OctaFX | OctaFX Forex Broker
Open trading account
Back

AUD/USD: Bearish engulfing day, downside risks building up

FXStreet (Bali) - The AUD/USD sell-off initiated post FOMC has accelerated once again around the Tokyo open, sending the Aussie to a new low circa $0.8760 as the market re-prices higher chances of an early tightening cycle by the Fed.

In recent weeks, the Aussie market had entered a phase of consolidation, with non-commercial accounts paring back some of its huge USD long positions amid a less favourable landscape for early rate hikes by the Fed, with projections pushed further ahead towards Q3 2015. However, Wed's statement, which saw a Fed downplaying disinflationary concerns while noting that "underutilization of labor resources gradually diminishing", has again shifted the focus for early tighter polices (H1 2015), and as a consequence, risks are building up for a resumption of the USD bull trend.

Valeria Bednarik, Chief Analyst at FXStreet, notes: "The pair maintains the bearish bias in the short term: the 1 hour chart shows price accelerated strongly down also below its 20 SMA while indicators head lower deep in the red. In the 4 hours chart price stands below a still bullish 20 SMA, while indicators lost the latest bullish strength but remain in positive territory: a break through 0.8770 will likely see the pair down to 0.8730 in the short term, while sellers will likely surge on approaches to 0.8820 resistance."

USD/JPY: Bulls firmly in control post FOMC

USD/JPY continues to build up on recent gains, with Wednesday's FOMC-motivated spike reaching its highest at 109.00, where a smattering of selling orders has now caused the pair to retreat some 20 odds pips towards 108.80 ahead of the Tokyo open.
Read more Previous

Australia HIA New Home Sales (MoM) fell from previous 3.3% to 0% in September

Read more Next
Start livechat