Talking Points:
- AUD/USD Holds Monthly Low Ahead of RBA Interest Rate Decision.
- Gold Fails to Retain Bullish RSI Momentum- Former Support in Focus.
- USDOLLAR Topside Targets Still Favored Despite Weaker-Than-Expected 4Q GDP.
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AUD/USD
Chart – Created Using FXCM Marketscope 2.0
Looks as though AUD/USD will hold the January low (0.7718) ahead of the Reserve Bank of Australia (RBA) February 2 meeting, but remains at risk for a further decline as the Relative Strength Index (RSI) holds in oversold territory.
RBA is largely anticipated to keep the benchmark interest rate on hold at 2.50%, but seeing speculation for a rate cut amid the global easing cycle.
DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long AUD/USD, but seeing the ratio narrow going into February as it currently stands at +1.51.
Gold remains vulnerable to a further decline after failing to close above $1301 (50% retracement); near-term top in place?
As the RSI fails to preserve the bullish momentum carried over from back in November, the precious metal looks vulnerable to a further decline especially if it fails to close above 1.270 (50% expansion) going into February.
Break/close below $1250 should expose the former resistance zones around $1227 (23.69% expansion) to $1231 (78.6% retracement).
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USDOLLAR(Ticker: USDollar):
Chart – Created Using FXCM Marketscope 2.0
String of higher-lows in Dow Jones-FXCM U.S. Dollar continues to foster a bullish outlook for February even as the advance 4Q Gross Domestic Product (GDP) report falls short of market expectations.
Nevertheless, seeing greater willingness from Fed officials to raise the benchmark interest rate in mid-2015 as St. Louis Fed President James Bullard favors normalize monetary policy sooner rather than later.
As the RSI holds in overbought territory, topside targets remain favored with the next level of interest at 11,901 (78.6% expansion).
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— Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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AUD/USD Holds Monthly Low Ahead of RBA- Gold Tests Former Support
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