AUD/USD Threatens Bearish RSI Momentum Ahead of RBA

Talking Points:
– AUD/USD Breaks Out, Threatens Bearish Momentum Ahead of RBA March Meeting.
– USD/CAD Holds Monthly Opening Range as BoC Governor Poloz Talks Down Rate-Cut Bets.
– USDOLLAR Risks Larger Correction as Fed Chair Janet Yellen Remains in No Rush to Normalize.

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AUD/USD

Chart – Created Using FXCM Marketscope 2.0
AUD/USD breaking out following the positive data prints out of Asia-Pacific; will keep a close eye on former support around 0.8020 (38.2% expansion) to 0.8030 (61.8% retracement) as the Relative Strength Index (RSI) threatens the long-dating bearish momentum.
Despite the surprise rate cut, seeing narrowing expectations for another move at the Reserve Bank of Australia’s (RBA) March 3 meeting as Governor Glenn Stevens adopts a more neutral tone.
Nevertheless, DailyFX Speculative Sentiment Index (SSI) shows retail crowd turned net-short AUD/USD yesterday, with the ratio currently holding at -1.44.

USD/CAD

USD/CAD may continue to consolidate and retail the opening monthly range as Bank of Canada (BoC) Governor Stephen Poloz argues that the surprise rate cut was an ‘insurance’ move; looks as though the central bank will retain its current policy at the March 4 meeting.
With that said, may need a larger fundamental catalyst to spur a break of the February range; keeping a close eye on the RSI as it retains the bearish momentum from earlier this month.
Long-term outlook remains bullish amid the policy divergence, but need a close above 1.2630 (23.6% expansion) to favor another run at 1.2800 (38.2% expansion).

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Read More:
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GBPNZD Responds to Key Support- Scalps Target Resistance at 2.0550

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

11756.16

11779.21

11740.32

-0.20

68.87%

Chart – Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar remains under pressure as Fed Chair Janet Yellen appears to be in no rush to normalize monetary policy; close below 11,774 (50% expansion) to favor downside targets as the bearish RSI momentum continues to take shape.
U.S. Consumer Price Index (CPI) may also dampen interest rate expectations as the headline reading is expected to show the first annualized contraction since July 2009..
Downside region of interest comes in around 11,721 (38.2%), which also lines up with channel support and the 50-Day SMA (11,705).

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Release

GMT

Expected

Actual

MBA Mortgage Applications (FEB 20)