Good day forex traders.
Welcome to our weekly review of the koala AUD/USD!
How long have you been trading this currency pair? We have been following for 10 years now and still it surprises us every now and then. This is why we always advocate proper money management. You never know what will happen.
In the previous AUD/USD weekly review, we noted that the currency pair breached the middle bollinger band. The AUD/USD would need to establish itself clearly above the middle bollinger band before the possibility of a bullish target at 0.74.
Looking at the AUD/USD weekly chart above we noted that the currency pair was bearish for the week. Bullish ground could not be held on and it headed straight for 0.72. It is now testing the resistance turned support.
Considering that the middle bollinger band lies in the current region, it is important to drop to lower timeframes in the upcoming week to observe the price action.
US China Woes
The word is out that investors are apprehensive of the upcoming talks between the US and China officials at the G20 meeting towards the end of the month. This translates to a weaker Aussie dollar as being a crucial trading partner of Australia, China matters are often reflected upon the currency’s value. The fear is of a detrimental impact on China’s economy and thus affecting trade activities downstream. For example if China economic activities slow down, it’s demand for Australian goods will likewise decrease too.
Oil targets the gutter
Australia’s economy is hugely commodities driven. Hence the price of oil usually exerts a significant influence on the Australian economy and by extension the Australian dollar. Oil prices are on a downslide. Brent oil is now below $60 usd and there is no clear indication that the price has hit a bottom. This situation will likely continue to exert downside pressure on the AUD/USD.
The upcoming week is loaded with economic events and releases. Starting early week would be a speech from RBA Governor Lowe on cashless payment. The audience may post questions on the economy which in turn may trigger unexpected developments. The US Federal Open Market Committee meeting minutes is due to be released too and any unexpected insights may trigger reactions too. ( for example an extremely dovish stance instead of the current moderated approach ) Gentle reminder on the G20 meeting towards the end of the week. US and China officials are expected to talk and we may get developments on the trade war / deal.
Members can check into their dashboard to see if there are any comments from the team as the week unfolds.