AUD/USD news - page 19
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AUD/USD: Bearish and Short – MS
The Australian dollar could not maintain the momentum and surrendered to the strength of the greenback.
What’s next? The team at Morgan Stanley suggests going short on the Aussie,and explains with 3 charts:
Here is their view :
Morgan Stanley picks AUD/USD as its technical FX chart of the week where MS remains bearish and looks for new selling opportunities. MS provides some important levels for this potential trade where traders should consider entering this trade and placing their stops and targets accordingly.
On the long term AUD/USD Chart:
“We are bearish on AUDUSD over the long term, targeting 0.68 for year end. AUD is currently in a 5 th wave part of a larger [3]rd wave. The substructure of the 5 th wave is incomplete as shown below, suggesting there is further downside for the currency pair,” MS clarifies.
“AUDUSD positioning is currently light, with many of the previous shorts being taken off, opening room for potential downside when positions come back. We believe AUDUSD is currently in the (5)th downward leg of the larger 5 th wave structure. We suggest selling AUDUSD and put stops at 0.82, just above the (4) th wave high as a move above here suggests that wave is incomplete,” MS advises.
USD/CAD: Loonie Plunges to 1.5-Month Low on Lower Oil, US Data
The resource-linked Canadian dollar struggled in the face of falling crude oil prices, as well as the pressures from improving US figures.
The loonie traded at a fresh six-week low, falling 1.01% to C$1.2437 against the greenback, after reaching the intraday high of C$1.2447.
"It is part of the bullish US dollar move that we've seen play out since Yellen’s speech on Friday. Today’s data came in much stronger than expected," director of foreign-exchange strategy at CIBC World Markets, Bipan Rai, told WBP Online. "We expect to see some form of the US dollar buying at least for the near term."
US data
The greenback’s demand improved all across the board following optimistic macro figures released on Tuesday. May’s consumer confidence booked 95.4, slightly beating consensus of 95.2. Also, new home sales jumped to 517,000 in April, rising 6.8% month-on-month.
Meanwhile, the services PMI missed estimates, reporting 56.4 in May. Despite the lower figure, the PMI still remained firmly above the 50.0 measure, which should be enough to keep rate expectations intact. Durable goods orders fell by 0.5% in April, while core durable goods grew 0.5%, beating estimates of a 0.3% print.
The greenback’s advance against its major peers was triggered by Friday’s upbeat US CPI data coupled with Federal Reserve Chair Janet Yellen’s speech.
At the same time, crude oil prices suffered major losses during Tuesday’s session, weighing on the loonie. WTI futures declined 2.15% to $58.44 per barrel and Brent futures dropped 2.11% to $64.14 per barrel.
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AUD/USD forecast for the week of June 1, 2015
The AUD/USD pair fell hard during the course of the week, as it appears we are now heading towards the 0.75 level yet again. This is the bottom a recent consolidation, and with the growing momentum to the downside, we would not be surprised if that level got broken to the downside going forward. If it does, that of course is a very bearish sign, and we would more than likely head towards the 0.70 level. On the other hand, if we form some type of supportive candle near the 0.76 level, it could show that we are ready to continue consolidating overall. The consolidation has been between the 0.75 level on the bottom, and the 0.80 level on the top.
The 0.80 level was massively supportive and resistive over the longer term. It wasn’t that long ago, just a few years ago for that matter, that the 0.80 level is almost unimaginable but we managed to break above there and continue to go much higher. Because of this, there is going to be a significant amount of psychological resistance at the 0.80 level anyway. It is because of that fact that if we get a bounce from the 0.75 region, we do not anticipate the market a break well above the 0.0 level anyway.
On the other hand, the market could very easily drop to the 0.70 level based upon longer-term charts as it does not have anywhere near the psychological resistance or support that the 0.80 level has. Because of this, we do favor the downside a little bit, but you will have to pay attention to the gold markets which have significant support in the region of $1180. Typically, both markets will have to move in the same direction, although it is not necessarily always the case. There have been times where the US dollar strengthens and gold does simultaneously. It is a little counterintuitive for what most of you has seen, but there has been times in the past were this has been the case.
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AUD/USD Forecast June 1-5
The AUD/USD reversed directions last week, losing some 230 points. AUD/USD closed the week at 0.7814. It’s a very busy week ahead, with 13 events on the calendar. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
The dollar got a boost from strong core durables data out of the US and managed to weather weak GDP and employment numbers. In Australia, Private Capital Expenditure was unexpectedly weak, posting a sharp decline.
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Australian Treasury Secretary: Forecasts point to significant economic headwinds
Australian Treasury Secretary John Fraser commenting at a parliamentary committee
AUD/USD: Aussie Gains Most Over Month on Triple Confluence
The aussie roared against the US dollar on Tuesday, posting the biggest one-day gain since April 28 and spiked above the downward trendline which has been in place since the middle of May.
Today's rather exceptional leap took advantage of several elements in place, as the AUD/USD cross recently sank closer to its strong support and six-year bottom around the $0.76 level, while the Reserve Bank of Australia held the cash rate unchanged at 2%, leaving an open door to act appropriately in sync with the future development of the economy.
Moreover, the greenback had to deal with several obstacles during the US session, starting with downbeat factory orders, to a cautious Federal Reserve official and finally with marginally optimistic sentiment toward a Greek solution.
The aussie gained 2.22% to trade at $0.774 against the buck on Tuesday afternoon, while the US dollar index posted a heavy loss of 1.68% to 95.88 points.
Shortly after the US opening bell, factory orders for April unexpectedly dived 0.4% month-to-month, more than the anticipated fall of 0.1%, from a reading of 2.1% booked in March.
Meanwhile, Federal Reserve (Fed) Governor and Federal Open Market Committee voting member Lael Brainard grabbed attention as she spoke on the US economic outlook and monetary policy.She remained cautious about the development of the US economy during the second quarter despite several early signs of upbeat macro data.
"My own reading is that earlier, more optimistic growth projections may have placed too much weight on the boost to spending from lower energy prices and too little weight on the negative implications for aggregate demand of the significant increase in the foreign exchange value of the dollar and large decline in the price of crude oil," Brainard explained.
As mentioned, the RBA kept the cash rate at 2%, but said that future information on economic and financial conditions "will inform the Board's assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target."
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AUD/USD: Aussie Sinks as Downbeat Data Signals Need for Further Easing
Both retail sales and overseas trade data for April came in much weaker than the market had expected on Thursday, sending the Australian dollar down against the greenback and the New Zealand dollar.
The AUD/USD pair fell 0.76% to $0.7725 on Thursday afternoon in Sydney, from $0.7785 at the close of trade in New York on Wednesday, and eased from $0.7773 where the currency traded before the data was released.
According to the Australian Bureau of Statistics (ABS), retail sales were flat in April after rising 0.2% in March, while analysts had picked sales to grow 0.4% in April.
Overseas trade data released at the same time on Thursday showed Australia's trade deficit growing to a record $3.89 billion in April, from $1.23 billion in March. Exports unexpectedly plunged 6% in April, while imports rose 4%.
The fresh figures show that demand was weak at the beginning of the June quarter, which is likely to see GDP growth decelerate from the unexpectedly-high 0.9% recorded in the March quarter.
On Tuesday the Reserve Bank of Australia (RBA) gave an upbeat assessment of demand, saying that household spending had "improved" and that exports were rising. Today's figures could see the bank reassess this view at next month's cash rate meeting, which would pave the way for further interest rate cuts.
The RBA has cut the cash rate twice already this year, which has brought the policy rate down to a record-low 2%. This week the RBA decided to make no changes to monetary policy, but indicated that future policy moves would be data dependent.
The Australian dollar also traded down sharply against the New Zealand dollar, sliding as low as $1.0805, from $1.0883 where the crossrate started trading on Thursday.
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AUD/USD forecast for the week of June 8, 2015
The AUD/USD pair initially rallied during the course of the week, but turned back around to form a shooting star. The shooting star of course suggests that we are going to go lower, but the psychologically significant number of 0.75 is still below. With that, we need to clear that area in order to sell from a longer-term perspective. If we get a supportive candle in this area, we think the market could very well bounce towards the 0.80 level. Ultimately though, we think that this is probably more or less going to be a short-term traders market.
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AUD/USD Forecast June 8-12
AUD/USD showed some strength during the week but couldn’t consolidate the gains and ended the week almost unchanged, AUD/USD closed the week at 0.7613. It’s a busy week ahead, with 10 events on the calendar. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
The US posted an excellent NFP report, but PMI releases were a mix. In Australia, Building approvals suffered a sharp decline while a strong GDP gave the Aussie a brief boost. The RBA left its policy unchanged and didn’t offer new hints.
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RBA's Stevens Says Further Rate Cuts Still Possible; Talks Down AUD
The Reserve Bank of Australia (RBA) indicated on Wednesday that they are keeping their options open, as they attempt to offset weak investment in the mining sector through other parts of the economy.
"We remain open to the possibility of further policy easing, if that is, on balance, beneficial for sustainable growth," Stevens told an audience at the Economic Society of Australia in Brisbane on Wednesday.
The RBA has cut the cash rate twice so far this year, making its last move in May when the rate was slashed to a record-low 2%.
Stevens also used his speech as an opportunity to talk down the strength of the Australian dollar, saying that while it hadn't fallen by as much as the bank might have expected two years ago, a further fall in the exchange rate "would add both to growth and prices."
The Australian dollar fell more than 50 pips to $0.7650 after Stevens' speech, from $0.7685 beforehand, and was down 0.40% against the New Zealand dollar at $1.0731.
Stevens' speech, which focused on where the Australian economy was at currently compared to what the RBA forecast two years ago, was broadly dovish.
"In Australia, recent growth in the economy has not been as strong as we want," the policymaker said on Wednesday, blaming Australia's sharply lower terms of trade for eroding the nation's spending power and curtailing investment and employment.
His speech comes a week after GDP growth figures showed the economy growing 0.9% in the first quarter, beating most forecasts, including the RBA's.
"Indications are that this pace of growth wasn't repeated in the June quarter," Stevens said, adding that the outcome is likely to be at the bottom of the range predicted by the bank two years ago or, more likely, a bit below it.
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