AUD/USD Rate Risks Further Losses as Bearish Momentum Remains in Play

FX TALKING POINTS:

AUD/USD Slips to Fresh 2018-Lows Ahead of Reserve Bank of Australia (RBA) Meeting. Downside Targets Remain on a Radar as Bearish Momentum Remains in Play.

USD/JPY Extends Higher Highs Following Upbeat 4Q U.S. Gross Domestic Product (GDP) Report. Relative Strength Index (RSI) Starts to Snap Bearish Formations.

DailyFX Table

AUD/USD SITS AT 2018-LOW AHEAD OF RESERVE BANK OF AUSTRALIA (RBA) MEETING.

AUD/USD Table

AUD/USD presses to uninformed 2018-lows going to a finish of a month, with a span during risk for serve waste as it triggers a bearish method forward of a Reserve Bank of Australia (RBA) assembly on Apr 3.

With a RBA widely approaching to keep a record-low money rate, Governor Philip Lowe and Co. might merely try to buy some-more time as ‘household incomes are flourishing solemnly and debt levels are high.’ More of a same from a RBA might continue to corrupt a seductiveness of a Australian dollar as marketplace participants scale behind bets for a 2018-rate hike, and it seems as yet a RBA is in no rush to adjust a financial process opinion as ‘the low spin of seductiveness rates is stability to support a Australian economy.’

As a result, downside targets sojourn on a radar for AUD/USD, with a span during risk of exhibiting a some-more bearish function as a Relative Strength Index (RSI) continues to lane a downward trend from progressing this year.

AUD/USD DAILY CHART

AUD/USD Daily Chart

  • AUD/USD has come adult opposite a former-resistance section around 0.7650 (38.2% retracement), with a break/close subsequent a settled segment opening adult a subsequent downside aim around 0.7590 (100% expansion); subsequent downside jump comes in around 0.7460 (23.6% retracement) to 0.7530 (38.2% expansion), that lines adult with December-low (0.7501).
  • Keeping a tighten eye on a RSI as it falls behind towards oversold territory, with a mangle subsequent 30 lifting a risk for a serve decrease in a sell rate as a bearish movement gathers pace.

USD/JPY EXTENDS HIGHER HIGHS FOLLOWING UPBEAT 4Q U.S. GROSS DOMESTIC PRODUCT (GDP) REPORT.

USD/JPY Table

USD/JPY climbs to a uninformed weekly-high (107.01) as a updates to a 4Q U.S. Gross Domestic Product (GDP) news showed a larger-than-expected ceiling rider in a enlargement rate, and a span might theatre a some-more suggestive liberation over a entrance days as a bearish movement abates.

Signs of stronger enlargement should keep a Federal Open Market Committee (FOMC) on march to serve normalize financial process over a entrance months generally as a core U.S. Personal Consumption Expenditure (PCE), a executive bank’s elite sign for inflation, sits during 1.9%. The monthly PCE news due out tomorrow might encourage a identical greeting as a core reading is approaching to stand to an annualized 1.6% from 1.5% in February, and another collection of certain developments might eventually fuel a incomparable miscarry in USD/JPY as acceleration approaches a 2% target.

In turn, Chairman Jerome Powell and Co. might continue to ready U.S. households and businesses for aloft borrowing-costs as a cabinet looks to exercise 4 rate-hikes in 2018, with a topside targets on a radar for USD/JPY as it extends a array of aloft highs from progressing this week.

USD/JPY DAILY CHART

USD/JPY Daily Chart

  • USD/JPY stands during risk for a incomparable miscarry as a Relative Strength Index (RSI) moves divided from overbought domain and starts to bluster a bearish formations carried over from a prior year.
  • Need a break/close above a 106.70 (38.2% retracement) to 107.20 (61.8% retracement) segment to preference a incomparable allege in USD/JPY, with a subsequent segment of seductiveness entrance in around 108.30 (61.8% retracement) to 108.40 (100% expansion) followed by a Fibonacci overlie around 109.40 (50% retracement) to 110.00 (78.6% expansion).

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— Written by David Song, Currency Analyst

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