AUD/USD attempts to negate one-week losses

Source: Dukascopy Bank SA
© Dukascopy Bank SA
"Given the recent USD strength, and that a Fed rate hike is fully priced, we see risks the USD gently eases after the FOMC meeting. But the rally in AUD is limited by the recent declines in iron ore prices. In addition, we think market pricing for a RBA rate hike early in 2018 is overdone." 
- CBA (based on The Business Times) 


Pair's Outlook 
Disappointment in US earnings data on Friday allowed the Aussie to begin its recovery. Although Friday's gains were limited by the monthly S1 at 0.7558, this threshold is likely to give in today, opening the door for another attempt to reclaim the 0.77 mark by the end of the week. However, the 0.76 mark is the first target, as it kept the AUD/USD pair at bay through all of the previous week. Meanwhile, daily technical indicators are unable to confirm another positive outcome is due, but the weekly ones remain somewhat supportive. Nevertheless, the base case scenario today is a close around 0.7580. 

Traders' Sentiment
Today 67% of all open positions are long (previously 64%), but the number of pending orders remains unchanged—63% are still to sell the Australian Dollar.
© Dukascopy Bank SA

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