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AUD/USD Vulnerable to Slowing China GDP- 0.7570 Support in Focus

David Song

DailyFX.com -

Talking Points:

- USD/JPY Continues to Carve Higher-Lows Despite Hamada Comments.

- AUD/USD Holds Key Support Ahead of China 1Q GDP Report.

- USDOLLAR Risks Further Losses as Bearish RSI Divergence Takes Shape.

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USD/JPY

USD/JPY Daily Chart
USD/JPY Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Even though Koichi Hamada, an adviser to Prime Minister Shinzo Abe,argues that ‘selling of the yen is coming closer to its limit,’ may continue to see range-bound prices in USD/JPY as it retains the monthly-opening range.

  • Beyond the bearish momentum in the Relative Strength Index (RSI), the Bank of Japan’s (BoJ) April 30 meeting may further undermine the bullish outlook for USD/JPY should Governor Haruhiko Kuroda continue to endorse a neutral tone for monetary policy.

  • DailyFX Speculative Sentiment Index (SSI) shows the retail FX crowd remains net-long USD/JPY, but seeing narrowing participation as open interest slips 0.2% from the previous day, with the ratio climbing to +2.50 amid a 13.2% decline in short positions.

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AUD/USD

NZD/USD Daily Chart
NZD/USD Daily Chart

  • Ongoing closes above 0.7570 (50% expansion) to 0.7590 (100% expansion) may encourage a larger rebound in AUD/USD especially as the bullish RSI momentum gathers pace.

  • However, as China – Australia’s largest trading partner – is expected to grow at a slower pace in 2015, a dismal 1Q Gross Domestic Product (GDP) report may heighten speculation for another rate cut from the Reserve Bank of Australia (RBA) as Governor Glenn Stevens retains a dovish outlook for monetary policy.

  • Need a break/close above former-support zone around 0.7720 (161.8% expansion) to 0.7740 (78.6% expansion) to favor a larger rebound in the aussie-dollar.

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Read More:

Price & Time: USD/JPY Dead Money?

COT-Euro Positioning Little Changed from Record

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

12069.99

12142.96

12051.22

-0.45

124.10%

AUD/USD Vulnerable to Slowing China GDP- 0.7570 Support in Focus
AUD/USD Vulnerable to Slowing China GDP- 0.7570 Support in Focus
USDOLLAR Daily Chart
USDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Dow Jones-FXCM U.S. Dollar risks a larger decline as the bearish RSI momentum takes shape; long-term outlook remains bullish as the upward trending channel from July 2014.

  • In light of the ongoing weakness in private-sector consumption, will continue to watch the slew of central bank rhetoric as 2015 voting-members Jeffrey Lacker, Dennis Lockhart and Stanley Fischer are scheduled to speak this week.

  • Despite the risk for a double-top formation, will continue to watch the string over lower-highs in the USDOLLAR, with interim support coming in around 11,997 (100% expansion) to 12,017 (50% expansion).Join DailyFX on Demand for Real-Time SSI Updates!

Release

GMT

Expected

Actual

Advance Retail Sales (MoM) (MAR)

12:30

1.1%

0.9%

Advance Retail Sales ex Auto (MoM) (MAR)

12:30

0.7%

0.4%

Advance Retail Sales ex Auto & Gas (MoM) (MAR)

12:30

0.6%

0.5%

Advance Retail Sales Control Group (MAR)

12:30

0.5%

0.3%

Producer Price Index (MoM) (MAR)

12:30

0.2%

0.2%

Producer Price Index (YoY (MAR)

12:30

-0.9%

-0.8%

Producer Price Index ex Food & Energy (MoM) (MAR)

12:30

0.1%

0.2%

Producer Price Index ex Food & Energy (YoY) (MAR)

12:30

0.9%

0.9%

Producer Price Index ex Food, Energy, Trade (MoM) (MAR)

12:30

0.1%

0.2%

Producer Price Index ex Food, Energy, Trade (YoY) (MAR)

12:30

0.8%

0.8%

NFIB Small Business Optimism (MAR)

13:00

98.0

95.2

Business Inventories (FEB)

14:00

0.2%

0.3%

Click Here for the DailyFX Calendar

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

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