Dollar majors have continued to ply narrow ranges for the most part. EURUSD side-lined in the low 1.16s. AUDUSD and USDJPY saw a little more movement. The former lifted in the immediate wake of the RBA policy announcement and statement, with the central bank leaving interest rates unchanged (cash rate at 1.5%) while leaving guidance and forecasts unchanged. AUDUSD ran up by about 20 pips to a 0.7701 high before stalling and turning lower, to sub-0.7670 levels. While Governor Lowe’s statement spoke of inflation picking up “gradually” as the economy strengthens, he also said that exchange rate appreciation since mid year will “contribute to continued subdued price pressures.” USDJPY, meanwhile, lifted out of lows, concomitantly with gains in most equity markets in Asia. Remarks from U.S. Treasury Secretary Mnuchin that he is expecting huge dollar repatriations helped give the dollar a lift.
In my yesterday’s post, i wrote: ” On Aussie rally against US dollar today, AUDUSD reach 0.7665. However, this day rally seems to run out of steam on US Market open. …Therefore a Short position was taken, with entry at 0.7658. Target 1 was set at 0.7635 in a hourly time frame. Support at 0.7686…. A Daily target was also set at 0.7605 since this weakness complies with higher time-frames such as 4-hour and Daily ones. Support was set at 0.7700. ” Short-term position hit Stop loss for a loss of 28 pips, while I am still holding Daily position, for which Support is moved at 0.7730.
Nevertheless, in the 4-hour chart, on today’s AUDUSD performance, the pair turned lower, forming a head and shoulders formation which is not fully confirmed yet. It this formation is completed then this suggest further bearish signal for the pair.
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