Good day forex traders and readers.
Welcome to our weekly forecast and I hope everyone had a great time trading this cross. Do remember that forex success is all about being slow and steady!
In the previous AUD/USD forecast we noted that the currency pair was bearish for the week. It managed to extend beyond 0.76 and was at 0.7510. From a technical point of view, that was a bearish indication. The currency pair was at a 6 years low.
Looking at the AUD/USD weekly chart above we note that the currency pair was bearish for the week. The forecasted bearish indication was spot on and I had a number of readers writing in of their successes. 🙂 The AUD/USD is now below 0.75.
I had zoomed out in the above chart as I want to illustrate the upcoming areas of support and resistance should the bearish momentum continue. An extended bearish target is likely to be 0.72.
Bullish correction will possibly target 0.75 followed by 0.76.
As the Greek crisis continues to unfold, risk aversion sweeps across the markets and a flight to safe haven assets like the U.S. Dollar is observed.
Further more as the China equities market deflate, downwards pressure is likely to be present since China is Australia’s largest trading partner.
With the continued depressed commodities pricing, the strain on commodity currencies like the Australian dollar remains. China’s slowdown and the reduce in demand for materials like iron ore will probably contribute to the strain too.
As the Reserve Bank of Australia eases its policy, the anticipation of the US Federal Reserve interest rate hike is likely to move demand towards the U.S. Dollar.
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