Rate cut concerns weigh on the Australian Dollar

  • A better than anticipated Employment report for the Australia on Thursday initially saw a more positive tone for AUDUSD, but then a note from the Australian Investment Bank, Westpac that forecast two rate cuts for 2019 saw a selloff for AUDUSD.
  • This price action, alongside ongoing concerns regarding global growth (despite positive soundings from US-Sino trade talks), has sustained an intermediate-term bearish theme for AUDUSD into latter February and likely on into March.

AUDUSD intermediate-term bear theme reenergising

An initial prod higher Thursday through .7177/80 resistances, but then a plunge back lower through supports at .7100/7097 and into the .7077/70 support area, plus through the up trend line from early/mid-February, fully rejecting recent upside forces and shifting the risks lower for Friday.

The early February push .7073 set an intermediate-term bear trend.

For Today:                                                        

  • We see a downside bias through .7071/70; break here aims for the key swing low at .7050, then .7024, maybe even the .7000/6991 area.
  • But above .7122 opens risk up to .7168.

Intermediate-term Outlook – Downside Risks: We see a downside risk for .6916.

  • Lower targets would be .6829 and .6738
  • What Changes This? Above .7246 shifts the outlook straight to a bull theme.

4 Hour AUDUSD Chart

audusd chart


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Current Market Analysis
Euro breaks down, GBPCAD threatens upside

US Dollar Index holds support and rebounds EURUSD seeds multiple negative signals, downside risks GBPUSD sends buy signal GBPCAD sets up more bullish AUDUSD negative and USDCAD buy signal USDTRY and USDBRL surge

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