The USD retraced lower from its 1-year high for a second day, allowing AUD/USD to post a solid bounce from its cycle low. And price action suggest its bounce may not be over just yet.
By :Matt Simpson, Market Analyst
The USD handed back some more of last week’s gains on Monday to mark a second day lower from its 1-year peak. This week presents a light economic calendar for the US, which makes Trump’s cabinet picks a likely driver for USD sentiment alongside Nvidia’s earnings on Wednesday.
AUD/USD and EUR/USD were the strongest FX majors as mean reversion against the dollar kicked in. The Australian dollar also benefited from a bounce in key commodity prices. Gold attracted safe-haven flows after President Biden announced a long-range missile for Ukraine to reach deeper into Russian territory. News that a Norwegian oilfield had been halted also sent WTI crude oil prices up over 3.3%.
Despite broad USD weakness, it was the Japanese yen which was the weakest major after BOJ Governor Ueda was vague regarding the timing of any interest rate hike. While USD/JPY closed the day 0.25% higher, it remains overshadowed by Friday’s bearish engulfing day of -1.25% when Japan’s Finance Minister pushed back against currency speculators.
Events in focus (AEDT):
- 11:30 – RBA meeting minutes
- 19:45 – ECB Elderson speaks
- 21:00 – EU CPI
- 23:00 – NZ Milk auctions
- 00:30 – US building permits, housing starts
- 00:30 – CA CPI
- 03:30 – USGDPnow
Click the website link below to get our exclusive Guide to AUD/USD trading in Q4 2024.
https://www.forex.com/en-us/market-outlooks-2024/Q4-aud-usd-outlook/
AUD/USD technical analysis:
AUD/USD completed a three-day bullish reversal pattern on Monday (dark cloud cover). That is also formed perfectly at the February low, just above the monthly S1 also adds weigh to the reversal. Moreover, bullish divergences formed on the RSI (2) and RSI (14).
Being bullish AUD/USD is likely not a popular idea. But that tends to be the case at turning points. Also note the strong bullish momentum on the 1-hour chart which suggests further upside potential over the near term. Bulls could seek dips within Monday’s range, such as the 0.6810 high or high-volume node (HVN) at 0.6429
View the full economic calendar
– Written by Matt Simpson
Follow Matt on Twitter @cLeverEdge
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.