Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
AUD: lifting weights
2020-04-07 • Updated
The RBA left the interest rate at 0.25% today. As such, it is a record low level. In the context of the situation, it is natural as seen as a response to the damage inflicted by the virus. In fact, given the severity and uncertainty of the economic fallout still yet to evaluate, it may come as a sign of strength that the rate was not decreased further.
China reports no new mortal cases and is clearly on the way out of the pandemic. Consequently, it’s economy is gradually recovering and gaining the moment it lost three months ago. For Australia, that is vital given the close trade relationship it has with China. Although Australia itself is not yet through the crisis, the improved position of its main trade partners improves its own economic outlook and bring some positive notes to its currency.
The best contrast
As we have seen before, the best barometer for the mood of the AUD is the JPY. Generally, AUD behaves in a similar manner to all its counterparts in the Forex market, but the Japanese yen makes it much more visible than, say, against the USD, in many cases. So as we have said, the improving position of the AUD is clearly visible on the chart. However, the upward dynamics should also be ascribed to the weakening of the JPY. Will the resistance of 68.81 be crossed? Very possibly, especially given the recent announcement of a state of emergency in Japan. That doesn’t change the strategic layout though. That’s why keep in mind that the current picture of the AUD climbing further is merely an effort of this currency to inch above the 10-year low it is in. In other words, the outlook for the AUD is positive in the short-term. In the long-term, there are miles to go to reverse a heavy outlook for the Australian dollar.
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
Bearish Scenario: Sales below 80.00 with TP1: 79.34, TP2: 78.94, TP3: 78.55, and 78.00 Bullish Scenario: Buys above 78.00 (wait for a retracement to the zone) with TP: 79.34 TP2: 80.00, and TP3: 81.00
The month of February saw markets make several instinctive moves as well as create opportunities for proper leveraging of fundamental releases. Despite being a leap-year, there wasn’t any real impact on price delivery in the course of the month. As we await the opportunities that lie ahead in the month of March, here are a few thoughts to consider.
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In the early hours of Tuesday, the US Dollar faces challenges in maintaining its strength against major currencies, with the US Dollar Index struggling to surpass the 104.00 mark. Investors are eagerly anticipating the release of key economic data, including January Durable Goods Orders and the Conference Board's Consumer Confidence Index for February. Additionally, the economic calendar includes reports...