Talking Points:
- AUD/USD Holds Monthly Low Ahead of RBA Interest Rate Decision.
- Gold Fails to Retain Bullish RSI Momentum- Former Support in Focus.
- USDOLLAR Topside Targets Still Favored Despite Weaker-Than-Expected 4Q GDP.
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AUD/USD
Chart - Created Using FXCM Marketscope 2.0
- Looks as though AUD/USD will hold the January low (0.7718) ahead of the Reserve Bank of Australia (RBA) February 2 meeting, but remains at risk for a further decline as the Relative Strength Index (RSI) holds in oversold territory.
- RBA is largely anticipated to keep the benchmark interest rate on hold at 2.50%, but seeing speculation for a rate cut amid the global easing cycle.
- DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long AUD/USD, but seeing the ratio narrow going into February as it currently stands at +1.51.
XAU/USD
- Gold remains vulnerable to a further decline after failing to close above $1301 (50% retracement); near-term top in place?
- As the RSI fails to preserve the bullish momentum carried over from back in November, the precious metal looks vulnerable to a further decline especially if it fails to close above 1.270 (50% expansion) going into February.
- Break/close below $1250 should expose the former resistance zones around $1227 (23.69% expansion) to $1231 (78.6% retracement).
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Read More:
GBPNZD - Symmetry In Motion
USD/CAD Overloved?
USDOLLAR(Ticker: USDollar):
Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
DJ-FXCM Dollar Index | 11846.12 | 11860.61 | 11824.5 | -0.06 | 54.05% |
Chart - Created Using FXCM Marketscope 2.0
- String of higher-lows in Dow Jones-FXCM U.S. Dollar continues to foster a bullish outlook for February even as the advance 4Q Gross Domestic Product (GDP) report falls short of market expectations.
- Nevertheless, seeing greater willingness from Fed officials to raise the benchmark interest rate in mid-2015 as St. Louis Fed President James Bullard favors normalize monetary policy sooner rather than later.
- As the RSI holds in overbought territory, topside targets remain favored with the next level of interest at 11,901 (78.6% expansion).
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Release | GMT | Expected | Actual |
Gross Domestic Product (Annualized) (QoQ) (4Q A) | 13:30 | 3.0% | 2.6% |
Personal Consumption (4Q A) | 13:30 | 4.0% | 4.3% |
GDP Price Index (4Q A) | 13:30 | 0.9% | 0.0% |
Core Personal Consumption Expenditure (4Q A) | 13:30 | 1.1% | 1.1% |
ISM Milwaukee (JAN) | 14:00 | 58.00 | 51.60 |
Chicago Purchasing Manager (JAN) | 14:45 | 57.5 | 59.4 |
U. of Michigan Confidence (JAN F) | 15:00 | 98.2 | 98.1 |
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--- Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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