Good day forex traders and koalas.
Welcome to another review of the AUD/USD currency pair. I often mention that it is good to consider diversifying your investments over currency pairs that have different fundamental backdrops. The Aussie dollar is one of my personal favorite diversification alternative to the EUR/USD.
In the previous AUD/USD forecast we noted that the currency pair was bearish. This was despite the currency pair trying to recover from a bearish dip. The currency pair tested the support of 1.0480.
Looking at the AUD/USD daily chart above we note that the currency pair faced a stronger bearish pressure this week. The support level of 1.0480 was taken out and the AUD/USD went down to test the 1.0400 support. Should the bearish pressure continue, immediate support will be 1.0400 followed by the extended target of the 1.0360 support.
With the Euro Zone’s budget deficit crisis appearing to be receding in recent times, the global economic stage is probably also in a better stance.
A look at the Australian equities index ASX 200 indicates continued bullish advancement. This suggests that the Australian economy remains robust and resilience. China reports better economic figures and being Australia’s largest trading partner, this probably has a direct impact on the Australian economy.
There were speculations reported of a possible rate cut by the Reserve Bank of Australia and hence we may be seeing the Australian dollar getting sold. This rate decision will be announced 2 weeks later.