/nROsrJa1sv
  • The Euro may fall against the US Dollar amid a historically strong month for the Greenback and relative bond yield spreads. EUR/USD appears to be eyeing bearish technical warning signs. Get your $EURUSD market update from @ddubrovskyFX here:https://t.co/njTDk8Ehoi https://t.co/w4II63utz1
  • The US Dollar is still struggling against most ASEAN currencies. USD/SGD remains downside-focused despite recent gains. USD/THB is eyeing a triangle. USD/IDR and USD/PHP may point lower. Get your market update from @ddubrovskyFX here:https://t.co/6Nvvmz8h6d https://t.co/TYsfOXHrro
  • (Weekly Fundamental) Australian Dollar Outlook: AUD/USD May Rise on Dovish Fed Speak After Huge NFP Miss #AUD $AUDUSD https://www.dailyfx.com/forex/fundamental/forecast/weekly/aud/2021/05/07/Australian-Dollar-Outlook-AUDUSD-May-Rise-on-Dovish-Fed-Speak-After-Huge-NFP-Miss.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/L9pERwjTqh
  • Bitcoin is struggling to extend April’s bounce while Ethereum and Litecoin are exhibiting signs of momentum exhaustion. What are key technical levels to watch for ahead? Find out from @ddubrovskyFX here:https://t.co/PnZId4xOh2 https://t.co/ZTYoxdBxLl
  • The Indian Rupee has been rising despite a surge in local Covid cases, owing to rising yields amid a temporary flood of US Dollars into the banking system. INR remains at risk, eyeing CPI data. Get your market update from @ddubrovskyFX here:https://t.co/6r7hahVtx4 https://t.co/a0z46Q0Mn4
AUD/USD Rebound to Gather Pace as RSI Shows Bearish Momentum Abating

AUD/USD Rebound to Gather Pace as RSI Shows Bearish Momentum Abating

David Song, Strategist

Australian Dollar Talking Points

AUD/USD extends the rebound from the September low (0.7006) as the Relative Strength Index (RSI) reverses from oversold territory, and the indicator may show the bearish momentum abating as it appears to be on the cusp of snapping the downward trend carried over from the previous month.

Advertisement

AUD/USD Rebound to Gather Pace as RSI Shows Bearish Momentum Abating

AUD/USD extends the series of higher highs and lows from earlier this week to largely track the recovery in global equity prices, and a further improvement in investor confidence may prop up the exchange rate as key market trends look poised to persist in October.

Meanwhile, looming developments in the RSI may indicate that the pullback from the yearly high (0.7414) was an exhaustion in the bullish price action rather than a change in trend as the oscillator threatens trendline resistance and appears to be breaking out of the downward trend established in September.

Looking ahead, it remains to be seen if the upcoming Reserve Bank of Australia (RBA) meeting will influence the exchange rate as the central bank is expected cut the official cash rate (OCR) to a fresh record low.

Image of ASX 30 Day Interbank Cash Rate Futures

Source: ASX

In fact, the ASX 30 Day Interbank Cash Rate Futuresstill reflect a greater than 60% probability for a rate cut on October 6 even though Treasurer Josh Frydenberg is scheduled to deliver the federal budget update on the same day.

Another round of monetary stimulus may produce headwinds for the Australian Dollar as the RBA relies on its non-standard measures to support the economy, but Governor Philip Lowe and Co. may stick to the sidelines after tweaking the Term Funding Facility (TFF) in September as the government extends fiscal stimulus programs like the Jobkeeper Payment until March 28, 2021.

Until then, swings in trader sentiment may sway AUD/USD as the Federal Reserve’s balance sheet sits at its highest level since June, and the recent shift in retail positioning appears to have been a temporary event like the pullback in the exchange rate as traders turn net-short in October.

Image of IG Client Sentiment for AUD/USD rate

The IG Client Sentiment report shows 48.88% of traders are currently net-long AUD/USD, with the ratio of traders short to long at 1.05 to 1. The number of traders net-long is 13.25% lower than yesterday and 2.30% higher from last week, while the number of traders net-short is 12.61% higher than yesterday and 3.43% higher from last week.

The recent decline in net-long position could be indicative of profit-taking behavior as AUD/USD extends the rebound from the September low (0.7006), but the rise in net-short interest suggests key market trends will persist over the coming days as the crowding behavior from earlier this year appears to be returning.

With that said, the pullback from the yearly high (0.7414) may turn out to be an exhaustion in the bullish price action rather than a change in trend, and the Relative Strength Index (RSI) may show the bearish momentum abating as it appears to be on the cusp of snapping the downward trend carried over from the previous month.

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.
  • The RSI instilled a bullish outlook for AUD/USD during the same period 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 emerged as the indicator quickly slipped back below 70.
  • The RSI established a downward trend in September as the indicator fell to its lowest level since April, but the bearish momentum seems to be abating as the RSI fails to push into oversold territory to reflect the extreme readings seen in March.
  • Will keep a close eye on the RSI as it comes up against trendline resistance after briefly slipping below 30, with the break of the downward trend indicating that the pullback from the yearly high (0.7414) was an exhaustion in the bullish price action rather than a change in trend.
  • The close back above the Fibonacci overlap around 0.7090 (78.6% retracement) to 0.7140 (23.6% retracement) has pushed AUD/USD up against the 0.7180 (61.8% retracement) region, with the next area of interest coming in around 0.7270 (23.6% expansion).
  • Need a break/close above 0.7270 (23.6% expansion) to bring the 2020 high (0.7414) back on the radar, which largely lines up with the overlap around 0.7370 (38.2% expansion) to 0.7390 (38.2% expansion).

--- 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