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. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Wall Street
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
More View more
Real Time News
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here:
  • Further your forex knowledge and gain insights from our expert analysts on AUD with our free guide, available today:
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here:
  • 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:
  • 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:
  • The Japanese Yen is eyeing the upcoming Bank of Japan rate decision and CPI figures, but JPY crosses will likely remain dependent on broader market sentiment. Get your weekly $JPY forecast from @FxWestwater here:
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here:
  • Crude and Brent oil are on track to extend higher as Gulf Coast supply disruptions and a positive OPEC report bolster sentiment. Uranium is on a massive surge, aided by the famous Wall Street Bets group. Get your market update from @FxWestwater here:
  • RT @michaeljburry: Read thread.
  • The Australian Dollar has retraced from August lows when looking at AUD/JPY and AUD/CAD. However, the AUD/NZD downtrend is intact, will a reversal there appear as well? Find out:
Risk-Aversion Starts to Pickup as US Dollar Drifts Ahead of Majors

Risk-Aversion Starts to Pickup as US Dollar Drifts Ahead of Majors

Christopher Vecchio, CFA, Senior Strategist

After Friday’s fall, the US Dollar has steadied nicely and retraced around half of its losses. Yesterday’s gains have been consolidated today, with the world’s reserve currency selling off in early-Asia before a return of demand for safety in early-European trade. Whereas the Australian Dollar and the Euro each were boosted by commentary from officials earlier, all the gains have evaporated now that US funds are preparing to return to the market.

Taking a look at the Reserve Bank of Australia Rate Decision last night for a moment, we find it shocking that Governor Glenn Stevens continues to claim that current policy is “appropriate” in the light of a rapidly slowing China. We liken his hubris towards that of European Central Bank President Jean-Claude Trichet last summer, when the ECB actually raised rates in July as the debt crisis started to accelerate out of control. Accordingly, with at least another month until the next RBA decision, the Australian economy looks poised for further downside given its exposure to China.

However, we offer a note of caution: history tends to repeat itself, and if not, it at least rhymes. Consider this: despite the recent downturn in Chinese data, the RBA kept rates on hold last night ahead of the second quarter GDP figure (due on Wednesday) and the August labor market report (due on Thursday). The last time the RBA meeting and these data coincided was back in June – and a surprise RBA hold gave way to significantly stronger growth and labor market figures released in the ensuing days. With this fresh on our mind, we are extremely cautious towards the Australian Dollar ahead of these releases.

Taking a look at credit, rumor has it that ECB President Mario Draghi will unveil a program to buy securities with maturities in the three-year range, which is driving down borrowing costs in Italy and Spain. the Italian 2-year note yield has decreased to 2.391% (-16.3-bps) while the Spanish 2-year note yield has decreased to 3.031% (-35.1-bps). Similarly, the Italian 10-year note yield has decreased to 5.689% (-5.9-bps) while the Spanish 10-year note yield decreased to 6.586% (-20.8-bps); lower yields imply higher prices.


CAD: +0.06%






NZD: -0.39%

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): -0.02% (+0.15% past 5-days)


Risk-Aversion_Starts_to_Pickup_as_US_Dollar_Drifts_Ahead_of_Majors_body_x0000_i1029.png, Risk-Aversion Starts to Pickup as US Dollar Drifts Ahead of Majors

There are a few important data due out this morning, all out of the United States. At 08:58 EDT / 12:58 GMT, the USD Markit US PMI Final for August is due, and is expected to show slight expansion. At 10:00 EDT / 14:00 GMT, the USD ISM Manufacturing and Prices Paid reports are due, with the former moving back to neutral and the latter showing contraction albeit it at a slower pace than in the month prior. Also due then is the USD Construction Spending report for July, expected at +0.4%.


Risk-Aversion_Starts_to_Pickup_as_US_Dollar_Drifts_Ahead_of_Majors_body_Picture_2.png, Risk-Aversion Starts to Pickup as US Dollar Drifts Ahead of Majors

BB represents Bollinger Bands ®

EURUSD: The Bull Flag previously noted within the EURUSD ascending channel/wedge off of the July 24 low has broken to the upside, with a test of 1.2600 line as with potential for 1.2625/35. Still, there is a potential Inverse Head & Shoulders pattern in the works since late-June. Given the Head at 1.2040/45, this would draw into focus 1.2760 (would come amid a major breakout) as long as price holds above 1.2405. Interim resistance comes in at1.2625/35 (former yearly lows, last week’s high) and 1.2660/75 (long-term descending channel resistance). Near-term support comes in at 1.2560, 1.2500, 1.2440/45 (former swing highs), 1.2405 (Neckline), 1.2310/30, 1.2250/65, and 1.2155/70.

Risk-Aversion_Starts_to_Pickup_as_US_Dollar_Drifts_Ahead_of_Majors_body_Picture_4.png, Risk-Aversion Starts to Pickup as US Dollar Drifts Ahead of Majors

USDJPY: The USDJPY closed below the key 78.60 level yesterday for the second consecutive day, exposing former swing lows near 78.10/20, as expected. This level coincides with former June swing lows and a level of resistance for most of July (note the daily wicks above said level but no closes). For now, this is the most important level: potential exists for a rally back into 79.10/20 as long as 78.60 holds, whereas a daily close below suggests a move towards 78.10/20 at the minimum. Penetration of the August low at 77.90 will likely result in a washout to new lows with the potential for 77.65/70 and 77.30.

Risk-Aversion_Starts_to_Pickup_as_US_Dollar_Drifts_Ahead_of_Majors_body_Picture_3.png, Risk-Aversion Starts to Pickup as US Dollar Drifts Ahead of Majors

GBPUSD: The GBPUSD continues to push higher towards topside channel resistance, as expected. We do believe, however, that this is the “final push higher before the next leg lower.” Key levels for the near-term are 1.5880/1.5900 to the upside and 1.5770/90 to the downside; we are continuing to become overextended on shorter-term charts, suggesting that another failure at 1.5900 could lead to profit taking before further bullish price action. A daily close below 1.5770/90 over the coming days should lead to a drop into 1.5700/20. Beyond that, support comes in at 1.5635/40 (last week’s low), and 1.5625 (ascending trendline support off of August 6 and August 10 lows). A daily close above 1.5900 points towards 1.5985.

Risk-Aversion_Starts_to_Pickup_as_US_Dollar_Drifts_Ahead_of_Majors_body_Picture_1.png, Risk-Aversion Starts to Pickup as US Dollar Drifts Ahead of Majors

AUDUSD: The AUDUSD has broken down even further today, fading the entire RBA bounce. With price closing below the 200-DMA for two consecutive days, it appears that a new downtrend is underway. Near-term resistance comes in at 1.0275/90, 1.0345, 1.0420 1.0480, 1.0530/45 (former swing highs, and would also represent a break of the downtrend off of the August 9 high), and 1.0600/15 (August high). Should we see a rally up towards 1.0600 again, another failure would market a Double Top and signal a push for a test of 1.0200/05 (100-DMA). Near-term support comes in at 1.0200/25 (100-DMA, weekly low, 1.618% extension on August 9 high to August 17 low, measured against the August 23 high), 1.0170/75 (late-July swing low) and 1.0100 (mid-July swing low).

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, send an e-mail with subject line "Distribution List" to

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