Good day forex traders and forex koalas!
Welcome to another AUD/USD forecast by yours truly, The Forex Koala. I always mention that the Aussie dollar is a good alternative currency for trading due to the lesser amount of crazy volatility.
In the previous forecast we noted that the currency pair is bearish from a technical point of view and the extended bearish target of 1.02 might be next. There were speculations in the markets regarding a possible interest rate cut by the RBA and hence apprehension was present.
Looking at the AUD/USD daily chart above we noted that the 1.02 target was achieved indeed! I LOVE IT WHEN MY CHARTS WORK.
SMA 20 ( RED ) = Bearish
SMA 50 ( BLUE ) = Flat
The SMAs do not suggest a sustained momentum and indeed the bearish trend was abruptly replaced by a strong bullish correction. 1.033 gave little resistance and only the SMA 50 managed to stop it for now. Continued bullish pressure will need to breach 1.043 first before heading back to the previous high region of 1.0560. Immediate support lies at 1.033.
The Reserve Bank of Australia kept the current interest rate and this brought back some relief to the markets. Furthermore the revealing of a bond buying program by the ECB eased some fears regarding the Euro Zone budget deficit crisis and this provided for a risk taking environment. High yielding assets such as the Aussie dollar saw demand and rose in value.
An area of concern would be the amount of exports versus the imports. ( Trade Balance ) The recent release indicated that it was negative meaning that the imports were more than the exports. It was more negative than the previous month. Being an export driven economy, this may result in upcoming weakness for the Australian economy.