Good day forex traders.
How was your week? Hope you ended with a profit. If you did not, aim to make the upcoming week a profitable one! Prepare and plan for it. Having a trading plan is important.
In the previous AUD/USD forecast we noted that the currency pair dipped to the bottom of the bearish channel. Risk aversion dampened riskier assets such as the Australian Dollar which is intertwined with the Chinese economy due to the huge trading relationship between both countries.
Looking at the AUD/USD weekly chart above we noted that the currency pair was bullish. It has bounced off the support region of 0.7 and the lower bollinger band. Should this continue, we are looking at a possible bullish target of 0.72.
The bearish channel started since early 2018 is still valid. Any intention to long this currency pair should be done with a proper trading plan and proper money management.
In the past week, equities and bonds world wide faced significant challenges. Equities were especially depressed. China is not an exception and its dropping car sales is not helping.
I mentioned often that China being a huge trading partner of Australia, will inevitably assert an effect on the Australian economy. With the uncertainty surrounding the global markets on the trade war between the US and China, sentiment is affected. While the standoff between the US president and the US Federal Reserve dampened the demand for US dollar, the current increase in value of the Australian Dollar may not be sustainable in the weeks to come. The underlying influence remains and that is China.
The upcoming Australian by election is likely to result in apprehension and hence we may see increased volatility.
In the upcoming week, we have important data such as the US retail sales and Australian employment change. As always do proper money management.