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AUDUSD, Potential Bearish Continuation | 14th June 2022On the H4, with price moving below the ichimoku cloud, we have a bearish bias that price will continue to drop from the sell entry at 0.69500 in line with the overlap resistance to the take profit at 0.68264 in line with the 100% fibonacci projection. Alternatively, price may break the entry structure and rise to the stop loss at 0.70383 at the pullback resistance and 38.2% fibonacci retracement. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Short
by Rockqet
1
AUDUSD, H4 Potential Bearish ContinuationOn the H4, with price moving below the ichimoku cloud and along the descending trendline, we have a bearish bias that price will continue to drop from the sell entry at 0.69498 in line with the overlap resistance to the take profit at 0.68287 in line with the 100% fibonacci projection. Alternatively, price may break the entry structure and rise to the stop loss at 0.70384 at the pullback resistance, 61.8% fibonacci projection and 38.2% fibonacci retracement. Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Everest Fortune Group’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Everest Fortune Group.
Short
by VantageMarkets
1
AUDUSD 4hour Analysis June 12th, 2022AUDUSD Bearish Idea Weekly Trend: Bearish Daily Trend: Bearish 4Hour Trend: Bearish Trade scenario 1: We are looking bearish on all timeframes and last week we saw a major drop to our 0.70000 support zone. From here we’re looking to continue bearish and enter specifically on lower high setups. This could be a multiple setup analysis if price action continues to drop. Trade scenario 2: For us to consider AU bullish again we need to see a break back above 0.71150 with a higher low above.
Short
by ForexLeague
AUD USD - FUNDAMENTAL DRIVERSAUD FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy At the May policy decision, the RBA made a hawkish turn by raising the cash rate by 0.25% versus STIR expectations of a 15bsp move. Even though there were some hawkish takes looking for a 40bsp move, the 25bsp was still higher than consensus expectations. The bank noted that inflation pressures have risen more than they expected, even without a sharp rise in wages, and means that further increases in the cash rate will be required to bring inflation back in line with their target. They also surprised markets on the balance sheet side by announcing that they are starting passive QT by stopping the reinvestment of maturing bonds. The hawkish surprise was enough to see STIR markets price in >60% chance of a 50bsp hike for the June meeting despite comments from Gov Lowe who said they don’t preclude a bigger or smaller rate move than 25bsp in the future. All-in-all the decision from the RBA was hawkish and has finally kick started the bank’s hiking cycle and should provide support for the AUD in the med-term as long as the bank keeps tightening expectations intact. 2. Idiosyncratic Drivers & Intermarket Analysis Apart from the RBA, there are 2 key drivers we’re watching for the med-term outlook: China – With the PBoC & CCP stepping up monetary and fiscal stimulus, any recovery in China usually bodes well for Australia (40% of exports goes to China). It has also meant that the virus situation in China posed short-term downside risks for AUD as it has pushed back recovery expectations. Thus, virus and stimulus developments in China remains key for the AUD. However, as long as recovery expectations in China remain intact, it bodes well for the med-term economic outlook for Australia as well. The AUKUS defence pact could see retaliation against Aussie goods and is worth keeping on the radar as well Commodities – Iron Ore (31%), Coal (14%) and LNG (10%) is more than 50% of Aussie exports, with the recent rise in prices giving the AUD a lot of support from a terms of trade perspective. As long as these key commodities remain supported it remains supportive for the AUD, but of course that also means any sizeable corrections will weigh on the AUD. Thus, geopolitical and China demand developments remain key focus points. 3. Global Risk Outlook As a high-beta currency, the AUD usually benefits from overall positive risk sentiment as well as environments that benefit pro-cyclical assets. Thus, both short-term (immediate) and med-term (underlying) risk sentiment will always be a key consideration for the AUD. 4. CFTC Analysis Very close to neutral signals for AUD positioning. Recent price action has been tricky with overall risk off sentiment and China growth concerns. That also means if risk sentiment can continue to find some reprieve this week it could see some short-term recovery in the AUD and will as always be a key focus for the week ahead. USD FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy In May the Fed delivered on hawkish expectations by hiking the Fed Funds Rate by 50bsp and also confirmed that the committee expects further 50bsp hikes to be appropriate. The fed also stuck to a familiar hawkish tone by downplaying the prospects of an imminent recession by explaining that even though the economy contracted in Q1, that household spending and business investment remained strong. The Chair also stuck to their guns regarding the rate path by suggesting that they think reaching neutral (currently estimated at 2.4%) before year-end would be appropriate and will assess the need for further hikes when they get there. There were however some less hawkish elements which saw a very classic ‘sell-the-fact’ reaction in major asset classes. The first one was on the Quantitative Tightening front where the bank decided on a phased approach for balance sheet reduction by starting the monthly caps at 30bn (treasuries) and 17.5bn ( MBS ) and pushing it up to the expected $60bn (treasuries) and $35bn ( MBS ) over a three-month timeframe. The second less hawkish element was comments from Chair Powell who took 75bsp hikes off the table saying the committee was not actively considering rate moves of that size. Interestingly, it seems STIR markets did not really believe the Fed as the probability of a 75bsp hike stood at >70% directly following the presser. All-in-all, the meeting provided a short-term ‘sell-the-fact’ opportunity, but also cemented the view that despite signs of a slowing economy and despite clear stress in financial markets, the Fed is sticking to their aggressive tightening for now. 2. Global & Domestic Economy The USD’s global usage means it’s usually inversely correlated to the global economy and global trade. The USD usually appreciates when growth & inflation slows (disinflation) and depreciates when growth & inflation accelerates (reflation). Expectations of a cyclical slowdown have been USD positive. However, we think a lot of the growth concerns might be reflected in recent USD appreciation already. Furthermore, the USD has not been responding positively to bad data like we’ve seen from the start of the year. More recently we’ve seen the USD depreciate on bad data which could suggest that the USD’s driver has temporarily shifted away from the growth focus and shifted towards a Fed focus as the worse the incoming data becomes the higher the likelihood of a less aggressive Fed in the months ahead. Incoming data will be watched closely in relation to the infamous ‘Fed Put’. If growth data slows but not enough to stop the Fed’s hawkish path it’s USD positive, but if the data cause a Fed pivot that’ll be a big negative for the USD. 3. CFTC Analysis An overall bearish positioning change across major participant categories last week. Aggregate USD positioning remains close to 1 standard deviation above the mean, and close to prior tops where the USD topped out in previous cycles. That means we don’t want to chase the USD higher from here in the short-term.
by thunderpips
1
AUD USD - FUNDAMENTAL DRIVERSAUD FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy At the May policy decision, the RBA made a hawkish turn by raising the cash rate by 0.25% versus STIR expectations of a 15bsp move. Even though there were some hawkish takes looking for a 40bsp move, the 25bsp was still higher than consensus expectations. The bank noted that inflation pressures have risen more than they expected, even without a sharp rise in wages, and means that further increases in the cash rate will be required to bring inflation back in line with their target. They also surprised markets on the balance sheet side by announcing that they are starting passive QT by stopping the reinvestment of maturing bonds. The hawkish surprise was enough to see STIR markets price in >60% chance of a 50bsp hike for the June meeting despite comments from Gov Lowe who said they don’t preclude a bigger or smaller rate move than 25bsp in the future. All-in-all the decision from the RBA was hawkish and has finally kick started the bank’s hiking cycle and should provide support for the AUD in the med-term as long as the bank keeps tightening expectations intact. 2. Idiosyncratic Drivers & Intermarket Analysis Apart from the RBA, there are 2 key drivers we’re watching for the med-term outlook: China – With the PBoC & CCP stepping up monetary and fiscal stimulus, any recovery in China usually bodes well for Australia (40% of exports goes to China). It has also meant that the virus situation in China posed short-term downside risks for AUD as it has pushed back recovery expectations. Thus, virus and stimulus developments in China remains key for the AUD. However, as long as recovery expectations in China remain intact, it bodes well for the med-term economic outlook for Australia as well. The AUKUS defence pact could see retaliation against Aussie goods and is worth keeping on the radar as well Commodities – Iron Ore (31%), Coal (14%) and LNG (10%) is more than 50% of Aussie exports, with the recent rise in prices giving the AUD a lot of support from a terms of trade perspective. As long as these key commodities remain supported it remains supportive for the AUD, but of course that also means any sizeable corrections will weigh on the AUD. Thus, geopolitical and China demand developments remain key focus points. 3. Global Risk Outlook As a high-beta currency, the AUD usually benefits from overall positive risk sentiment as well as environments that benefit pro-cyclical assets. Thus, both short-term (immediate) and med-term (underlying) risk sentiment will always be a key consideration for the AUD. 4. CFTC Analysis Very close to neutral signals for AUD positioning. Recent price action has been tricky with overall risk off sentiment and China growth concerns. That also means if risk sentiment can continue to find some reprieve this week it could see some short-term recovery in the AUD and will as always be a key focus for the week ahead. 5. The Week Ahead For the AUD the focus for the week ahead will be on China, commodities , and the RBA policy decision. The covid situation in China remains important, and the hope is that either the government eases up more of the draconian restrictions or we see additional economic support. Commodities like Iron Ore and Coal prices will be eyed as usual, as both commodities have been struggling to hold onto any decent upside momentum. Any negative price action will be important for the AUD. We also have the RBA policy decision coming up on Tuesday, where markets are fully pricing in another 25bsp hike for the bank. Even though STIR markets are pricing in 30bsp of tightening, there is a few participants calling for a 40bsp hike given the growing inflation concerns and cost living squeeze facing Australia consumers. It would make sense for the RBA to learn from other central banks and slam on the breaks a bit harder as early as they can. The big risk to this view of course is the Q1 wage print which came in fairly soft and still a distance away from the RBA’s preferred 3.0% wage growth level. That might see the bank opting for a calmer 25bsp hike instead. An as expected 25bsp probably won’t be enough to give the AUD a lift, but a surprise aggressive tilt could be just what the doctor ordered to provide some upside for the AUD. As always, risk sentiment will also be in focus, especially after another stronger close for equities on Friday. Any continuation in that positive risk sentiment should offer some support for the AUD, while a resumption of the negative mood is expected to weigh on the currency. USD FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy In May the Fed delivered on hawkish expectations by hiking the Fed Funds Rate by 50bsp and also confirmed that the committee expects further 50bsp hikes to be appropriate. The fed also stuck to a familiar hawkish tone by downplaying the prospects of an imminent recession by explaining that even though the economy contracted in Q1, that household spending and business investment remained strong. The Chair also stuck to their guns regarding the rate path by suggesting that they think reaching neutral (currently estimated at 2.4%) before year-end would be appropriate and will assess the need for further hikes when they get there. There were however some less hawkish elements which saw a very classic ‘sell-the-fact’ reaction in major asset classes. The first one was on the Quantitative Tightening front where the bank decided on a phased approach for balance sheet reduction by starting the monthly caps at 30bn (treasuries) and 17.5bn ( MBS ) and pushing it up to the expected $60bn (treasuries) and $35bn ( MBS ) over a three-month timeframe. The second less hawkish element was comments from Chair Powell who took 75bsp hikes off the table saying the committee was not actively considering rate moves of that size. Interestingly, it seems STIR markets did not really believe the Fed as the probability of a 75bsp hike stood at >70% directly following the presser. All-in-all, the meeting provided a short-term ‘sell-the-fact’ opportunity, but also cemented the view that despite signs of a slowing economy and despite clear stress in financial markets, the Fed is sticking to their aggressive tightening for now. 2. Global & Domestic Economy The USD’s global usage means it’s usually inversely correlated to the global economy and global trade. The USD usually appreciates when growth & inflation slows (disinflation) and depreciates when growth & inflation accelerates (reflation). Expectations of a cyclical slowdown have been USD positive. However, we think a lot of the growth concerns might be reflected in recent USD appreciation already. Furthermore, the USD has not been responding positively to bad data like we’ve seen from the start of the year. More recently we’ve seen the USD depreciate on bad data which could suggest that the USD’s driver has temporarily shifted away from the growth focus and shifted towards a Fed focus as the worse the incoming data becomes the higher the likelihood of a less aggressive Fed in the months ahead. Incoming data will be watched closely in relation to the infamous ‘Fed Put’. If growth data slows but not enough to stop the Fed’s hawkish path it’s USD positive, but if the data cause a Fed pivot that’ll be a big negative for the USD. 3. CFTC Analysis An overall bearish positioning change across major participant categories last week. Aggregate USD positioning remains close to 1 standard deviation above the mean, and close to prior tops where the USD topped out in previous cycles. That means we don’t want to chase the USD higher from here in the short-term. 4. The Week Ahead We have shifted our bias for the USD from bullish to weak bullish based on the USD’s recent negative reaction to bad US economic data. If this trend persists, we could very likely be changing our fundamental bias for the USD to neutral. In the week ahead the main event in focus for the USD will be the May CPI data. It was clear from the past two CPI prints that we are likely past the peak in YY terms, but the peak is no longer enough to satisfy markets. From here the focus for CPI won’t only be on the declining level but also the pace at which it slows, which means monthly data points are very important as well. That means a lot of focus on how monthly CPI figures are impacted by big fluctuations in things like food, energy, and shelter prices. Both core measures are expected to slow again, while headline YY expected to stay flat, but a big acceleration expected for headline CPI due to recent upside seen in commodity prices. With markets already expecting a further move lower in the core components we will likely need a very significant miss to really ‘surprise’ markets. However, big surprise drops in both headline and core would still be expected to put pressure on the USD and US10Y while offering support for things like Gold and equities.
by thunderpips
Today’s Notable Sentiment ShiftsAUD – The Australian dollar was indecisive on Monday, with investors split on whether Australia’s central bank will hike interest rates by a “usual” quarter point at their June meeting or opt for something more dramatic. Consensus looks for a quarter point hike to 0.60%, but Nomura notes that “by returning the cash rate to 0.75%, the RBA would be completing an unwind of the emergency rate cuts it delivered in 2020. This would fit with a narrative that the emergency has passed and might be a relatively easy message to convey.”
by thunderpips
A Kangaroo Hop!Things seem to be going well down under. With Iron Ore prices jumping close to 8% last week, Australia, the largest exporter of the raw material stands to benefit greatly. In 2021, Iron Ore exports totaled close to US$120 billion. This contributes greatly to the demand side pressure on the Australian dollar. Looking at the charts, the AUDUSD pair is currently trading at the bottom of the channel support on the 1-hr time frame. With the 200-period moving average right below current levels, we think downside resistance will prove strong and prices will bounce off the bottom of the rising channel quickly. Stay tuned to the Reserve Bank of Australia’s meeting tomorrow and time your entry there! Assuming no surprises and the technical supports are intact, we favor the long side for the AUDUSD pair. Entry at 0.7190, stop below 0.712. Targets are 0.7346 and 0.7460. Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
CME:6A1!Long
by inspirante
8
AUD USD - FUNDAMENTAL DRIVERSAUD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy At the May policy decision, the RBA made a hawkish turn by raising the cash rate by 0.25% versus STIR expectations of a 15bsp move. Even though there were some hawkish takes looking for a 40bsp move, the 25bsp was still higher than consensus expectations. The bank noted that inflation pressures have risen more than they expected, even without a sharp rise in wages, and means that further increases in the cash rate will be required to bring inflation back in line with their target. They also surprised markets on the balance sheet side by announcing that they are starting passive QT by stopping the reinvestment of maturing bonds. The hawkish surprise was enough to see STIR markets price in >60% chance of a 50bsp hike for the June meeting despite comments from Gov Lowe who said they don’t preclude a bigger or smaller rate move than 25bsp in the future. All-in-all the decision from the RBA was hawkish and has finally kick started the bank’s hiking cycle and should provide support for the AUD in the med-term as long as the bank keeps tightening expectations intact. 2. Idiosyncratic Drivers & Intermarket Analysis Apart from the RBA, there are 3 drivers we’re watching for the med-term outlook: Recovery – unlike other nations where growth & inflation is expected to slow, Australia is expected to see recovery, mostly thanks to stimulus and recovery in China China – With the PBoC & CCP stepping up monetary and fiscal stimulus, any recovery in China bodes well for Australia (40% of exports goes to China). It has also meant that the virus situation in China posed short-term downside risks for AUD as it has pushed back recovery expectations. Thus, virus and stimulus developments in China remains key for the AUD. The AUKUS defence pact could see retaliation against Aussie goods and is worth keeping on the radar as well Commodities – Iron Ore (31%), Coal (14%) and LNG (10%) is more than 50% of Aussie exports, with rising prices giving the AUD huge support from terms of trade. If commodities remain supported it remains a support for AUD, but of course also means any sizeable corrections will weigh on the AUD. That means geopolitical and China demand developments remain key focus points. 3. Global Risk Outlook As a high-beta currency, the AUD usually benefits from overall positive risk sentiment as well as environments that benefit pro-cyclical assets. Thus, both short-term (immediate) and med-term (underlying) risk sentiment will always be a key consideration for the AUD. 4. CFTC Analysis Very close to neutral signals for AUD positioning. Recent price action has been tricky with overall risk off sentiment and China growth concerns. That also means if risk sentiment can continue to find some reprieve this week it could see some short-term recovery in the AUD and will as always be a key focus for the week ahead. 5. The Week Ahead For the AUD the focus for the week ahead will be on China, commodities and Q1 GDP. The covid situation in China remains important, and the hope is that either the government eases up some of the draconian restrictions or we see some easing of restrictions. China also releases their latest batch of PMIs on Tuesday which will be eyed closely to see how bad the recent lockdowns have continued to weigh on growth. Any better-then-expected print could offer upside for the AUD and the China A50 index. On the data front, we have Q1 GDP, which could offer some volatility for the AUD. Keep in mind that key inputs for GDP like construction work done and private capex both surprised lower last week, so a miss in company profits could point to a downside surprise in GDP on Wednesday. Commodities like Iron Ore and Coal prices will be eyed as usual, as both commodities have been struggling to hold onto any decent upside momentum. Any negative price action will be important for the AUD. As always, risk sentiment will also be in focus, especially after another stronger close for equities on Friday. Any continuation in that positive risk sentiment should offer some support for the AUD, while a resumption of the negative mood is expected to weigh on the currency. USD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy Monetary Policy At the May meeting, the Fed delivered on hawkish expectations regarding rates by hiking the Fed Funds Rate by 50bsp and also confirmed that the committee expects further 50bsp hikes to be appropriate. The fed also stuck to a familiar hawkish tone by downplaying the prospects of an imminent recession by explaining that even though the economy contracted in Q1, that household spending and business investment remained strong. The Chair also stuck to their guns regarding the rate path by suggesting that they think reaching neutral (currently estimated at 2.4%) before year-end would be appropriate and will assess the need for further hikes when they get there. There were however some less hawkish elements which saw a very classic ‘sell-the-fact’ reaction in major asset classes. The first one was on the Quantitative Tightening front where the bank decided on a phased approach for balance sheet reduction by starting the monthly caps at 30bn (treasuries) and 17.5bn ( MBS ) and pushing it up to the expected $60bn (treasuries) and $35bn ( MBS ) over a three-month timeframe. The second less hawkish element was comments from Chair Powell who took 75bsp hikes off the table saying the committee was not actively considering rate moves of that size. Interestingly, it seems STIR markets did not really believe the Fed as the probability of a 75bsp hike stood at >70% directly following the presser. All-in-all, the meeting provided a short-term ‘sell-the-fact’ opportunity, but also cemented the view that despite signs of a slowing economy and despite clear stress in financial markets, the Fed is sticking to their aggressive tightening for now. 2. Global & Domestic Economy As the reserve currency, the USD’s global usage means it’s usually inversely correlated to the global economy and global trade. The USD usually appreciates when growth & inflation slows (disinflation) and depreciates when growth & inflation accelerates (reflation). Thus, current expectations of a cyclical slowdown are a positive driver for the Dollar. Incoming data will be watched in relation to the ‘Fed Put’ as there are many similarities between now and 4Q18, where the Fed were also tightened into a slowdown. If growth data slows and the Fed stays hawkish it’s a positive for the USD, however if the Fed pivots dovish that’ll be a negative driver for the USD. 3. CFTC Analysis Aggregate USD positioning remains close to 1 standard deviation above the mean, and close to prior tops where the USD topped out in previous cycles. That does not change the bullish outlook for the USD in the med-term but means that we would wait for pullbacks before initiating new med-term longs. 4. The Week Ahead For the week ahead the focus will fall on the latest PMI releases and of course Friday’s NFP. From the start of the year the USD has been mostly supported on bad data as markets were pricing in a global slowdown in growth. However, the USD’s reaction change, to economic data (negative data impacting the USD negatively) has been important. We think this could be a first step for markets to start pricing in higher probabilities of a less aggressive Fed if negative data continues to build. For the past few months, the labour market data has been solid, not showing the same type of slowing as we’ve seen in other parts of the economy. This should not be much of a surprise as labour data is usually considered as a lagging indicator, meaning that a slowdown in the economy will take longer to show up in the labour market. Even though the data has been solid, we’ve already heard from very big Tech giants like Microsoft , Amazon, Twitter and Facebook that they are planning to slowdown hiring. If the slowdown starts showing up in the labour market, it could add additional pressure on the USD and US10Y . A surprise miss could create some risk positive price action and some USD downside which could offer some attractive short-term opportunities. Risk sentiment will be important to watch after last week’s recovery in risk assets. On the other hand, if the recent risk positive price action runs out of steam, it should be supportive for the USD. For now, the USD is still looking tactically stretched, so we would prefer to look for some short-term downside on a big miss in US economic data as opposed to entering new med-term longs.
by thunderpips
AUDUSD 4hour Analysis May 30th, 2022AUDUSD Bullish Idea Weekly Trend: Bearish Daily Trend: Bearish 4Hour Trend: Bullish Trade scenario 1: Overall AU has been bearish on higher timeframes but has been looking very bullish on the 4hour timeframe. The most likely scenario is that price action reaches our 0.72500 resistance level before we see any sort of reaction. Look for higher lows at this point near 0.71200 for re-entries. Consider further long scenarios if 0.72500 resistance breaks and we spot structure above. Trade scenario 2: For us to consider AU bearish again we first need to see 0.71200 break with a lower high below.
Long
by ForexLeague