The AUD/USD is rallying
on the risk appetite that remains intact, “hope-ium”, and strength ahead of
next week’s Fed meeting, and the upcoming G20 meeting. There is a solid
argument for expectations of Fed stimulus, especially since the market is in “bad
economic news is good if we want stimulus” mode. Does that mean the market will
get what it wants? No. But it does mean watch out if it doesn’t. Greek
elections aside, the market is looking for central bank action.
Central banks around the globe will be
on “stand by” mode to be ready with liquidity if the Greek elections create
turmoil.
The risk on move is not a convincing
one when you look at the U.S. Dollar Index resiliency. Even though it has
slipped below 82.00 and the 61.8% Fibonacci Retracement from the May 21 to June
1 rally, prices still remain above the 34 period EMA close (the middle line of
the 34EMA Wave) on the daily chart and above the 81.50 major psychological
level.
None-the-less, and despite the recent
optimism in the market, the Dow’s weakness today has allowed the U.S. Dollar
Index to remain above 82.00. It’s Important to remember that even as the Dow
Jones has transitioned out of the downtrend, the U.S. dollar has been able to
hang onto its uptrend as the daily is bouncing from a “twelve to two o’clock”
Wave angle.
Past performance is not indicative of
future results
The
U.S. Dollar Index has been able to hold onto a dominant bullish Directional
Bias despite the transition out of the downtrend in the Dow Jones Industrial
Average. The blue GRaB candles on this chart do show that the dollar is in a neutral
stance in the near-term and this does open up the possibility of a transition
into a sideways chop is the Dow is able to continue to move higher as its
benefits from the continued expectation of Fed stimulus.
What the AUD/USD needed for momentum
north of parity was a stronger Dow and weaker dollar but I hesitate to call
today’s move a healthy sign of risk being on the table. Without commodities
participation from namely crude oil, it’s a hollow move.
Past performance is not indicative of
future results
The
daily AUD/USD has broken parity and the near-term RISK ON rally which would
better be called a “Fed Stimulus expectation” rally is still enough to pressure
the U.S. dollar and allow the aussie to climb higher. Technically, the break of
parity seems to be garnering enough momentum to have successfully pierced the
50DMA. But the daily AUD/USD is in transition, not an uptrend.
As an
active forex trader and Chief Currency Analyst for InterbankFX.com I do write
for a number of sites all over the web and I am happy to say that I will be
posting updates atwww.IBFXconnect.com. MyActivity Boardwill feature the trades from my trading account as well as
intraday commentary.
Start the discussion! Questions?
Comments. Leave it here at the Daily Forex Trading Edge for Raghee to
personally answer. Using the icons at the top of the article to forward this
update to a friend via email, post it on Google or Facebook or simply print it
out for reading later.
Forex trading is one of
the riskiest forms of investment available in the financial markets and
suitable for sophisticated individuals and institutions. The possibility exists
that you could sustain a substantial loss of funds and therefore you should not
invest money that you cannot afford to lose.
Posted By:
Raghee Horner
Raghee Horner, chief currency analyst for IBFX, provides her personal daily trading tips and insights through Dailyforextradingedge.com. An experienced trader with over fifteen years in the markets, Raghee is the co-founder of EZ2Trade Software and has taught her brand of technical analysis and charting strategies to students all over the world. She is an international author and has taught currencies, futures, and equities trading for over a decade.
The AUD/USD is rallying on the risk appetite that remains intact, “hope-ium”, and strength ahead of next week’s Fed meeting, and the upcoming G20 meeting. There is a solid argument for expectations of Fed stimulus, especially since the market is in “bad economic news is good if we want stimulus” mode. Does that mean the market will get what it wants? No. But it does mean watch out if it doesn’t. Greek elections aside, the market is looking for central bank action.
Central banks around the globe will be on “stand by” mode to be ready with liquidity if the Greek elections create turmoil.
The risk on move is not a convincing one when you look at the U.S. Dollar Index resiliency. Even though it has slipped below 82.00 and the 61.8% Fibonacci Retracement from the May 21 to June 1 rally, prices still remain above the 34 period EMA close (the middle line of the 34EMA Wave) on the daily chart and above the 81.50 major psychological level.
None-the-less, and despite the recent optimism in the market, the Dow’s weakness today has allowed the U.S. Dollar Index to remain above 82.00. It’s Important to remember that even as the Dow Jones has transitioned out of the downtrend, the U.S. dollar has been able to hang onto its uptrend as the daily is bouncing from a “twelve to two o’clock” Wave angle.
Past performance is not indicative of future results
The U.S. Dollar Index has been able to hold onto a dominant bullish Directional Bias despite the transition out of the downtrend in the Dow Jones Industrial Average. The blue GRaB candles on this chart do show that the dollar is in a neutral stance in the near-term and this does open up the possibility of a transition into a sideways chop is the Dow is able to continue to move higher as its benefits from the continued expectation of Fed stimulus.
What the AUD/USD needed for momentum north of parity was a stronger Dow and weaker dollar but I hesitate to call today’s move a healthy sign of risk being on the table. Without commodities participation from namely crude oil, it’s a hollow move.
Past performance is not indicative of future results
The daily AUD/USD has broken parity and the near-term RISK ON rally which would better be called a “Fed Stimulus expectation” rally is still enough to pressure the U.S. dollar and allow the aussie to climb higher. Technically, the break of parity seems to be garnering enough momentum to have successfully pierced the 50DMA. But the daily AUD/USD is in transition, not an uptrend.
As an active forex trader and Chief Currency Analyst for InterbankFX.com I do write for a number of sites all over the web and I am happy to say that I will be posting updates at www.IBFXconnect.com. My Activity Board will feature the trades from my trading account as well as intraday commentary.
Start the discussion! Questions? Comments. Leave it here at the Daily Forex Trading Edge for Raghee to personally answer. Using the icons at the top of the article to forward this update to a friend via email, post it on Google or Facebook or simply print it out for reading later.
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
Raghee Horner