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
Mixed
Oil - US Crude
Mixed
Wall Street
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
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.55%, while traders in Germany 30 are at opposite extremes with 80.61%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/aC5CZqRzxd
  • Commodities Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Gold: 0.20% Silver: -0.31% Oil - US Crude: -0.34% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/7rkjdGff4Y
  • Euro May Turn Lower vs. US Dollar as Upswing Falters Below 1.20 - https://www.dailyfx.com/forex/technical/home/analysis/eur-usd/2021/04/19/Euro-May-Turn-Lower-vs-US-Dollar-as-Upswing-Falters-Below-1.20.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #EURUSD #technicalanalysis https://t.co/30VPCDfO1B
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.28% 🇦🇺AUD: 0.11% 🇳🇿NZD: 0.08% 🇨🇦CAD: 0.03% 🇨🇭CHF: 0.03% 🇪🇺EUR: 0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/LQnZcITyT6
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.09% France 40: 0.03% FTSE 100: -0.09% US 500: -0.23% Wall Street: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/19eau4SxDU
  • Crude Oil Prices Retreat After Big Rally as Traders Await Fresh Catalysts https://www.dailyfx.com/forex/market_alert/2021/04/19/Crude-Oil-Prices-Retreat-after-Big-Rally-as-Traders-Await-Fresh-Catalysts.html https://t.co/e6PdkgQ2C7
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cvjBS https://t.co/fLokdpFkq0
  • India's Sensex slumps 3% after daily virus cases hit new record - BBG
  • US 10-Year Treasury yields set to continue sliding lower in the near term, after breaching the neckline of a Head and Shoulders pattern. Clearing 1.53% probably paves the way for rates to fulfil the pattern's measured move (1.42), opening the door for #gold to extend gains https://t.co/5RP1EmBiBf
  • Gold Prices Extend Higher on Chinese Demand Boost, Falling Yields https://www.dailyfx.com/forex/market_alert/2021/04/19/Gold-Prices-Extend-Higher-on-Chinese-Demand-Boost-Falling-Yields.html https://t.co/lFYMUZbRkK
AUD/USD Rate Attempts to Retrace Post-NFP Decline to Defend 2021 Low

AUD/USD Rate Attempts to Retrace Post-NFP Decline to Defend 2021 Low

David Song, Strategist

Australian Dollar Talking Points

AUD/USD fails to extend the series of lower highs and lows from the previous week as it attempts to retrace the decline following the US Non-Farm Payrolls (NFP) report, and the exchange rate may continue to defend the 2021 low (0.7564) as the US Dollar still reflects an inverse relationship with investor confidence.

Advertisement

AUD/USD Rate Retraces Post-NFP Decline to Defend 2021 Low

AUD/USD holds above last week’s low (0.7621) to trade in a narrow range, and the broader rise in US Treasury yields appears to be influencing the exchange rate as the Reserve Bank of Australia (RBA) acknowledges that “changes in bond yields globally have been associated with volatility in some other asset prices, including foreign exchange rates.”

Nevertheless, it seems as though the RBA is on a preset course as Governor Philip Lowe and Co. reiterate that “a further $100 billion will be purchased” once the initial government bond purchase program is completed in April, and the wait-and-see approach for monetary policy may keep the Australian Dollar around “the upper end of the range of recent years” as the central bank relies on its balance sheet to achieve its policy targets.

In turn, it remains to be seen if the decline from the February high (0.8007) will turn out to be an exhaustion in the broader trend or a potential shift in AUD/USD behavior as the exchange rate struggles to hold above the 50-Day SMA (0.7730), but the recent weakness in the Australian Dollar has triggered a shift in retail sentiment as traders turned net-long the pair just ahead of March.

Image of IG Client Sentiment for AUD/USD rate

The IG Client Sentiment report shows 52.50% of traders are currently net-long AUD/USD as the ratio of traders long to short stands at 1.11 to 1.

The number of traders net-long is 15.12% higher than yesterday and 9.52% lower from last week, while the number of traders net-short is 20.38% higher than yesterday and 10.82% higher from last week. The decline in net-long interest suggests the flip in retail sentiment could be temporary as 56.92% of traders were net-long AUD/USD last week, while the rise in net-short interest comes as the exchange rate struggles to hold above the 50-Day SMA (0.7730).

With that said, AUD/USD may continue to reflect the bullish price action seen in 2020 as the Federal Reserve stays on track to “increase our holdings of Treasury securities by at least $80 billion per month and of agency mortgage-backed securities by at least $40 billion per month, and the exchange rate may continue to defend the 2021 low (0.7564) as key market themes remain in place.

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

AUD/USD Rate Daily Chart

Image of AUD/USD rate daily chart

Source: Trading View

  • Keep in mind, the AUD/USD correction from the September high (0.7414) proved to be an exhaustion in the bullish trend rather than a change in behavior as the exchange rate traded to fresh yearly highs throughout December.
  • At the same time, developments in the Relative Strength Index (RSI)showed the bullish momentum gathering pace as the indicator pushed into overbought territory for the first time since September, with the break above 70 accompanied by a further appreciation in AUD/USD like the behavior seen in the first half of 2020.
  • However, a textbook RSI sell signal emerged following the failed attempt to test the March 2018 high (0.7916), with AUD/USD trading to fresh 2021 lows in February as it failed to preserve the January range.
  • Nevertheless, the pullback from the January high (0.7820) turned out to be a short lived, with AUD/USD trading to fresh yearly highs to negate the scope for a double-top formation.
  • As a result, the decline from the February high (0.8007) may also be another exhaustion in the broader trend as AUD/USD appears to be defending the 2021 low (0.7564) even as it struggles to hold above the 50-Day SMA (0.7730).
  • Lack of momentum to close below the 0.7630 (38.2% retracement) region may push AUD/USD back towards the Fibonacci overlap around 0.7720 (38.2% expansion) to 0.7760 (23.6% expansion), with the next area of interest coming in around 0.7880 (38.2% expansion) followed by the 0.7930 (50% retracement) to 0.7950 (50% expansion) zone.
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