AUD/USD Downside Target in Focus Ahead of RBA Minutes, China PMI
Talking Points:
- AUD/USD at Risk for Further Loss on RBA Verbal Intervention, Slowing China Manufacturing.
- USD/JPY Range in Focus Ahead of Bank of Japan (BoJ) Interest Rate Decision.
- USDOLLAR Carves String of Lower Highs Ahead of FOMC Interest Rate Decision.
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AUD/USD
Chart - Created Using FXCM Marketscope 2.0
- AUD/USD may continue to work its way towards 0.8150 (100% expansion) should the Reserve Bank of Australia (RBA) Minutes reinforce the toughened verbal intervention laid out by Governor Glenn Stevens.
- China’s Purchasing Manager Index (PMI) may also drag on the aussie as manufacturing activity is expected to contract in December; will slowing global growth put increased pressure on the RBA to further reduce the benchmark interest rate?
- Despite the bearish trend, DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long AUD/USD, with the ratio currently holding at +2.66.
USD/JPY
- USD/JPY retains the range-bound price action from the previous week even as Prime Minister Shinzo Abe stays in office; may continue to consolidate ahead of the Bank of Japan’s (BoJ) interest rate decision on December 19 as Governor Haruhiko Kuroda remains confident in achieving the 2% target for inflation.
- Nevertheless, long-term outlook for USD/JPY remains bullish especially as Japan slips back into recession; will the BoJ keep the door open to further expand its asset-purchase program?
- Will favor the topside targets as USD/JPY appears to be carving a near-term base around 117.00 (61.8% expansion) to 117.20 (50% retracement).
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USDOLLAR(Ticker: USDollar):
|
Index |
Last |
High |
Low |
Daily Change (%) |
Daily Range (% of ATR) |
|
DJ-FXCM Dollar Index |
11447.38 |
11454.48 |
11406.86 |
0.20 |
79.56% |
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar topside targets favored ahead of the Federal Open Market Committee’s (FOMC) policy meeting on December 17 as price & the Relative Strength Index (RSI) retain the bullish trends.
- Fed’s forward-guidance for monetary policy is likely to heavily impact on the USDOLLAR amid speculation of seeing the central bank adopt a more hawkish tone & removing the ‘considerable time’ phrase.
- Series of closes above 11,392 may highlight a near-term bottoming process for the greenback, and may produce a more meaningful run at 11,539 (78.6% expansion).
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|
Release |
GMT |
Expected |
Actual |
|
Empire Manufacturing (DEC) |
13:30 |
12.40 |
-3.58 |
|
Industrial Production (MoM) (NOV) |
14:15 |
0.7% |
1.3% |
|
Capacity Utilization (NOV) |
14:15 |
79.4% |
80.1% |
|
Manufacturing Production (NOV) |
14:15 |
0.5% |
1.1% |
|
NAHB Housing Market Index (DEC) |
15:00 |
59 | |
|
Net Long-Term TIC Flows (OCT) |
21:00 |
-- | |
|
Total Net TIC Flows (OCT) |
21:00 |
-- |
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--- Written by David Song, Currency Analyst
To contact David, e-mail [email protected]. Follow me on Twitter at @DavidJSong.
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