Good day forex traders and koala friends!
It is a bright sunny day for me and i am feeling koala sleepiness. But hey not before i give my input on the koala currency the Aussie Dollar!
In the previous AUD USD forecast we noted on the resistance of 1.0560. Any bullish momentum would need this region to be taken down clean. China is slowing down and hence there is apprehension towards how the Australian economy will react.
Looking at the AUD/USD chart above, we noted that the 1.0560 resistance held and the currency pair eased off. It hit and met with a challenge at the support of 1.0430. I love it when the support and resistance lines that i plot makes sense. Don’t you? 🙂
SMA 20 = Bullish
SMA 50 = Bullish
While both the SMAs are bullish for now, i would advise caution due to the sentimental issues surrounding Australia for now. ( I will touch on it below ) If the 1.0430 support fails, 1.0330 may be next. Any bullish correction will need to tackle 1.0560 again.
The Euro Zone remains weak and China attempts damage control with regards to it’s slowing growth. Chinese officials had been hawkish about measures and indications of the economy. This did not bring the Aussie up however as a major blow was deal by the Australian treasury itself. The treasury mentioned that should the currency’s value be high compared to the current state of the economy, easing momentary policies may be pursued. This is akin to suggesting possible further interest rates cut and this definitely doesn’t strike a chord with the currency investors.
Long time readers will know that i always mentioned that the Australian dollar’s main appeal lies with it’s high interest rates compared to other developed countries and hence any possible notion of an interest rate cut will often dent sentiments.
Monetary policy meeting minutes of the latest Reserve Bank of Australia meeting will be released early week and i urge everyone to be on a look out for any clues to monetary policies.