AUD/USD Runs its Fourth Negative Week

  • AUDUSD
    (${instrument.percentChange}%)

AUD/USD - H4

King US Dollar dominates another week, supported by yesterday's hawkish Federal Reserve minutes and commentary.

The accounts of the November 2-3 policy meeting revealed that "some participants preferred a somewhat faster pace of reductions that would result in an earlier conclusion to net purchase". [1]

More to it, the San Francisco Fed president turned hawkish, saying that "If things continue to do what they've been doing, then I would completely support an accelerated pace of tapering", in an interview with yahoo Finance. [2]

The monetary policy differential between the Fed and the Reserve Bank of Australia continues to weigh on the pair, which extends its losses today, threatening the September lows (0.7169) - in line with the analysis from last week.

More to it, FXCM's contrarian Speculative Sentiment Index (SSI) ratio continues to move further into long territory, adding to the downside potential. This month is on course to become the worst of 2021 and the low of the year (0.7105) is now in the spotlight.

In the absence of US traders and as the greenback consolidates today, AUD/USD may find the opportunity to push back and reclaim 0.7220, but a strong catalyst is required in order to break above the downward trend-line from October (at mid-0.7200s) and find some reprieve.

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Australian Retail Sales are due at 00:30 GMT on Friday, which can affect the pair's trajectory, while caution is needed to the liquidity/volatility conditions due to the Thanksgiving Holiday in the US.


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Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 25 Nov 2021 https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20211103.pdf

2

Retrieved 06 Dec 2021 https://finance.yahoo.com/news/san-francisco-fed-mary-daly-certainly-see-a-case-for-speeding-up-taper-142328227.html

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