68c is the next line in the sand on AUD/USDThe Aussie has seen an impressive short-covering rally over the last couple of weeks, where large speculators were had their most bearish net-exposure since September. Another ‘surprise’ RBA hike (to some…), calls for a Fed pause, stimulus from China and higher have helped it recoup losses sustained since the May high. And our attention now shifts to the FOMC meeting and tomorrow’s Australian employment report to see where it will go next.
The fact the rally has stalled around 68c makes sense, as this is the area it has struggled to hold above since the RBA paused their tightening cycle back in July. We have seen four failed attempts to close above 68c on the daily chart, and nine failed attempts to close above 0.6782 since that meeting – which makes this a pivotal zone for traders to focus on.
It’s not impossible to expect the Fed will be more hawkish than some anticipated despite weaker inflation, given there’s no appetite to deliver a dovish punchline with inflation still at historically high levels. But that could help AUD/USD break beneath yesterday’s bearish hammer and head towards the 0.6700 / 0.67100 zone, especially if Australia’s employment report comes in soft tomorrow (which reduced pressure on the RBA to hike).
But if the Fed surprise with a dovish pause and AU employment is strong, then a break (and daily close) above 68c seems feasible as bears ‘caught short’ continue to capitulate and bulls bet on another RBA hike.
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For Trade War Pulse Proxy, Look to AUDUSDI wrote quite a bit about overall trade war sentiment here and in general I still do think that in spite of the influence officials may have on this pair it still may react negatively to trade war sentiment, but probably much more on potential capital flows if tariffs are put back into place.
But the easier way to find a relationship between trade war sentiment and markets is the proxy of AUDUSD. This price movement is much more reflective of that sentiment, which is rhetorically breaking down, since Australia's economy is much more dependent upon China's economy than most countries or major currency pairs.
For this pair, my forecast is with the trend in that it continues down in spite of Fed doveishness. Still trailing under the 200 day exponential moving average and RSI in addition to stochastic suggest we should sell. If you like this assessment and prefer a bit more analysis on financial matters, then please check out more of my content here www.anthonylaurence.wordpress.com
AUD/NZD GREAT BUYING OPPORTUNITY Buy Limits at the house. Stop loss below yellow box (stop hunt).
PEOPLE WE HAVE TO REALIZE THAT WE REACH POINTS IN OUR LIFE WHEN WE SAY WE ARE COMFORTABLE (hONEY ImMmm HOMEE!) ONLy To RealziE THAT WE NEED TO BREAK OUT But you know what happens?! We run out of steam because we didnt PUSH IT TO THE LIMITS > So we retrace ONLY TO FIND NEW STEAM > ENOUGH TO BREAK OUT OF OUR OLD SELF AND TRANSFORM INTO A FIREBALL OF OVERCHARGED Energy not willing to surrender to the Resistance.
Amen.