AUD/USD Rate Forecast: Rebound Takes Shape as Bearish Momentum Abates


Australian Dollar Talking Points

AUD/USD extends the rebound from earlier this week as there appears to be a growing dissent within the Federal Reserve, and recent price action raises the risk for a large recovery as the exchange rate initiates a series of higher highs & lows.

Image of daily change for major currencies

AUD/USD Rate Forecast: Rebound Takes Shape as Bearish Momentum Abates

Image of daily change for audusd rate

Even though the Federal Open Market Committee (FOMC) is widely anticipated to deliver another 25bp rate-hike at the next quarterly meeting in December, fresh remarks from St. Louis Fed President James Bullard, who rotates into the FOMC in 2019, appears to be gaining attention as the policymaker argues that U.S. interest rates are ‘close to neutral.’

In turn, a growing number of Fed officials may soften the hawkish outlook for monetary policy as ‘there just isn’t that much inflation pressure in the U.S. economy,’ and Chairman Jerome Powell & Co. may continue to project a longer-run interest rate of 2.75% to 3.00% as signs of slowing job/wage growth curb the risk for above-target inflation.

Keep in mind, the broader outlook for AUD/USD remains mired by the Reserve Bank of Australia’s (RBA) reluctance to lift the official cash rate (OCR) off of the record-low, and the central bank’s semi-annual Financial Stability Review is likely to do little to boost the appeal of the local currency as Governor Philip Lowe & Co. continue to endorse a wait-and-see approach for monetary policy.

Image of rba cash rate

With that said, it seems as though the RBA will stick to the same script at the next meeting on November 6, and more of the same from the central bank may continue to drag on AUD/USD amid the deviating paths for monetary policy. Moreover, the IG Client Sentiment Report shows retail sentiment back at extremes as73.8% of traders are net-long AUD/USD with the ratio of traders long to short at 2.81 to 1.

Image of IG client sentiment for audusd rate

The ongoing skew in retail interest offers a contrarian view to crowd sentiment, with the broader outlook for AUD/USD still tilted to the downside as both price and the Relative Strength Index (RSI) continue to track the bearish formations from earlier this year. However, the bearish momentum may continue to abate as the RSI snaps back ahead of oversold territory, with the failed attempt to break below 30 raising the risk for a larger recovery in the aussie-dollar exchange rate. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups.

AUD/USD Daily Chart

Image of audusd daily chart

Image of DailyFX economic calendar

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2018.

— Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

Original from:

Комментариев нет

Новый комментарий

Ваш e-mail не будет опубликован. Обязательные поля помечены *

последние новости


Суд отказал кредиторам Русского стандарта во взыскании 49% акций банка

© Reuters. МОСКВА (Рейтер) — Арбитражный суд Москвы отказал в удовлетворении иска лондонского подразделения Citibank к двум компаниям, связанным с владельцем банка Русский стандарт Рустамом Тарико, указано в материалах суда. Ответчиками выступали компании Русский стандарт (не является банком) и ООО Русский стандарт-инвест. Определение судом пока не опубликовано. Иск был инициирован в сентябре 2020 года держателями ...


ЦБР хочет к 2023г законодательно обязать кредиторов рассчитывать ПДН

© Reuters. An advertising board of a lending agency is on display in Stavropol МОСКВА (Рейтер) — Центробанк РФ в 2021-2022 годах намерен законодательно закрепить за кредиторами обязанность расчета показателя предельной долговой нагрузки (ПДН), говорится в сообщении регулятора. Среди задач на предстоящие два года, пишет ЦБ, — модернизация механизма расчета ПДН в связи с реформой ...


Украина обсудила с МВФ выпуск зеленых бондов для погашения долга перед производителями возобновляемой энергии

© Reuters. The IMF logo is seen outside the headquarters building in Washington КИЕВ (Рейтер) — Украина обсуждала с Международным валютным фондом план выпуска зеленых облигаций для погашения долгов перед производителями энергии из возобновляемых источников, сказал в среду премьер-министр страны Денис Шмыгаль. «С помощью этого инструмента мы сможем продолжить погашение долгов перед производителями энергии из ...