AUD/USD Extends Lower Highs & Lows Ahead of RBA Meeting

Talking Points:

GBP/USD Confined in Bearish Formation Amid Mixed BoE Rhetoric.

AUD/USD Extends Lower Highs Lows Ahead of RBA Meeting; Former-Resistance in Focus.

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DailyFX TableGBP/USD

GBP/USD pares a decrease from progressing this week even as Bank of England (BoE) Governor Mark Carney pledges a executive bank ‘will do all it can’ to support a U.K. economy, and a span might continue trade on a firmer balance as a flourishing array of Monetary Policy Committee (MPC) officials adopt an softened opinion for a region.

BoE Chief Economist Andrew Haldane struck a hawkish tinge and argued a U.K. rate-hike ‘would be a pointer of a economy healing,’ and went onto contend that ‘rather than being a source of fear or trepidation, this ought to be a good news story about a economy proof resilient.’ The upbeat remarks suggests a MPC might change a financial process opinion during a subsequent assembly on Nov 2 as ‘a withdrawal of partial of a impulse that a Committee had injected in Aug final year would assistance to assuage a acceleration mistake while withdrawal monetary process really supportive,’ and Cable might continue to replenish a waste following a U.K. Referendum as a bull-flag arrangement appears to be holding shape.

GBP/USD Daily Chart

GBP/USD Daily Chart

  • GBP/USD stands during risk for a incomparable pullback after unwell to exam a 1.3700 (38.2% expansion) jump as it trades within a downward trending channel, with a Relative Strength Index (RSI) highlighting a identical dynamic.
  • GBP/USD is entrance adult opposite a former-resistance section around 1.3300 (100% expansion) to 1.3320 (38.2% retracement), with a subsequent downside segment of seductiveness entrance in around 1.3210 (50% retracement) followed by a Fibonacci overlie around 1.3090 (38.2% retracement) to 1.3120 (78.6% retracement).

AUD/USD

The Australian dollar lags behind a vital counterparts, with AUD/USD during risk for serve waste as it extends a array of reduce highs lows from progressing this week.

The bearish method might accumulate gait forward of a Reserve Bank of Australia’s (RBA) Oct 3 assembly as a sell rate clears a August-low (0.7808), and a span might continue to give behind a allege from a summer months as a executive bank appears to be in no rush to mislay a record-low money rate. In turn, Governor Philip Lowe might mostly echo that ‘a arise in tellurian seductiveness rates has no involuntary implications for us here in Australia,’ and a executive bank might merely try to buy some-more time as ‘the delayed enlargement in salary is putting a aria on domicile budgets and contributing to low rates of inflation.

As a result, some-more of a same from a RBA might fuel a new decrease in a aussie-dollar sell rate generally as a span fails to safety a ceiling trend from progressing this year.

AUD/USD Daily Chart

AUD/USD Daily Chart

Chart – Created Using Trading View

  • Downside targets sojourn on a radar for AUD/USD as both cost and a Relative Strength Index (RSI) snap a bullish formations from progressing this year, with a near-term opinion capped by a 0.8150 (100% expansion) hurdle.
  • Break of a August-low (0.7808) opens adult a former-resistance section around 0.7720 (23.6% retracement) to 0.7770 (61.8% expansion), that also lines adult with a 100-Day SMA (0.7758), with a subsequent downside segment of seductiveness entrance in around 0.7650 (38.2% retracement).

Retail Sentiment

Retail Sentiment

Track Retail Sentiment with a New Gauge Developed by DailyFX Based on Trader Positioning

  • Retail merchant information shows 35.9% of traders are net-long GBP/USD with a ratio of traders brief to prolonged during 1.78 to 1. In fact, traders have remained net-short given September 05 when GBP/USD traded nearby 1.29615; cost has changed 3.7% aloft given then. The array of traders net-long is 2.0% aloft than yesterday and 8.3% aloft from final week, while a array of traders net-short is 6.6% reduce than yesterday and 8.7% reduce from final week.
  • Retail merchant information shows 46.3% of traders are net-long AUD/USD with a ratio of traders brief to prolonged during 1.16 to 1. In fact, traders have remained net-short given June 04 when AUD/USD traded nearby 0.74145; cost has changed 5.7% aloft given then. The array of traders net-long is 6.2% aloft than yesterday and 12.4% aloft from final week, while a array of traders net-short is 13.5% reduce than yesterday and 19.0% reduce from final week.

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— Written by David Song, Currency Analyst

To hit David, e-mail dsong@dailyfx.com. Follow me on Twitter during @DavidJSong.

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