The buck looks weaker today as Regional Bank of Australia governor, Philip Lowe is set to speak later today. The discussion will likely cover interest rates and economic outlook going forward, and traders will try to decipher clues on future policy. Here are our forecasts and our top setups on the buck.
Investors seem to be mostly bearish on the buck amid the risk-off behavior echoing throughout the global market due to conflicts in Russia-Ukraine. The retail trader is now easing off speculative plays and shifting towards the USD and 'safer' currencies.
The weekly commitments of traders data revealed that big money is growing their positions on long contracts on both gold and the buck. The monetary shift also included a considerable decline in short contracts for both markets. If this trend continues, we could start to see a more valuable buck over time.
The pair ended up retreating back under the 200-day and hovering just above the rising trend line on the 1D. The rising trend line looks like AU's strongest support right now, so a long position there would be something worth considering if price comes back down to that level. And depending on market conditions (gold loses value, RBA keeps rates the same), that support level could serve as a potential short setup on a break underneath.
This pair is showing some key indicators for a directional shift. One is the double top at 1.07957, and the other indicator is the lower low on today's candle paired with the dip under the 50 DMA. A close underneath the previous low would help solidify bearish sentiment on this pair. However, the 1D chart still has strong support at 1.06126 which would be a difficult level to break under.
AJ actually looks relatively strong here after retracing from a long term resistance level from the 1D timeframe. Although price retraced from resistance, it seems like the pair will try to make another test at the triple top, in which case will make a break above resistance more likely. Price is currently on support so it will be interesting to see where price will end up after today's session. If gold continues to outperform, so will AUD, probably.
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