AUD/USD Rally Unravels Ahead of Reserve Bank of Australia (RBA) Meeting

FX Talking Points:

EUR/USD Remains Bid Following FOMC; Outlook Hinges on NFP.

AUD/USD Rally Unravels Ahead of Reserve Bank of Australia (RBA) Meeting.

DailyFX TableEUR/USD Table

EUR/USD stays bid even as a Federal Open Market Committee (FOMC) reiterates that economic conditions will develop in a demeanour that will aver serve light increases in a sovereign supports rate,’ and a span might continue to vaunt a bullish function as a Relative Strength Index (RSI) sits in overbought territory.

The uninformed remarks from a FOMC suggests a executive bank is on lane to broach 3 rate-hikes in 2018 as ‘market-based measures of acceleration remuneration have increasing in new months,’ and a U.S. Non-Farm Payrolls (NFP) news might fuel bets for an approaching Fed rate-hike as both pursuit and salary enlargement are approaching to collect adult in January. A certain growth might clap EUR/USD as it encourages Fed officials to exercise aloft borrowing-costs during a subsequent assembly in March, yet another bag of churned information prints might keep a euro-dollar sell rate afloat as a FOMC struggles to grasp a 2% aim for inflation.

With that said, new cost movement keeps a near-term opinion slanted to a topside as bullish movement persists, with EUR/USD during risk of creation uninformed yearly highs as prolonged as a RSI binds above 70. Want some-more insight? Sign adult and join DailyFX Strategist Michael Boutros David Song LIVE to cover a U.S. NFP report.

EUR/USD Daily Chart

EUR/USD Daily Chart

Interested in trading? Review a ‘Traits of a Successful Trader’ array on how to effectively use precedence along with other best practices that any merchant can follow.

  • Near-term opinion for EUR/USD stays constructive as cost and a RSI extend a bullish formations from late-2017, with a tighten above a 1.2430 (50% expansion) jump opening adult a subsequent segment of seductiveness around 1.2640 (61.8% expansion) to 1.2650 (38.2% retracement).
  • However, another unsuccessful try to tighten above 1.2430 (50% expansion) raises a risk for a near-term pullback as a bullish movement appears to be abating, with a initial downside area of seductiveness entrance in around 1.2230 (50% retracement) followed by a 1.2130 (50% retracement) region.


The near-term convene in AUD/USD unravels only forward of a Reserve Bank of Australia (RBA) assembly on Feb 6, with a span during risk for serve waste as it snaps a ceiling trend from a December-low (0.7501).

The RBA is approaching to stay on reason during a initial seductiveness rate preference for 2018 amid a below-forecast information prints entrance out of a genuine economy, and a executive bank might merely try to jawbone a internal banking as ‘an appreciating sell rate would be approaching to outcome in a slower pick-up in domestic mercantile activity and acceleration than now forecast.Even yet Governor Philip Lowe records that ‘it is some-more approaching that a subsequent pierce in seductiveness rates will be up, rather than down,’ a RBA appears to be in no rush to lift a money rate off of a record-low as ‘the opinion for domicile expenditure continued to be a poignant risk, given that domicile incomes were flourishing solemnly and debt levels were high.

In turn, some-more of a same from Governor Lowe Co. might furnish headwinds for a Australian dollar as marketplace participants scale behind bets for an RBA rate-hike in 2018. Want to know what other banking pairs a DailyFX group is watching? Download and examination a Top Trading Opportunities for 2018.

AUD/USD Daily Chart

AUD/USD Daily Chart

Interested in carrying a broader contention on stream marketplace themes? Sign adult and join DailyFX Currency Analyst David Song LIVE for an event to plead intensity trade setups!

  • Downside targets are entrance behind on a radar for AUD/USD as a span snaps a ceiling trend after unwell to pull above a 0.8150 (100% expansion) hurdle, with a span starting to carve a uninformed array of reduce highs lows.
  • The Relative Strength Index (RSI) highlights identical energetic as a oscillator finally falls behind from overbought domain and flashes a text sell-signal.
  • First downside area of seductiveness comes in around 0.7930 (50% retracement) to 0.7940 (61.8% retracement) followed by a 0.7850 (38.2% retracement) to 0.7860 (61.8% expansion) region.

DailyFX Calendar

Click Here for a DailyFX Calendar

— Written by David Song, Currency Analyst

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

To be combined to David’s e-mail placement list, greatfully follow this link.

About author

No one is buying this from Turnbull

Video Image PM Malcolm Turnbull has flagged changes to the citizenship process after abolishing the 457 visa. Malcolm Turnbull says 457 visa changes are about ...