SYDNEY, AUSTRALIA: Reserve Bank of Australia building name on black stone wall in the center of Sydney NSW Australia. Image source: Eyeofpaul © 123RF.com
The rampant spread of the Delta variant worldwide is causing new disruptions to global economic activity, which is leading to renewed investors' interest in more easily convertible currencies. This is good news for U.S. dollar bulls. Check out our comprehensive EURUSD analysis to learn about the greenback's path to recovery.
At its meeting earlier today, the Governing Council of the RBA expectedly decided to maintain the near-negative Cash Rate unchanged at 0.10 per cent. The Delta variant fallout on Australia's economic activity prompted the Council to dial back its growth expectations for the third quarter.
Among other things, the fallout is disrupting the global supply chains, which keeps demand high but stymies productivity. RBA's prevailingly dovish rhetoric had an adverse impact on the value of the Aussie.
AUDUSD 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
The AUDUSD was rising until recently in an ascending channel, as shown on the 4H chart above. Yet, the newly revised recovery outlooks of the RBA are likely to cause a temporary correction within the uptrend.
While the broader uptrend continues to be active, as underpinned by the ADX indicator, the bearish crossover on the MACD signals the prevalence of bearish momentum in the short term.
The emergence of a Hanging Man candle from the upper limit of the ascending channel elucidates the likely beginning of the new correction. The price action is likely to drop to either the 23.6 per cent Fibonacci retracement level at 0.73907 or the 38.2 per cent Fibonacci at 0.73364 before bulls can regain control.
Notice that the two Fibonacci thresholds roughly outline the boundaries of the previous consolidation range. This makes the probable dropdown of the price to one of the two limits of this previous support area seem even more likely.
RBA's dialled back growth expectations
Despite the recent growth in consumer prices, which is caused by the aforementioned heightened demand, the RBA had to recalibrate its outlook on the likely path to recovery. This is just as inflation reached 3.8 per cent, the highest level since October 2008.
Australia MoM Inflation Rate. Image source: TradingEconomics.com
"Prior to the Delta outbreak, the Australian economy had considerable momentum. GDP increased by 0.7 per cent in the June quarter and by nearly 10 per cent over the year. […] The recovery in the Australian economy has, however, been interrupted by the Delta outbreak and the associated restrictions on activity. GDP is expected to decline materially in the September quarter [...]. "
That is why the Council decided not to change the scope and pacing of its asset purchase facility. The bank will continue to "purchase government securities at the rate of $4 billion a week and to continue the purchases at this rate until at least mid-February 2022."
Over the past few weeks, the USD has lost nearly 800 pips against the JPY, driven by Japan's shift away from decades of negative interest rates. With the Bank of Japan raising rates for the second time in a row, investors are adjusting their positions to [...]
Despite its volatility, Silver remains in an uptrend. While not as dynamic as Gold, XAG often mirrors XAU’s movements. A Multiple Top has formed around $32.50, and history shows that the more a level is tested, the weaker it becomes, increasing the likelihood of a [...]
A combination of factors, including Trump-era tariffs, the emergence of DeepSeek, and a slowdown in GDP growth, has contributed to the recent pullback in the US30 from its record highs. From a technical standpoint, a Double Top pattern has formed around the [...]
Over the past month, Silver has experienced an impressive 13% surge, marking a strong bullish trend. Despite notable volatility and multiple pullbacks, the overall momentum remains firmly to the upside. This strength is further validated by the Golden Cross, a historically reliable [...]
The Swiss Stock Market has been on a remarkable rally, surging over 15% between December and January. At times, the price action resembled a near-vertical ascent. However, following the announcement of Trump’s tariffs over the weekend, Monday’s trading session opened with a [...]
Between October and January, GBPUSD experienced a significant decline, dropping by approximately 1300 pips. However, we now observe signs of a potential trend reversal. Over the past few weeks, the pair has rebounded by more than 400 pips, shifting momentum toward a [...]
For the past 1 month, the UK100 saw a fantastic 600 point rally! The occasional corrections only attracted more buyers, which is healthy for the current up trend and the RSI currently exhibits elevated demand. A 130 point correction started last week on Friday, dipped below the [...]
Over the past two weeks, Japan’s leading stock index surged 2,000 points, reflecting strong bullish momentum. However, this week saw a sharp sell-off, erasing nearly all gains since mid-January. Despite this drop, the decline stalled at the 61.8% Fibonacci retracement, a key [...]
There is a clear shift in the momentum in the Oil market, with the commodity dropping with nearly 10% for the past 2 weeks. The Death Cross, a classic sell signal, is indicating that sellers are indeed in control and we are lookin now at a strong [...]
The 350 pip rally for the past 2 weeks seems like a trend reversal for EURUSD, with buyers back in control. The strong bullish momentum is also confirmed by the Golden Cross, a historic buy signal. Corrections are healthy for the trend and we currently looking at [...]
For the past 2 weeks GBPUSD went up with 400 pips and this is why we believe we might be looking at a trend reversal. The strong bullish momentum is confirmed by the Golden Cross, a classic buy signal, which supports the hypothesis that [...]
The Death Cross formation in USDJPY signals a robust downward momentum, with the USD depreciating by 300 pips over recent weeks. Further declines exceeding 300 pips are anticipated, potentially reaching the 152.00 level. Despite several corrective pullbacks, the price has been unable to surpass the [...]
Following the formation of a Double Top pattern at the 21,930 level last Friday, the NASDAQ has experienced a significant decline, plummeting by nearly 800 points. This downturn has been primarily driven by unfavorable manufacturing data emerging from China, alongside the Bank of Japan's interest rate hike on Friday. The market reaction closely resembles the [...]
GOLD's uptrend has regained strength, with several factors supporting further gains. The RSI bounced from oversold levels and now stands at 65, signaling growing demand and increasing buying volume. Additionally, the appearance of a [...]
For the past few months, USDJPY gained 2100 pips! Then, about 10 days ago the USD started dropping and so far corrected with 300 pips, dropping down to 155.00. A local Double Bottom got formed and this level also aligns with the important [...]
For the past week, the US100 has surged by over 1,000 points, signaling strong bullish momentum. The RSI stands at 69, indicating high demand and buyer dominance. A bullish Golden Cross pattern has emerged, confirming the upward trend. Despite a brief correction yesterday, with the index dipping to [...]
The Descending Triangle on the 4-hour chart, typically a bearish signal, failed to materialize this time. Instead, the Triple Bottom support at 92,000 held strong, driving significant buying volume. A Golden Cross—a classic bullish indicator—confirms strong [...]
After a 300-point correction from its December highs, the SP500 appears to be rebounding as bulls regain control. This recovery is supported by positive economic data, including strong NFP numbers, low unemployment, and CPI readings meeting expectations—all favorable for stocks. Additionally, the earnings season began yesterday with [...]
For several months, the EUR has been trending downward, losing hundreds of pips. While occasional corrections to the upside occur, bears remain in control. The strong downward momentum is highlighted by the Death Cross pattern, a classic sell signal. Yesterday, we observed another [...]
The Dollar remains strong, with buyers firmly in control since the Fed's December comments hinting at fewer 2025 rate cuts. This drove a 400-pip rally in USDCAD, now facing resistance near 1.4450 as early buyers take profit. Corrections are part of healthy trends, and the pair is testing support at [...]
