AUD/USD In Danger of Another Negative Week

  • AUDUSD
    (${instrument.percentChange}%)

AUD/USD

The pair set fresh monthly lows (0.7248) on Thursday, in the aftermath of the multiple hits it suffered from detrimental central bank talk, solid US economic data and Oil decline, earlier in the week.

RBA's Lowe had pushed back against rate hikes on Tuesday, saying that "the latest data and forecasts do not warrant an increase in the cash rate in 2022" [1], Fed's Bullard called for faster QE tapering [2] and US Retail Sales rose to 1.7% in October (from 0.8% revised prior).

Since yesterday though, it has been able to take advantage of the US Dollar's correction and the rebound in oil prices. On the technical front, it managed to defend the ascending trend-line from August's 2021 lows and the slow stochastic bullish cross is supportive.


Past Performance: Past Performance is not an indicator of future results.

This gives Aussie the chance to look towards 0.7320-2 that represents the 23.6% Fibonacci of the "October High/November Low" retreat, but closes above that area will be needed to fuel further recovery towards EMA200 and 38.2% Fibonacci (0.7365).

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The recent support though is nascent and fragile, with the broader trend remaining descending and AUD/USD will have a hard time avoiding its third straight negative week, while the monetary policy differential is unfavorable.

It already has two daily closes below the Ichimoku Cloud - as depicted in the D1 chart - and a third one will add more pressure, while FXCM's contrarian Speculative Sentiment Index has turned net long.

As such, the Aussie is vulnerable to fresh month lows towards 0.7220 and a break below this level will expose it to its September lows and beyond (0.7169).


Past Performance: Past Performance is not an indicator of future results.

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 19 Nov 2021 https://www.rba.gov.au/speeches/2021/sp-gov-2021-11-16.html

2

Retrieved 01 Dec 2021 https://www.youtube.com/watch

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