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Talking Points: AUDUSD can’t quite break through $0.8900. EURUSD, GBPUSD stuck in month-long ranges. Target on US Dollar’s Back this Week with FOMC, GDP Due The FOMC threw the US Dollar a bone yesterday by leaving its name absent from its policy statement. Weeks earlier, policymakers queued the US Dollar up for disappointment, when it […]
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FOMC statement the other day brought nothing but a new wave of US dollars buyers and the eurusd is the pair that suffered the most given the bullishness of the Fed and the bearishness of the ECB. As a consequence, the eurusd pair broke out of an ugly triangle on the hourly chart, a triangle […]
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With the markets fully focused on the outcome of the FOMC tonight, it may be best to avoid looking at assets which will be directly impacted by the Fed’s decision. In this regard, one currency pair that has caught my eye is the AUD/CAD, which could be on the verge of resuming its downward trend. Although the AUD has strengthened recently, so has the CAD after the Bank of Canada dropped the “neutral” policy wording from its latest rate statement, which the market has interpreted as a slightly hawkish move. On top of this, the Canadian dollar (being a commodity currency) has found some support from rebounding oil prices in the past few days. With WTI crude failing to hold below the psychological $80 mark, oil prices may have already formed a near term bottom. Over the coming days and weeks, and depending on the direction of oil prices, I expect the CAD to continue outperforming the AUD, especially as the RBA is still not satisfied with the recent deprecation of the Aussie.
Meanwhile the technical picture is also looking bearish for the AUD/CAD with the 50-day moving average being below the 200. On top of this, the currency pair has recently broken below a long-term bullish trend line. That breakdown led to an eventual drop to 0.9385 where it has since bounced back strongly from, climbing in excess of 250 pips in the process. But another leg lower could now be on the cards. That is because price has failed to push through the key 0.9940/60 resistance area which was previously support. Not only that, but this is also where the back side of the broken trend line meets the 50-day moving average. So, with price failing at this key technical juncture, the odds for another move lower have meanwhile increased. What the bears need to do now is push the AUD/CAD below intraday support at 0.9880. If this level breaks down, it will probably trigger a batch of stop loss orders that may be sitting below that level, which would thus accelerate the move towards the next support at 0.9790. Meanwhile a potential break above 0.9960 could lead to a rally towards parity or even the 61.8% Fibonacci retracement level of the last downswing at 1.0020/5.
About Fawad Razaqzada
Fawad is FOREX.com’s technical analyst based in London. He entered the FX market in early 2010. Having graduated from Brunel University with a degree in economics, and mentored by some of the industry’s leading experts, he has an excellent understanding of the fundamental drivers of the markets. But it is his unique ability to predict price moves using technical analysis that has made him popular amongst his peers. Fawad is regularly quoted in the leading financial publications such as the Wall Street Journal, Reuters, Market Watch, FT and Associated Press. On a day to day basis, Fawad produces and delivers market commentary and research for FOREX.com, with an emphasis on technical analysis. He achieved his CISI Level 3 Certificate in Investments (Derivatives – Retail) in early 2011.
It’s been an exciting 24 hours for bitcoin. The cryptocurrency finally broke the $345 support, then proceeded to take out the $337 swing low. Soon after, BTC/USD fell to a daily low of $328.93. Toward the end of today’s trading session, prices gave the $330 support another try. This time the test went as low […]