Good day forex traders and readers.
How is your Aussie trading? I hope you are making green pips like a happy koala.
In the previous AUD/USD forecast we noted that the currency pair was bearish for the week. It could not advance beyond the resistance of 0.74 and instead headed towards the extended support of 0.723. There was no obvious indication that a bullish recovery would take place. As we headed towards 0.723, be mindful that a clear breach would take us to a new region of low.
Looking at the AUD/USD daily chart above we note that the currency pair indeed went for an unprecedented low. Many of our readers wrote in to share that they earned a lot. That is good news indeed!
From a technical point of view, the currency pair remains bearish for now. The lower bollinger band is steep and it remains as a lowering point of interaction. The AUD/USD tested 0.69 and has since eased above 0.7. Any downwards pressure will likely test 0.69 again.
Should the bullish recovery gain momentum, we may see 0.7250 as a resistance region again.
As the global market conditions remain mulled, the dampened sentiments continue to affect commodities prices. Australia as a major exporter of commodities continue to be affected by such. With its largest trading partner China facing a slowing economy, many economists are wary of a sustained correction.
A number of analysts are calling for a risk of possible recession for Australia and mentioned that contractions within the Australian economy are already happening.
A scenario to consider would be the U.S. Interest rate hike. This will likely shift demand towards the USD.