AUD/USD March Outlook Hinges on RBA Forward-Guidance, 4Q GDP Report
Talking Points:
- AUD/USD Retail Crowd Turns Net-Long Ahead of RBA Interest Rate Decision.
- USD/CAD Continuation Pattern Remains in Focus Going Into BoC Policy Meeting.
- USDOLLAR Breaks Resistance- Topside Targets Remain on Radar Despite Mixed U.S. Data.
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AUD/USD
Chart - Created Using FXCM Marketscope 2.0
- Despite the rate cut from the People’s Bank of China (PBoC), AUD/USD struggles to hold its ground ahead of the Reserve Bank of Australia (RBA) meeting amid bets for another rate cut.
- According to a Bloomberg News survey, 18 of the 29 economists polled forecast a 25bp rate cut, while overnight index swaps (OIS) show market participants are pricing a 59% chance for a further reduction .
- Seeing increased volatility in the DailyFX Speculative Sentiment Index (SSI) as retail crowd turns net-long AUD/USD coming into March, with the ratio currently holding at +1.04.
USD/CAD
- USD/CAD may face a larger rebound going into the Bank of Canada’s (BoC) March 4 policy meeting as the pair preserves the continuation pattern & retains the near-term bearish RSI momentum; need a break of the triangle/wedge formation to favor fresh 2015 highs.
- In light of recent comments from BoC Governor Stephen Poloz, the forward-guidance for monetary policy looks poised to heavily impact the Canadian dollar as it seems as though the central bank will keep the benchmark interest rate at 0.75% .
- Waiting for a break/close above 1.2630 (23.6% expansion) or below 1.2345 (38.2% retracement) to dictate the near-term bias.
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Read More:
Price & Time: GBP/USD Mixed Signals
Australian Dollar Spec Short Position is Largest Since January 2014
USDOLLAR(Ticker: USDollar):
|
Index |
Last |
High |
Low |
Daily Change (%) |
Daily Range (% of ATR) |
|
DJ-FXCM Dollar Index |
11855.42 |
11857.55 |
11826.05 |
0.26 |
58.92% |
Chart - Created Using FXCM Marketscope 2.0
- Despite the slew of mixed data, outlook for Dow Jones-FXCM U.S. Dollar as it breaks above near-term resistance around 11,826 (61.8% expansion), while the RSI breakout continues to take shape.
- May see waning expectations for a strong Non-Farm Payrolls (NFP) report as the ISM Manufacturing employment component continues to expand at a slower pace.
- Will continue to favor the approach to ‘buy dips’ in the USDOLLAR especially on a close above 11,826, with the next region of interest coming in around 11,901 (78.6% expansion).
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|
Release |
GMT |
Expected |
Actual |
|
Personal Income (JAN) |
13:30 |
0.4% |
0.3% |
|
Personal Spending (JAN) |
13:30 |
-0.1% |
-0.2% |
|
Personal Consumption Expenditure Deflator (MoM) (JAN) |
13:30 |
-0.5% |
-0.5% |
|
Personal Consumption Expenditure Deflator (YoY) (JAN) |
13:30 |
0.2% |
0.2% |
|
Personal Consumption Expenditure Core (MoM) (JAN) |
13:30 |
0.1% |
0.1% |
|
Personal Consumption Expenditure Core (MoM) (JAN) |
13:30 |
1.3% |
1.3% |
|
Markit Purchasing Manager Index Manufacturing (FEB F) |
14:45 |
54.3 |
52.9 |
|
ISM Manufacturing (FEB) |
15:00 |
53.0 |
52.9 |
|
ISM Prices Paid (FEB) |
15:00 |
37.5 |
35.0 |
|
Construction Spending (MoM) (JAN) |
15:00 |
0.3% |
-1.1% |
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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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