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
Bullish
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
USD/JPY
Mixed
More View more
Real Time News
  • The recent rebound in USD/CAD appears to be stalling ahead of the Federal Reserve’s first meeting for 2021 as it quickly pulls back from a fresh weekly high (1.2782). Get your $USDCAD market update from @DavidJSong here:https://t.co/km0dY2MQ7w https://t.co/wHm6YVqvAs
  • White House plans call with congressional problem solvers caucus on Tuesday to discuss $1.9trillion COVID-19 stimulus bill
  • $GBPCHF has strengthened today, rising from a morning low around 1.2105 to currently trade around 1.2190. The pair is currently testing its highest levels since the onset of the Covid pandemic. $GBP $CHF https://t.co/q2bH28zYi6
  • ECB's Villeroy says we monitor carefully the implications of the exchange rate on the inflation outlook $EUR
  • Forex Update: As of 15:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.63% 🇦🇺AUD: 0.49% 🇬🇧GBP: 0.42% 🇪🇺EUR: 0.29% 🇨🇭CHF: 0.15% 🇯🇵JPY: 0.13% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/SuCtbOvRLU
  • Poll: Which of these extraordinarily volatile and recently popular assets is most disconnected from 'traditional fundamentals' and fully in the hands of the speculative tribe?
  • Indices Update: As of 15:00, these are your best and worst performers based on the London trading schedule: Germany 30: 2.01% France 40: 1.51% FTSE 100: 0.51% Wall Street: 0.15% US 500: 0.09% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/6OgqApsW9T
  • The Conference Board's Consumer Confidence survey edged up with this morning's January reading, but that marginal uptick can't touch the impressive charge of speculative conviction via the likes of the $SPX https://t.co/zztL1tzlfE
  • $AUDUSD has strengthened by around 50 pips this morning, climbing from a morning low below 0.7700 to currently trade around 0.7750, its highest level since last week. $AUD $USD https://t.co/UDJ8i9mifv
  • Italian PM Conte has informed his cabinet that he will resign, which has come ahead of the Senate vote on the justice minister’s annual report, where there had been a risk of a government defeat. Get your market update from @JMcQueenFX here:https://t.co/U3ZTcYF3BH https://t.co/GIZLlT2a5I
AUD/USD Price Outlook: US Dollar Reverses on Powell Speculation

AUD/USD Price Outlook: US Dollar Reverses on Powell Speculation

Rich Dvorak, Analyst

US DOLLAR FORECAST: AUD/USD PRICE PIVOTS LOWER, FED CHAIR POWELL CONFERENCE & NEGATIVE INTEREST RATE COMMENTARY IN FOCUS

  • AUD/USD pressured lower ahead of a speech from Fed Chair Powell later this week
  • US Dollar reversal attempt looks driven by a recalibration of FOMC interest rate expectations
  • Spot AUD/USD price action also set to follow the ebb and flow of trader risk appetite

AUD/USD is drifting to the downside as the new trading week gets underway. The Australian Dollar surged more than 15% from its March 18 swing low relative to its US Dollar peer, but AUD/USD price action looks set to face a pivotal test, and could be on the cusp of a broader reversal lower.

AUD/USD BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -7% 7% 1%
Weekly -19% 9% -6%
What does it mean for price action?
Get My Guide

AUD/USD has dropped by about 60-pips since Friday’s close. Recent weakness in spot AUD/USD seems to follow a far-reaching US Dollar rebound on the back of changes in Federal Reserve interest rate expectations.

AUD/USD PRICE CHART: 4-HOUR TIME FRAME (01 APRIL TO 11 MAY 2020)

AUDUSD Price Chart US Dollar Forecast

The implied Fed funds rate flipped negative last week, but since a last-minute speech from Fed Chair Jerome Powell was scheduled for Wednesday, May 13 at 13:00 GMT, benchmark US interest rates have started to edge higher. That said, Fed rhetoric regarding negative interest rate policy, or NIRP, has potential to weigh materially on the US Dollar and AUD/USD price action going forward.

This is considering interest rate differentials contribute largely to fundamental underpinnings of the currency carry trade. Powell could fuel an extended rise in the US Dollar against other major currencies if the Fed Chair pushes back on the prospect of implementing negative interest rates in the United States.

Forex for Beginners
Forex for Beginners
Recommended by Rich Dvorak
Forex for Beginners
Get My Guide

Potential downside in AUD/USD prices could also follow a deterioration in trader risk appetite as coronavirus optimism stalls. Additionally, bearish divergence indicated by the RSI on a 4H candlestick AUD/USD price chart suggests a pullback may loom.

AUD/USD PRICE CHART: DAILY TIME FRAME (31 DECEMBER 2019 TO 11 MAY 2020)

AUD USD Price Chart US Dollar Technical Analysis

AUD/USD might continue to drift lower toward the 0.6400 price level where month-to-date lows currently reside. This comes subsequent to a rejection at the April 30 swing high near 0.6560, which looks to serve as technical resistance going forward.

Traits of Successful Traders
Traits of Successful Traders
Recommended by Rich Dvorak
Traits of Successful Traders
Get My Guide

If Fed Chair Powell suggests an openness to adopting NIRP as a new unconventional monetary policy tool, however, it may correspond with aggressive US Dollar selling pressure. If materialized, this could help AUD/USD climb toward technical confluence residing around the 0.6690 mark in turn.

Nevertheless, spot AUD/USD remains at risk of a experiencing another sharp drop and potential test of key technical support levels. This is in light of the likely unavoidable coronavirus recession that lingers and still threatens to damage market sentiment. AUD/USD price action also faces notable downside risk from a fresh Trump tariff threat to China.

Read More: US Dollar, Gold, Dow Jones React to Catastrophic NFP Report

-- Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES