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AUD/USD eases to fresh one-week lows post-RBA

A dovish RBA weighs on the aussie today

The pair is down 0.6% to its lowest since 25 October, with the low hitting 0.7471 as sellers start to explore further downside potential on the day.
AUD/USD H1 02-11
The post-RBA drop also sees price action fall back below both key hourly moving averages, with the 200-hour moving average (blue line) seen @ 0.7506. This sees the near-term bias shift back to being more bearish now.
There is still some minor support from the region around 0.7460-80 in general, with the 23.6 retracement level of the October swing higher sitting at 0.7464.
That may help to limit the downside for now but break below that and it could be a quick drop back towards 0.7400 for the pair with little else in the way.
But for any real momentum to be sustained, it needs confirmation from the dollar side of the equation and that will only come after the FOMC meeting tomorrow.
For now, the technicals are starting to side with sellers but we’ll see if that can continue until the end of the week as the Fed looms just around the corner.

USD/JPY brushes against the 114.00 level again to start the session

USD/JPY trades up to test the 114.00 level

The yen is the laggard to kick start the session as the rest of the major currencies bloc are keeping steadier for the most part amid lighter trading conditions so far.
USD/JPY H1 26-10
USD/JPY is seen pushing up to 114.00 again with the risk mood also keeping more positive as we get things underway in European trading. Of note, the pair is now contesting near-term resistance from its key hourly moving averages at 113.93-00.
Hold a break above and the near-term bias switches to being more bullish instead. That will be a key focus area to watch with little else for traders to work with.
While a push above 114.00 may entice buyers to have more conviction, the weekly chart underscores that more work needs to be done for the upside momentum to extend:
USD/JPY W1 26-10
The break above 114.00 two weeks ago was encouraging but gains last week fell short of contesting and breaching the November 2017 high of 114.74, resulting in a light pullback coming into this week.
As such, that will remain a key resistance level/region to watch if buyers can seize back near-term control – in terms of justifying any further extensive breakout.

AUD: The commodity currency

AUD & the drivers

One key to understanding the AUD well is not only how the central bank policy impacts the AUD. It is also how other markets impact it. This article will outline some of the major influences that go into the Australian dollar. Influence #1 China China is the world’s second largest economy. It is also the largest export market for Australia. This means that good news for China is also good news for Australia. The relationship means that sometimes the AUD is traded as a proxy for the Yuan. Expect good china news to lift the AUD as a general rule of thumb. Influence #2 Iron Ore Recently AUD prices have been heavily sold as China cut down on its steel mills usage. Iron Ore makes up around 20-25 % of Australia’s total exports. Around 80% of these go straight to China. So, you can see how influence 1 and influence 2 are correlated. Strong Iron ore prices is a positive for the AUD and vice versa. Influence #3 Coal Again another top export for Australia making up around 12-17% of total exports depending on your source.Recently notice that whereas Iron Ore prices have been falling, coal prices have been rising. See chart below AUD & the drivers  Influence #4 Gold Gold mining is big business down under and around 5% of total Australian exports come in through the precious metal. So, as well as considering the influence of the Reserve Bank of Australia and the USD make sure you include these other influences. AUD

Dollar gains as risk leans towards being more defensive to start the session

AUD/USD down 0.4% to 0.7482 on the day

AUD/USD D1 21-10
The pair hit a high of 0.7518 in Asia Pacific trading but has since kept a push lower as equities are dragged down to the lows for the day to start the European session.
The 100-hour moving average for the pair is seen at 0.7454 so buyers are still keeping near-term control but a push back below the 3 September high of 0.7478 will also put a dent on the recent upside momentum from a technical perspective.
Elsewhere, the dollar is also seen gaining ground across the board with EUR/USD down to 1.1637 from 1.1660 earlier while GBP/USD is down from 1.3830 to 1.3795.
USD/CAD is also trading up from a low of 1.2290 in Asia Pacific trading to 1.2340 currently, as it reflects a similar technical situation to AUD/USD with its own 100-hour moving average seen at 1.2355 currently.
The yen is also the other beneficiary as risk sentiment is slightly more defensive, with yen pairs pulling back from their recent highs. USD/JPY is seen trading around 113.95-05 at the moment, keeping in between its key hourly moving averages at 113.83-27.

US dollar trades to new lows

USD is the weakest of the majors

USD is the weakest of the majors
The US dollar is the weakest of the major currencies with declines versus all the majors. The fall is led by the decline in the NZDUSD which continues to be supported by the expectations the RBNZ will continue their tightening process going forward.  The NZDUSD has been up for 6 consecutive days and in the process has moved up around 300 pips.
Currently, the USD is trading to new highs versus ALL the major currencies in the current hourly bars.
The US yields are off their high levels. The 10 year is trading at 1.63% versus 1.673%. The five year is trading at 1.1444% versus 1.193% high.

EURJPY works on 8th straight day to the upside

Price trades at the highest level since June 17

The EURJPY is up for the eighth straight day. In the move higher, the price last week extended above both its 200 day moving average (currently at 129.91) and the 100 day moving average (currently at 130.433).  There has been little in the way of a correction since the breaks.
The price is currently up around 19 pips at 132.69.  The high price reached 132.78. In moving higher, the price has moved into the a swing area for the second consecutive day on the daily chart below between 132.469 and 132.88. A move above that area would push the price into the high extreme for the year up to the end of May/early June high at 134.117.
Price trades at the highest level since June 17