AU Index Rallies from Demand Area as Bullish Sentiment GrowsThe AU Index experienced a significant development yesterday as it reached a key demand area, showing a strong rejection today that indicates potential bullish momentum. This demand zone, identified through technical analysis, has historically served as a pivotal point for price action, suggesting an opportunity for a price turnaround. With the opening candle reflecting a robust rejection of lower levels, traders are increasingly optimistic about the possibility of a bullish trend emerging in the coming months.
From a technical standpoint, this demand area presents a solid foundation for potential upward movement. The absence of follow-through selling and the strength of the rejection signal that buyers are stepping in to support the price. When coupled with historical seasonality patterns, which indicate a likelihood of gains during this period, there is a compelling case for a bullish outlook on the AU Index. Historical trends suggest that this time frame has often led to price rallies, providing further confirmation for those considering long positions.
On the fundamental side, the insights from the Commitment of Traders (COT) report paint an interesting picture. While retail traders are predominantly bearish, indicating a cautious sentiment among the broader market participants, the smart money narrative tells a different story. Institutional investors appear to be either bullish or in the early stages of building long positions, which can be a telling signal for future price action. This divergence between retail bearishness and institutional buying often creates an environment ripe for a market reversal, particularly as the smart money tends to lead rather than follow market trends.
Given these dynamics, traders are now on the lookout for a long setup on the AU Index. Emphasizing risk management and entry strategies will be essential in this endeavor. With the price showing resilience at the demand area and fundamental signals suggesting a shift towards bullishness, there is a growing confidence that the AU Index may be poised for a sustained rally.
In conclusion, the confluence of technical indicators, seasonal patterns, and the contrasting sentiments present in the COT report presents an enticing opportunity in the AU Index. As traders position themselves for potential gains, the next few sessions will be crucial in determining whether this demand area will indeed act as a launchpad for a bullish trend in the months ahead. Investors will be closely monitoring price movements, looking for confirmation to validate their long strategies in what could be an exciting period for this index.
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Aussiedollar
WEEKLY FOREX FORECAST SEPT 7-11th: AUDUSDAUD | AUDUSD:
Look at the Weekly TF. Price is sitting in the +FVG, therefore my bias for the week is bullish.
I'm only interested in longs at this point.
Should price close hard below the +FVG, then that invalidates my bias. I will start to look for sell setups.
Check the comments section below for updates regarding this analysis throughout the week.
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AUDCAD Long - SLs Patiently Waiting To Get DestroyedWell, there is not much to be explained besides of: Look at the weekly and the higher lows. How much of confirmation do you need, that we want to attack the upper range? Look at the 4h and tell me what you see? I see dozens of Shorts trapped and begging to stay alive. Green line needs to hold to validate this idea. Good luck.
Aussie dollar strengthens as RBA moves opposite with Fed
The RBA is less likely to cut rates as Australia's labor market remains tight. Australia's Aug Unemployment Rate held steady at 4.2%, while labor participation surged to a record high of 67.1%. Australian Treasurer Jim Chalmers emphasized that the increasing number of jobs and opportunities for Australians is a very encouraging development. The RBA also clarified that inflation could continue to decrease if the Unemployment Rate increases further. As the RBA continues to uphold its hawkish stance while the Fed declares a 0.50% rate cut, the Aussie dollar may persist in its upward trajectory.
AUDUSD extended its uptrend, breaching the psychological resistance at 0.6800. The price rose above both EMAs, while EMA21 widened the gap with EMA78, sending a bullish signal.
If AUDUSD sustains its uptrend while holding above EMA21, the price could gain upward momentum toward the 0.6870 high. Conversely, if AUDUSD fails to hold above EMA21 and breaks the support at 0.6730, the price may fall further to the 0.6640 level.
Aussie dollar strengthens as RBA moves opposite with Fed
The RBA is less likely to cut rates as Australia's labor market remains tight. Australia's Aug Unemployment Rate held steady at 4.2%, while labor participation surged to a record high of 67.1%. Australian Treasurer Jim Chalmers emphasized that the increasing number of jobs and opportunities for Australians is a very encouraging development. The RBA also clarified that inflation could continue to decrease if the Unemployment Rate increases further. As the RBA continues to uphold its hawkish stance while the Fed declares a 0.50% rate cut, the Aussie dollar may persist in its upward trajectory.
AUDUSD extended its uptrend, breaching the psychological resistance at 0.6800. The price rose above both EMAs, while EMA21 widened the gap with EMA78, sending a bullish signal.
If AUDUSD sustains its uptrend while holding above EMA21, the price could gain upward momentum toward the 0.6870 high. Conversely, if AUDUSD fails to hold above EMA21 and breaks the support at 0.6730, the price may fall further to the 0.6640 level.
AUD/USD: Watch for a Reversal with RBA Decision AUD/USD continues to hit new yearly highs as risk sentiment improves following the FOMC’s 50-basis-point rate cut last week and today’s Reserve Bank of Australia (RBA) meeting, where no rate change is expected.
However, a dovish tilt from the RBA meeting notes could shift the pair’s momentum, with the 200-Day Moving Average acting as a key level to watch. Also, keep an eye on the RSI, which is nearing the overbought zone at 70 on the daily chart.
Beyond the RBA decision later today, Australian inflation data is set for release tomorrow, with headline inflation expected to drop sharply from 3.5% to 3.1%.
RBA Decision: Can Bulls Break 0.6900? RBA Decision: Can Bulls Break 0.6900?
The U.S. Federal Reserve's decision to slash interest rates by half a percentage point this week has intensified scrutiny on the Reserve Bank of Australia (RBA), which will hold its policy meeting next week.
Making a RBA’s interest rate cut less likely in the short term: Australia's labor market delivered stronger-than-expected job growth in August. Maybe this is why the AUDUSD has printed a nine-month high earlier today, creating the fourth consecutive green candle.
However, underlying weaknesses are emerging, as the gains were driven by part-time employment, with full-time jobs declining.
Should this momentum continue, AUD/USD could potentially test 0.6900 resistance, a high last seen in late 2023.
Navigating RBA Hawkishness and Economic Red Flags
R1 0.6799– 11 July high – Strong
R2 0.6753 – 21 August high– Medium
S1 0.6637 – 19 August low– Medium
S2 0.6563 – 15 August low – Strong
This week's RBA Minutes came out confirming the recent more hawkish leaning RBA decision. The central bank hinted at the fact that the cash rate would stay where it is for an extended period of time, while the possibility of additional tightening was also discussed. We've also seen the Australian Dollar getting added help from risk on flow and broad based US Dollar selling. There is some cause for concern however, after the Commonwealth Bank was out calling for a quicker deterioration in the Australian economy than the RBA. The Commonwealth Bank sees an RBA rate cut in November. Key standouts on Wednesday’s calendar come from UK public finances, Canada producer prices, and the Fed Minutes.
AUD/USD Eyes Key Data After Breaking 0.6600AUD/USD Eyes Key Data After Breaking 0.6600
The AUD/USD extended its rally passed the critical 0.6600 mark to hit new three-week highs. Traders now turn their attention to the upcoming Australian Consumer Inflation Expectations and Unemployment.
The pair faces immediate resistance at the 200-day moving average, followed by the 0.668 level. On the downside, initial support could be the 100-day moving average, with further backing at the 50-day moving average.
In the U.S., the spotlight shifts to the July Consumer Price Index (CPI) due Wednesday.
Earlier today, the Producer Price Index (PPI) data showed a 2.2% year-over-year increase for July, down from the 2.7% rise in June. PPI often acts as an early indicator for upcoming CPI inflation.
Market participants are currently pricing in a roughly 54% chance of a 50-basis-point Fed rate cut in September, a probability that could increase following the PPI data.
AUD/USD rising gently towards resistance – buyer beware?Hawkish comments from RBA’s governor have provided a tailwind for AUD/USD today, after she said that the central bank would not hesitate to hike rates if needed. This is all very well, but with the Fed in easing mode and the RBNZ potentially cutting next week, the probability of an RBA hike seems low. But her words have allowed the Aussie to have another crack at Wednesday’s high, but so far it has the hallmark of a ‘last hurrah’.
A 50% retracement level between the July high and August low provided resistance for yesterday’s bearish pinbar. And even if prices break above this high, the 200-day MA hovers overhead at the 66c handle. And given the 2-day RSI looks set to close in the overbought zone (although yet to be confirmed), we like the looks of fades within the 0.6570 – 0.6660 area for a swing trade short.
Resistance on AUD/USD Ahead of CPI InflationThe AUD/USD currency pair (Australian dollar versus the US dollar) is on track to snap a two-month winning streak. It is down nearly -2.0% month to date, largely driven by risk sentiment.
Monthly and Daily Resistance Levels
Technically, the AUD/USD faded monthly resistance at $0.6670, which combines with the upper boundary of a symmetrical triangle, or ‘coil’, taken from $0.7158 and $0.6170. Adding ‘technical’ weight to said resistances is the Relative Strength Index (RSI) remaining south of the 50.00 centreline since April 2022, indicating negative momentum.
On the daily timeframe, last week’s precipitous decline breached several key support levels, including $0.6580 and $0.6591, leaving both levels open for a retest this week. Another notable observation is the scope to continue exploring deeper water until reaching support from $0.6488 (you will note that this area also represents Quasimodo support).
Price Direction
Overall, the trend direction is relatively difficult to define at the moment. Therefore, recent downside sentiment, coupled with daily resistance, could be something sellers show interest in if tested, targeting daily support at $0.6488.
As a note, do remain aware that we have Aussie Consumer Price Index (CPI) inflation out on Wednesday. These numbers have proven rather sticky in 2024, leading the Reserve Bank of Australia to strike a hawkish tone in recent meetings – a 20% chance of a hike is currently priced in for the August meeting.
Should inflation come in hotter than expected this week, this could see rate-hike expectations increase and would place current daily resistance in a tricky spot. On the flip side, current resistance could be worthy of attention should a downside surprise in data materialise.
AUD breaking out of downtrendAUD/USD Breaks Key Resistance
Overview:
The FX:AUDUSD pair has shown significant signs of a trend reversal after being in a downtrend since 2021. The pair reached a low just below $0.62 and has since made a strong recovery.
Key Technical Points:
1. Trend Reversal:
- The pair has broken out of the descending trendline that has been intact since 2021.
- This breakout is a crucial signal indicating a potential shift from the prolonged bearish trend to a bullish phase.
2. Moving Averages:
- The price has successfully crossed above the weekly 50-period Moving Average (50MA), which often acts as a significant resistance level.
- The next key target is the weekly 200-period Moving Average (200MA). The convergence of the 200MA with the Fibonacci retracement levels adds to its importance as a resistance zone.
3. Fibonacci Retracement Levels:
- The price is currently approaching the 0.382 Fibonacci retracement level. A successful breach of this level could propel the pair towards the 0.618 retracement level.
- The 0.618 Fibonacci level aligns closely with the 200MA, making it a critical resistance zone. This confluence strengthens the resistance at this level, which lies around the $0.72 area.
4. Key Resistance and Support Levels:
- Resistance: The immediate resistance is at the 0.382 Fibonacci retracement level. Beyond this, the $0.72 zone, which coincides with the 0.618 retracement and the 200MA, is the next major resistance.
- Support: On the downside, the broken trendline and the weekly 50MA now act as crucial support levels. Additionally, the $0.62 level, which marked the recent low, remains a significant support zone.
Outlook:
The breakout above the downtrend line and the 50MA, coupled with increasing volume, suggests a bullish outlook for the AUD/USD pair. If the pair manages to break above the 0.382 retracement level, it could head towards the $0.72 area, which is reinforced by the 0.618 Fibonacci level and the 200MA. Traders should watch for consolidation around these key levels and the reaction at the $0.72 zone to gauge the sustainability of this bullish trend.
Conclusion:
The AUD/USD pair's technical landscape has shifted favorably for bulls after a prolonged downtrend. The current breakout and the crossing of key moving averages signal potential for further upside. However, traders should remain cautious around the $0.72 resistance zone, as it represents a critical juncture that could determine the next phase of the trend.
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AUD/USD Surges as US Inflation Cools, Setting for Bullish ContAUD/USD Surges to 0.6670 as US Inflation Cools, Setting the Stage for Bullish Continuation
The AUD/USD pair has jumped higher to 0.6670 following an expected cooling in US inflation. This move aligns with our technical analysis, which anticipated a potential rebound in the Fibonacci retracement area, triggering a new bullish impulse. We also observed a divergence on the RSI within the H4 timeframe, which is situated inside a bullish channel.
The decline in US inflation data is expected to spur expectations for early rate cuts by the Federal Reserve (Fed), creating an unfavorable scenario for the US Dollar. Consequently, the US Dollar Index (DXY) has turned negative, dropping to 105.80.
According to the CME FedWatch tool, the central bank sees the September meeting as the earliest point for pivoting to policy normalization. The tool indicates that the Fed is expected to deliver two rate cuts this year. However, contrary to market expectations, Fed officials have forecasted only one rate cut this year.
Considering all the data and analysis, we are anticipating a possible bullish continuation for the AUD/USD pair.
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AUD/USD: Potential swing trade long setupAUD posted a strong rally of 5% from the April low, before 67c capped as resistance. A choppy rage has since formed between 66c-67c, although it could also be a bull flag in the making. Whilst we wait for it to decide which of the two it is, we're looking at a cheeky swing trade long idea heading into the weekend.
The 1-hour chart shows a strong rally from US CPI, and recent prices action has retraced against that move. Prices are stabilising around the 20-day EMA, so perhaps it is close to a swing low. The bias is bullish whilst prices hold above the monthly pivot point (0.6610), but tighter risk management could be used if momentum turns higher (such as the recent swing lows).
The initial target is near the upper 1-day implied volatility band of 0.6657.
A cautious bounce for AUD/USD ahead of US CPI, FOMCFriday's nonfarm payroll report took many by surprise to send the USD dollar sharply higher against all of its major peers. And that clearly took it toll on the Aussie, which suffered its worst day in five weeks. A bearish outside week formed, all thanks to an elongated bearish engulfing candle on Friday.
AUD/USD managed a minor rebound from its 100 and 200-day EMAs on Monday, but it was a public holiday in Australia and China so the move is assume to corrective.
The 1-hour chart shows prices are sitting around the monthly pivot point and 38.2% Fibonacci level, so we're looking for a swing trade short whilst prices remain beneath 0.6630 and for a move down to 0.6560.
Australia's Inflation Data Revealed Soon Australia's Inflation Data Revealed Soon
Next week, Australia will unveil its latest inflation figures.
Import the BlackBull Markets Economic Calendar to iCloud, Google, or Outlook to get alerts direct to your inbox, enabling you to plan your positions in advance and seize trading opportunities.
Projections suggest a notable dip in Australia's headline inflation to 3.4%, down from the previous 4.1%, a steep decline that could fail to materialize.
other advanced economies are poised to outperform Australia in price reduction efforts, with a median inflation rate expected to reach 2% by 2025. “Somewhat worryingly, progress toward inflation targets has somewhat stalled since the beginning of the year”, said Pierre-Olivier Gourinchas, the IMF’s chief economist.
Traders currently anticipate a 60% likelihood of a rate cut by the RBA in December. However, if the actual inflation figure falls short of the forecasted 3.4%, this expectation may diminish, potentially bolstering the AUD.
Yesterday's marginal uptick in the unemployment rate to 3.8% last month suggests that February's unexpected drop to 3.7% was not an anomaly. This development may only make it more difficult for the Reserve Bank to consider initiating rate cuts in the near future.
The Aussie is Vulnerable Despite its BounceAUD/USD rises after its 2024 lows as the greenback’s strength deflates, eying the pivotal EMA200 and daily closes above it would shift bias to the upside. However, such outcome has high degree of difficulty technically.
The EMA200 can contain the rebound and sustain the bearish bias, which would keep the Aussie exposed to the 2023 lows (0.6269).
The hawkish repricing around the Fed is likely to continue to help for the USDollar, as stubborn inflation, strong economy and robust labor market favor a conservative approach around rate cuts by the Fed. Its Australian counterpart seems to be further from such moves at this stage, but today’s poor labor data strengthen the case for an RBA pivot.
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Past Performance is not an indicator of future results.
Buyers' appetite for the AUD has increasedBy examining the trend in the one-hour time frame, the Australian dollar is fluctuating in an upward channel, and considering the high rate of moving averages of the ALLIAGTOR indicator, the probability of the continuation of the upward trend is very high.
In general, this scenario is strengthened, that the rate can rise to the resistance of the ceiling of the ascending channel in the range of 0.6687, provided that no closing of the four-hour candle time is recorded below the support interval in the range of 0.6611-0.6598.