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Trading Outlook – AUD/USD

Jarratt Davis
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Originally updated: 07:10

Trading Bias: SHORT

Currency pair: AUD/USD

Current Sentiment: Bearish

In today’s trading session we will be focussing on selling opportunities on the AUD/USD.

Fundamentals:

Selling pressure continues to mount on the AUD with unemployment rising to its highest levels in 12 years in Australia, this saw AUDUSD trade at levels not seen in over 5 years with further weakness expected on the currency as the market anticipates commentary from the RBA this evening, with forecasts for the pair to grind down to 0.75 over the coming weeks.

It bears mentioning that historically the RBA have always enacted monetary policy changes in cycles therefore expect some volatility heading into Gov Stevens speech this evening as investors will be scrutinising his rhetoric for subtle hints as to what their next action might be.

Technicals:

We expect this pair to sell off during today’s session.

There is strong resistance at 0.77150 – 0.77210 which could provide trading opportunities should the price pull back. Look for the price to bounce off this level if it retraces back to it.

Remember to be aware of intra-day news as this can very often change the sentiment which makes our trade weaker. Look for any news that could be positive for this pair, which could change the sentiment albeit temporarily to bullish.

Other Market Moving News:

Greece and the EU failed to reach an agreement weighing on the EUR across most pairs with the next discussion between the two authorities scheduled for the 16th of February.

Looking ahead on today’s calendar we have the UK  inflation report and details of Gov Carneys open letter to UK chancellor to detail while inflation has fallen below target band. Carney is expected to reiterate that drop in inflation is a consequence of drop in oil prices and is actually good with the UK economy in the long run, with the Bank of England keeping their focus on jobs data and wage growth when considering a rate hike this could see GBP strength if commentary is as expected thus presenting buying opportunities on GBP/AUD.

Later in the session we also have data from the US in the form of retail/core retail sales data and unemployment claims – for the most part figures are expected to come out relatively unchanged with little expected market reaction unless we get a notable deviation.

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