AUD/USD Winning Streak Continues as RSI Sits in Overbought Territory

Talking Points:

AUD/USD Winning Streak to Continue as Long as RSI Sits in Overbought Territory.

EUR/USD Clings to Yearly Opening Range Ahead of FOMC Minutes.

DailyFX TableAUD/USD

AUD/USD outlines a longest dilate of advances given Sep 2007, with a span during risk of fluctuating a liberation from a December-low (0.7501) as a bullish movement appears to be entertainment pace.

Near-term developments in a Relative Strength Index (RSI) alters a broader opinion for AUD/USD as a oscillator clears a bearish arrangement and pushes into overbought domain for a initial time July, with a sell rate during risk of highlighting a identical energetic as it now threatens a downward trend carried over from Sep (AUD/USD Bullish RSI Trigger Remains in Focus Ahead of RBA Minutes).Key developments entrance out of Australia competence keep AUD/USD bid as a region’s trade change over-abundance is approaching to dilate to A$500M from a$105M in October, though a Reserve Bank of Australia’s (RBA) wait-and-see proceed for financial process competence tame a new appreciation in AUD/USD as Governor Philip Lowe Co. sojourn in no rush to lift a money rate off of a record-low.

In turn, AUD/USD competence continue to benefit belligerent forward of a RBA’s initial 2018 seductiveness rate preference on Feb 6, with a near-term opinion still understanding for a span as prolonged as a movement indicator binds above 70. Want to learn some-more about popular trade indicators and collection such as a RSI? Download and examination a FREE DailyFX Advanced trade guides!

AUD/USD Daily Chart

AUD/USD Daily Chart

  • Near-term opinion for AUD/USD stays constructive following a bullish RSI trigger, though a span needs to break/close above a 0.7850 (38.2% retracement) to 0.7860 (61.8% expansion) section to open adult a subsequent topside jump around 0.7930 (50% retracement) to 0.7940 (61.8% retracement).
  • May see a 0.7650 (38.2% retracement) segment continue to offer support as both cost and a RSI bluster a bearish formations from a second-half of 2017, though a yearly opening operation stays in concentration as a near-term change in AUD/USD function appears to be holding shape.

EUR/USD

EUR/USD struggles to reason a belligerent as a ISM Manufacturing consult suddenly climbs to 59.7 from 58.2 in November, though a span competence adhere to a yearly opening operation forward of a U.S. Non-Farm Payrolls (NFP) news as a uninformed information prints entrance out of a economy destroy to boost bets for an approaching Fed rate-hike.

The unsuccessful try to exam a September-high (1.2092) raises a risk for a near-term pullback in EUR/USD generally as a Relative Strength Index (RSI) struggles to reason above 70, and a miscarry from a December-low (1.1718) competence continue to uncover as a span snaps a new fibre of higher-lows.

A deeper demeanour during a business view consult showed a sign for New Orders climbing to 69.4 from 64.0, with a index for factory-gate prices resilient to 69.0 from 65.5 during a same period. However, a Employment member narrowed to 57.0 in Dec from 59.7 a month before to symbol a lowest reading given July, and a NFP news competence also broach a churned summary as Average Hourly Earnings are approaching to reason prosaic during an annualized 2.5%.

Signs of resigned cost pressures competence criticise a Federal Open Market Committee’s (FOMC) range to broach 3 rate-hikes in 2018 as ‘inflation on a 12‑month basement is approaching to sojourn rather subsequent 2 percent in a nearby term,’ and a assembly mins competence offer small clues on a timing of a subsequent process movement as ‘many participants celebrated that there was some odds that acceleration competence sojourn subsequent 2 percent for longer than they now expected.’ In turn, some-more of a same from a FOMC competence keep EUR/USD afloat, with a broader opinion for a span still understanding as both cost and a RSI safety a bullish formations carried over from November. 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!

EUR/USD Daily Chart

EUR/USD Daily Chart

  • May see EUR/USD face range-bound conditions following a unsuccessful try to exam a September-high (1.2092), with a near-term opinion capped by a 1.2130 (50% retracement) hurdle.
  • Topside targets sojourn on a radar, with a initial area of seductiveness entrance in around 1.2230 (50% retracement) followed by a Fibonacci overlie around 1.2320 (23.6% retracement) to 1.2370 (61.8% expansion).
  • Keeping a tighten eye on a former-resistance section around 1.1960 (38.2% retracement) for support along with a RSI as it comes off of overbought territory, with a subsequent downside segment of seductiveness entrance in around 1.1810 (61.8% retracement).

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— Written by David Song, Currency Analyst

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