AUD/USD Stages Larger Recovery Ahead of RBA Minutes, Lowe Testimony

Talking Points:

AUD/USD Stages Larger Recovery Ahead of RBA Minutes; Governor Lowe Testimony in Focus.

USDOLLAR Outlook Mired by Bearish RSI Formation; Fed Funds Futures Remain Unchanged.

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AUD/USD

AUD/USD Daily Chart

Chart – Created Using FXCM Marketscope 2.0

  • AUD/USD extends a miscarry from a prior week, yet a broader opinion stays slanted to a downside following a unsuccessful try to exam a Aug high (0.7759), while a Relative Strength Index (RSI) preserves a bearish arrangement carried over from late-June.
  • The Reserve Bank of Australia (RBA) Minutes might fuel a incomparable allege in AUD/USD as a executive bank keeps a benchmark seductiveness rate a record-low of 1.50% in Sep and looks staid to keep a wait-and-see proceed over a near-term as Dr. Philip Lowe takes a helm of a executive bank; will keep a tighten eye on a uninformed tongue as Governor Lowe is scheduled to attest before a House of Representatives Standing Committee on Economics on Thursday.
  • Need a break/close above a Fibonacci overlie around 0.7580 (50% expansion) to 0.7600 (23.6% retracement) to preference a incomparable liberation in AUD/USD, with a subsequent topside hurdles entrance in during 0.7650 (78.6% retracement) followed by 0.7340 (78.6% expansion, that lines adult with a monthly high (0.7731).

DailyFX SSI

  • The DailyFX Speculative Sentiment Index (SSI) shows a sell FX throng stays net-long AUD/USD given Sep 9, with a ratio imprinting a 2016 impassioned in Jan as it climbed to +2.50.
  • The ratio now sits during +1.09 as 52% of traders are long, with brief positions jumping 21.6% from a prior week, while open seductiveness stands 12.5% above a monthly average.
  • May see a serve change in sell positioning as AUD/USD appears to be figure a longer-term array of reduce highs lows.

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USDOLLAR(Ticker: USDollar):

AUD/USD Stages Larger Recovery Ahead of RBA Minutes, Lowe TestimonyUSDOLLAR Daily Chart

Chart – Created Using FXCM Marketscope 2.0

  • The USDOLLAR might continue connect forward of a Federal Open Market Committee (FOMC) interest-rate preference as it appears to have done a unsuccessful run during a Aug high (12,027), with a greenback during risk of confronting choppy cost movement forward of a uninformed executive bank projections as Fed Funds Futures continue to prominence a reduction than 20% luck for rate-hike this week.
  • Even yet a Fed looks staid to follow a identical trail to 2015, a noted downward rider in a seductiveness rate dot-plot for 2017 as good as for 2018 might furnish headwinds for a dollar as Fed Chair Janet Yellen continues to validate a ‘gradual’ trail to normalizing financial policy.
  • Failure to reason above a Fibonacci overlie around 11,951 (38.2% retracement) to 11,965 (23.6% retracement) would open adult a subsequent downside area of seductiveness around 11,898 (50% retracement) to 11,914 (38.2% retracement), followed by a monthly low (11,851).

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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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