Good day readers.
How was your trading for the week? I hope you harvested well during the week’s trading of the AUD/USD.
In the previous AUD/USD forecast we noted that the currency pair indeed went for an unprecedented low. Many of our readers wrote in to share that they earned a lot. That was excellent news. From a technical point of view, the currency pair remained bearish. The lower bollinger band was steep. The AUD/USD tested 0.69 and had since eased above 0.7. Any downwards pressure would likely test 0.69 again. A bullish recovery would likely test 0.725.
Looking at the AUD/USD weekly chart above we note that the currency pair did test the resistance of 0.725 as expected and had earlier made a push for 0.69. Many readers were pleased with the clockwork outcome. 🙂
As I mentioned previously, there is nothing suggests that the bearish momentum is over. In fact from the perspective of the bollinger bands, the technical situation is bearish. Having said so, 0.69 is a strong support and we need to see a clear breach of it before expecting further dips.
Should a recovery returns, 0.725 remains as our medium term bullish target.
We are seeing a fundamental pressure on dampening Australian dollar.
Fears of continued China slow down is sending downwards pressure as the global economic power is Australia’s largest trading partner. The reduced commodities prices and China’s economic laggard are affecting key Australian sectors like mining.
There is talk that the Reserve Bank of Australia may further cut rates in 2016. In fact a report by ANZ calls for a AUD/USD drop to 0.64 next year in view of expected rate cuts.
The US Federal Reserve chair Janet Yellen mentioned that despite a hold on interest rates, it is still appropriate to raise it by this year. This will likely increase the demand for the US dollar.
We Need Your Support!
As you know, I do not have any budget and I have never charged you for all the work. I need your support to get the word out on the website so that more people will visit and I can continue writing for you. Please share the website in facebook, forums, websites and communities. Thank you.