Australian Dollar Talking Points
AUD/USD might face range-bound conditions as it pares a pointy decrease from progressing this week, though new cost movement keeps a near-term opinion slanted to a downside as a sell rate extends a fibre of reduce highs lows from progressing this week.
AUD/USD Rate Eyes July-Low as Bearish Sequence Takes Shape
With a broader opinion for AUD/USD mired by a hazard of a trade war between a U.S. and China, flourishing tensions between a dual regions might continue to drag on a aussie-dollar sell rate as U.S. Treasury Secretary Steven Mnuchin warns many trade talks with Australia’s largest trade partner have ‘broken down.’
In turn, a Reserve Bank of Australia (RBA) Minutes on daub for a week forward might continue to prominence a wait-and-see proceed for financial process as ‘one doubt per a tellurian opinion stems from a instruction of general trade process in a United States,’ and Governor Philip Lowe Co. might continue to tame expectations for an approaching rate-hike as ‘the low turn of seductiveness rates is stability to support a Australian economy.’
More of a same from a RBA might do small to seaside adult aussie-dollar as a executive bank appears to be on lane to keep a record-low money rate during a subsequent assembly on Aug 7, and AUD/USD looks to on march to exam a monthly-low (0.7311) generally as sell view sits nearby new extremes.
Recent updates to a IG Client Sentiment Report shows the array of traders net-long AUD/USD is 2.9% reduce than yesterday and 7.8% reduce from final week, while a array of traders net-short is 6.9% aloft than yesterday and 1.6% reduce from final week. Despite signs of squeezing interest, traders have been net-long AUD/USD given June 5 when the sell rate traded nearby the 0.7573 segment even though cost has changed 2.1% reduce given then.
The askance in sell positioning offers a contrarian view, with the fact that traders are still net-long AUD/USD lifting a risk for a run during a monthly-low (0.7311) as a bearish method starts to take shape.
AUD/USD Daily Chart
- Keep in mind, a broader opinion for AUD/USD stays slanted to a downside as a span continues to lane a downward trend from progressing this year, with a Relative Strength Index (RSI) still highlighting a identical dynamic.
- Near-term opinion stays capped by a unsuccessful try to transparent a Fibonacci overlie around 0.7500 (50% retracement) to 0.7530 (38.2% expansion), with a 0.7320 (50% expansion) to 0.7340 (61.8% retracement) segment on a radar as it lines adult with a July-low (0.7311).
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— Written by David Song, Currency Analyst
Follow me on Twitter during @DavidJSong.