Good day forex traders and koalas!
It is a warm sunny weekend for me and this makes me want to nap. Koala Style! By the way did you read about the swimming koala recently? Ha! We do have many tricks up our sleeves 🙂
In the previous AUD/USD forecast we noted a test on the support of the 1.0430 region. Any failure might bring about more bearish moves. Fundamentally the Australian economy remains encouraging although recent developments globally and in China ( Australia’s largest trading partner ) are weighting down on it.
The 1.4030 support did fail and 1.0330 was taken out too.
SMA 20 ( RED ) = Bearish
SMA 50 ( BLUE ) = Flat
The SMAs are not aligned and hence this may suggest short term volatility. More observation is required though. The SMA 200 ( BLACK ) which is an indication of possible long term trend is in the vicinity and being above the price action, it may act as an immediate resistance to the AUD/USD. If the currency pair fails to reclaim 1.0330, we may be seeing the extended bearish target of 1.020 next.
China is due to publish a manufacturing report next week and there are speculations that it may highlight weakness in the Chinese economy. As i mentioned previously, China being Australia’s largest trading partner often has a direct impact on the direction of the Aussie economy.
It was reported that Australia’s mining industry is stalling and since this is one of the Australian primary industry, apprehension is high.
The Reserve Bank of Australia RBA is scheduled for an interest rate decision next week. There are speculations of a possible interest rate cut. The high interest rate of the Australia dollar is one of the main attraction for the currency and hence any reduction may dampen demand.