AUD/USD: bears taking control below key resistance, headed to 0.7800?

Ross J Burland FXStreet

AUD/USD downside looks constructive.
Tracking stocks, rates and the DXY ahead of the FOMC minutes.

AUD/USD picking up some offers here as we await the FOMC minutes and the DXY gains some traction, currently higher to +0.22% at 89.91 from a low of 89.70 in the day's range to 89.99 the high. Currently, AUD/USD is trading at 0.7916, up 0.08% on the day, having posted a daily high at 0.7922 and low at 0.7905.

AUD/USD has been on the backfoot since the recent highs of 0.7988 and with a break of the 0.7860 support, (now resistance), the case is constructive on the downside towards the 0.7800 level.

The Aussie wages data yesterday made for a spike to the 0.79 handle by 20 pips but the dollar's momentum took the glory away from the bulls in Asia and the downside was re-established on a break below 0.7880.

The US session so far ahead of the FOMC minutes

For today, eyes are on the FOMC minutes, Fed speakers, stock and yields. So far, the benchmarks got off to a good start, rallying from the off with the S&P rallying through the hourly MA's and the DJIA headed towards the 100 SMA in the same time frame. However, as the US 10-yrs were playing catch up, stocks stalled, AUD was lower and the DXY was back on track towards 90 again.

There had been some data releases from the US in Markit manufacturing PMI for Feb (Prelim) coming in better at 55.9 vs. the 55.5 expected. The employment index for US manufacturing was also improved at 55.8 versus 54.8 last month. Then, the existing home sales for January 5.38M vs. 5.60m expected.

We also heard from Fed's Kaplan who said that the Fed should raise rates gradually and patiently this year. Fed's Kashkari says they are not targeting FX to move the USD up or down and that higher market rates show optimism, adding that there is still some slack left in US labour market and that tax cuts could help Fed achieve 2% inflation target.

FOMC Minutes Preview: More hawkishness or the beginning of a Powell Put?

AUD/USD levels

Noting that AUD/USD has sold off following last weeks failure at the 61.8% retracement at 0.7991, analysts at Commerzbank explained that the pair is trading around the 55-day ma which guards the 200-day ma at 0.7775. "Only a move below 0.7743 (61.8% retracement) will target 0.7637/78.6% retracement and the 0.7568 2016-2018 uptrends," the analysts added.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.