AUDUSD & AUDJPY PRICE ACTION SLUMPS DESPITE TRADE WAR RECOVERY
The Australian Greenback continues to battle even regardless of the current de-escalation within the US-China commerce conflict. Whereas Thursday’s drop in spot AUDUSD could be largely defined by widespread energy within the US Greenback, numerous sentiment measures level to continued bleak Australian Greenback worth outlook. As such, we preserve our view that spot AUDUSD worth motion appears ripe for a significant technical break.
AUDUSD PRICE CHART: DAILY TIME FRAME (JUNE 16, 2019 TO AUGUST 29, 2019)
Wanting past charts and the US-China Commerce Conflict, Australian Greenback forex merchants are seemingly focusing consideration on the upcoming RBA assembly which could additionally justify why the current route of AUDUSD and AUDJPY appears timid. In line with in a single day swaps, charge merchants are presently pricing a 10% likelihood that the RBA cuts charges subsequent week. Nevertheless, the potential for dovish outlook and foreshadowed financial coverage lodging stays a menace to bullish Australian Greenback prospects. Within the meantime, AUDUSD might very effectively proceed to hunch as long as spot costs stay under its 50-SMA proven under on the Four-hour chart.
AUDUSD PRICE CHART: Four-HOUR TIME FRAME (JULY 31, 2019 TO AUGUST 29, 2019)
The dearth of enthusiasm behind the forex pair’s staged comeback can also be depicted by the sequence of decrease highs all through the month. As such, technical confluence across the 38.2% Fibonacci retracement degree of spot AUDUSD’s July 30 excessive stands to function a frightening impediment to upside development. However, spot AUDUSD might be saved afloat across the zero.6730 worth degree with the forex pair doubtlessly trying to the 23.6% Fib in addition to the short-term uptrend line trying to develop for assist.
AUDJPY PRICE CHART: DAILY TIME FRAME (APRIL 09, 2019 TO AUGUST 29, 2019)
With market volatility subsiding and threat urge for food recovering once more because the US-China commerce conflict reportedly de-escalates, sentiment-geared AUDJPY has tried to rebound off its lowest degree in roughly a decade. Though, final week’s sharp selloff in threat property just like the S&P 500 Index amid tit-for-tat tariff threats has largely been reversed but Australian Greenback worth motion seems to be missing the identical inflow of bullish conviction. Apart from the potential of a looming RBA rate of interest lower which can be hinted at subsequent Tuesday, one other potential motive for the shortage of a comeback in spot AUDJPY might be that forex merchants doubt the supposed enchancment within the US-China commerce conflict – or concern that stress will quickly return.
— Written by Wealthy Dvorak, Junior Analyst for DailyFX.com
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