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AUD/USD rallied on Tuesday like all other majors, following cautious remarks from Janet Yellen in a speech at Economic Club of New York. She reiterated her past views that it is suitable for the Fed to “proceed cautiously” in raising interest rates under the current uncertain global economic environment. She even argued further .

yellen-speech-could-offer-rate-clues

“Especially warranted because, with the federal funds rate so low, the FOMC’s ability to use conventional monetary policy to respond to economic disturbances is asymmetric.”

“The potential fallout from recent global economic and financial developments, which have been marked by bouts of turbulence since the turn of the year”.

She noted further declines in oil could have “adverse” effects on the global economy. Yellen’s cautious approach was in contrast to the last week’s hawkish messages from a chorus of Fed speakers.

Upcoming News

  1. HIA New Home Sales: Thursday, 00:00.
  2. Private Sector Credit: Thursday, 00:30.
  3. AIG Manufacturing Index: Thursday, 22:30.
  4. Chinese Manufacturing PMI: Friday, 1:00.
  5. Caixin Manufacturing PMI: Friday, 1:45.
  6. Commodity Prices: Friday, 5:30.

AUD/USD Chart Analysis

AUD/USD main trend still remains down though momentum shifted to an extent after Tuesday’s rally.

Short-term range is .7680 to .7480. Its 50% or pivot level is .7580. This level will determine the near-term direction of the market.If the market takes out .7680 with conviction,it may further rise  upto the July 1, 2015 main top at .7750.

If the downside momentum continues then look for the break to extend into the pivot at .7580.It is one of the best support level going down. Shorts should close the positions if this is breached on closing basis.

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