Good day forex traders and readers.
It’s the weekend and I hope you are having a great time. If you had made money from forex during the week, a well done for you!
In the previous AUD/USD forecast we note the strong bearish momentum and advised some caution due to the immediate support and resistance region. The Australian equities continue to fare poorly giving an indication of weakness.
Looking at the AUD/USD daily chart above we note that the currency pair continued on its bearish momentum, making lower lows daily. Having said so we do note that the AUD/USD pulled back, closing the week just above 0.9500.
As of now, the momentum of the currency pair remains bearish. Should the current support of 0.95 fails, an extended bearish target may be 0.9380. Any bullish correction may see 0.9610 tested.
The ASX 200 is red for the weak and this continues to suggest that the sentiment towards the Australian economy remains dovish. There are speculations of further interest rate cut as a measure by the Reserve Bank of Australia to stimulate the economy. As the appeal of the Australian Dollar drops as a carry trade candidate, we will probably continue to see more outflows.
In the meanwhile, Australia’s largest trading partner China continues to display unspectacular economic figures thus adding to the apprehension.
Next week brings the Australian unemployment rate. This is a crucial statistic to monitor as a worst than expected outcome may further dampen sentiment.