AUD/USD Downside Target in Focus Ahead of RBA Minutes, China PMI
DailyFX.com -
Talking Points:
- AUD/USD at Risk for Further Loss on RBA Verbal Intervention, Slowing China Manufacturing.
- USD/JPY Range in Focus Ahead of Bank of Japan (BoJ) Interest Rate Decision.
- USDOLLAR Carves String of Lower Highs Ahead of FOMC Interest Rate Decision.
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AUD/USD
Chart - Created Using FXCM Marketscope 2.0
AUD/USD may continue to work its way towards 0.8150 (100% expansion) should the Reserve Bank of Australia (RBA) Minutes reinforce the toughened verbal intervention laid out by Governor Glenn Stevens.
China’s Purchasing Manager Index (PMI) may also drag on the aussie as manufacturing activity is expected to contract in December; will slowing global growth put increased pressure on the RBA to further reduce the benchmark interest rate?
Despite the bearish trend, DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long AUD/USD, with the ratio currently holding at +2.66.
USD/JPY
USD/JPY retains the range-bound price action from the previous week even as Prime Minister Shinzo Abe stays in office; may continue to consolidate ahead of the Bank of Japan’s (BoJ) interest rate decision on December 19 as Governor Haruhiko Kuroda remains confident in achieving the 2% target for inflation.
Nevertheless, long-term outlook for USD/JPY remains bullish especially as Japan slips back into recession; will the BoJ keep the door open to further expand its asset-purchase program?
Will favor the topside targets as USD/JPY appears to be carving a near-term base around 117.00 (61.8% expansion) to 117.20 (50% retracement).
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USDOLLAR(Ticker: USDollar):
Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
DJ-FXCM Dollar Index | 11447.38 | 11454.48 | 11406.86 | 0.20 | 79.56% |
Chart - Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar topside targets favored ahead of the Federal Open Market Committee’s (FOMC) policy meeting on December 17 as price & the Relative Strength Index (RSI) retain the bullish trends.
Fed’s forward-guidance for monetary policy is likely to heavily impact on the USDOLLAR amid speculation of seeing the central bank adopt a more hawkish tone & removing the ‘considerable time’ phrase.
Series of closes above 11,392 may highlight a near-term bottoming process for the greenback, and may produce a more meaningful run at 11,539 (78.6% expansion).
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Release | GMT | Expected | Actual |
Empire Manufacturing (DEC) | 13:30 | 12.40 | -3.58 |
Industrial Production (MoM) (NOV) | 14:15 | 0.7% | 1.3% |
Capacity Utilization (NOV) | 14:15 | 79.4% | 80.1% |
Manufacturing Production (NOV) | 14:15 | 0.5% | 1.1% |
NAHB Housing Market Index (DEC) | 15:00 | 59 | |
Net Long-Term TIC Flows (OCT) | 21:00 | -- | |
Total Net TIC Flows (OCT) | 21:00 | -- |
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--- Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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