AUD Unfazed Ahead of U.S. Election; Topside Targets Remain Favored

Talking Points:

AUD/USD Unfazed Ahead of U.S. Election; Topside Targets Remain Favored.

USD/JPY Outlook Mired by Wait-and-See BoJ Policy; 105.40 Hurdle Remains in Focus.



AUD/USD Daily Chart

Chart – Created Using Trading View

  • The Australian dollar outperforms forward of a U.S. Presidential election, and a higher-yielding banking might work a proceed behind towards a Oct high (0.7734) as it carves a near-term array of aloft highs lows; broader opinion for AUD/USD stays constructive as a span continues to trade within a descending triangle arrangement from progressing this year, while a Relative Strength Index (RSI) preserves a ceiling trend carried over from a summer months.
  • It seems as yet a Reserve Bank of Australia (RBA) will validate a wait-and-see proceed during a final 2016 process assembly on Dec 6 as a executive bank sees a economy growingclose to a intensity rate, before gradually strengthening;’ might see a near-term resilience in a Australian dollar lift into 2017 should Governor Philip Lowe and Co. uncover a larger eagerness to gradually pierce divided from a easing-cycle.
  • May see AUD/USD trade within a tightening operation as a span mostly stays capped around 0.7730 (61.8% retracement) to 0.7770 (61.8% expansion), though a break/close above a Fibonacci overlie might beget a near-term breakout, with a subsequent topside segment of seductiveness entrance in around 0.7835 (2016 high) to 0.7860 (61.8% expansion).


USD/JPY Daily Chart

Chart – Created Using Trading View

  • USD/JPY gaps aloft as U.S. Election polls uncover Democratic hopeful Hillary Clinton in a lead, with a allege in a sell rate mostly accompanied by a pickup in risk appetite; broader opinion for USD/JPY stays churned as a span retains a downward trend from progressing this year, while a RSI preserves a bullish arrangement carried over from a summer months.
  • A serve pickup in risk ardour might keep USD/JPY afloat over a entrance days, though a bullish view surrounding a dollar-yen might mostly uncover going into 2017 as a Bank of Japan (BoJ) Minutes advise Governor Haruhiko Kuroda and Co. are in no rush to serve embark on a easing-cycle; might see marketplace courtesy change to a 2017 financial process opinion following a U.S. Presidential choosing as a Federal Open Market Committee (FOMC) looks staid to broach a Dec rate-hike.
  • A tighten above 104.20 (61.8% retracement) might coax another pierce during a 105.40 jump (50% retracement) following a unsuccessful try to pull next a former-resistance section around 102.70 (38.2% expansion).


  • The DailyFX Speculative Sentiment Index (SSI) shows a sell throng stays net-long USD/JPY given Jul 21, with a ratio imprinting a 2016-extreme of +6.04 in September, while traders have been net-short AUD/USD given a start of November.
  • USD/JPY SSI sits during +1.73 as 63% of traders are long, with brief positions 34.8% reduce from a prior week as open seductiveness stands 15.2% next a monthly average.
  • AUD/USD SSI sits during -1.36 as 42% of traders are long, with prolonged positions 28.6% reduce from a prior week, while open seductiveness stands 4.2% next a monthly average.
  • Will keep a tighten eye on marketplace appearance as a USD/JPY SSI continues to slight forward of a U.S. Presidential election.

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— Written by David Song, Currency Analyst

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