AUD Price Forecast: No Respite for Aussie after Reserved China Rate Cut – DailyFX

AUD/USD analysis and issues

  • A lack of Chinese stimulus is weighing on the Australian dollar.
  • The RBA is higher than the Fed in the long run.
  • AUD/USD Turnaround or Continue?

Endorsed by Warren Venketas

Get Free Australian Dollar Predictions

Basic Background on the Australian Dollar

The Australian dollar is trading at extreme levels this Monday as the People’s Bank of China (PBOC) decided to slightly cut the rate on the 1-year LPR while keeping the 5-year rate unchanged (see economic calendar below). The unexpected result sent the growth-friendly Australian dollar lower against the US dollar, even though the DXY fell slightly on the day.

Prices across the forex market are relatively calm today, with investor uncertainty heightened by important upcoming risk events such as the BRICS summer and the Jackson Hole Economic Symposium. Fed Chairman Jerome Powell becoming the focus of Jackson Hole could change the current ‘long high’ narrative and provide some support for the declining Australian dollar.

Watch this week’s risk events: USD at Jackson Hole Symposium

AUD/USD Economic Calendar (GMT +02:00)

sauce: DailyFX Economic Calendar

Looking at the Reserve Bank of Australia (RBA) money market prices below, we see that unlike the Fed, which is expected to cut rates around May 2024, rate cut expectations are not priced in for 2023 or 2024. can not see. This interest rate differential could further extend the AUD’s topside if it pushes for a more accommodative stance this week.

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RBA interest rate probability

Source: Refinitiv

technical analysis

AUD/USD daily chart

Chart Creator: Warren Venketas, TradingView

Daily AUD/USD price action continues 0.6387 Swing support and daily confirmation candlestick closes could trigger further bar declines towards November 2022 lows. 0.6272. That said, the Relative Strength Index (RSI) is currently in oversold territory, suggesting a possible end to the recent downtrend, although any move against the general trend carries a high degree of risk. There is a possibility that

Jackson Hole has traditionally experienced large price swings, so investors may want to wait for fundamental factors to occur before entering the market. Traders’ hesitation has already begun with the latest high-volume Doge candlestick that could signal a pause before the resumption or shift of the downtrend.

Main resistance levels:

Primary support levels:

IG Client Sentiment Data: Bullish (AUD/USD)

IGCS Shows Retail Traders Show Net Profit Now length In AUD/USD, 81% Percentage of traders currently holding long positions. Download our latest sentiment guide (below) to see how daily and weekly position changes impact AUD/USD sentiment and outlook.

Technical analysis overview

market sentiment

Endorsed by Warren Venketas

Get in touch and follow me Warrenon Twitter: @WVenketas

Daily FX We provide technical analysis on Forex news and trends affecting the global currency markets.

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