AUD/USD: consolidating onthe 0.76 handle post dovish FOMC minutes
- AUD/USD daily sticks bullish, monthly bearish, consolidation likely.
- AUD/USD rallies on soft greenback and dovish minutes.
AUD/USD opened in NY around the 0.7560 level with a bullish bias while the greenback stayed on the backfoot post-Yellen's comments yesterday and on a number of factors that made for a boost in the commodity bloc.
Meanwhile, the DXY has stabilised since the overnight sessions where it had been drifting lower from 93.94 to 93.74 in London and then from 93.90 tops for the NY shift early. At the same time, US rates were moving to the downside while US data disappointed with a big miss in US Durable Goods data. Additionally, the University of Michigan survey complimented Yellen’s remarks, confirming that the inflation outlook remained soft and was reinforcing the gradual outlook for Fed policy. There are no data for Australia today and a phase of consolidation is likely with illiquid markets during the Thanksgiving holidays with the price on the 0.76 handle into the Tokyo open.
- Asian FX Outlook: USD unloved as doubts emerge on Fed's Dec rate hike
From a technical point of view, Valeria Bednarik, chief analyst at FXStreet explained that according to the 4 hours chart, the pair presents a neutral-to-bullish stance, as technical indicators hold above their mid-lines, although lacking directional strength, while the pair managed to hold above its 20 SMA, now aiming to regain the upside. "Still, there's a long way ahead before the pair can turn actually bullish, as it would need to settle at least beyond 0.7660 to begin looking more upward constructive," Valeria noted. Other analyses shows that the daily sticks are bullish with the bull engulfing picture and RSI is biased up. However, monthly readings remain bearish.