Good day forex traders and readers.
How was your trading week? As usual I hope that everyone was able to harvest some pips. There is simply plenty to go around with!
In the previous AUD/USD forecast we noted that the currency pair was bullish. As expected, 0.778 was achieved. The currency pair was at the top of the current consolidation range and close monitoring was required.
Immediate resistance laid around 0.7850 – 0.7900. An extended bullish target would be 0.8. A bearish return would likely target 0.778 and down to 0.7600.
The bottom bollinger band was bullish and hence the bullish momentum might be around for the short term.
Looking at the AUD/USD weekly chart above we note that the currency pair was bullish for the week as expected and had in fact spiked up. I love it when my forecast works and I love it more when my readers make money! I had a few readers writing in to tell me about their big profits and great trading I must say. 🙂
The bullish target remains at 0.8. Should the AUD/USD turn bearish, 0.778 and after which 0.76 remain possible bearish targets.
It is crucial to note that the middle and top bollinger bands are starting to turn bullish too and if so, it may indicate the end of the bearish trend for now. Close monitoring is a must in the upcoming weeks.
While the US Federal Reserve kept interest rate at a record low, the calendar based reference to an upcoming interest rate hike was dropped. This brought apprehension or excitement to the markets, depending on which sector we are referring to as an absence of calendar time frame indicates a possibility of an interest rate hike anytime. For investors, many are concerned of an end to cheap money. This will affect general sentiments in the U.S. On the opposite spectrum, currency traders are thrilled as an interest rate hike will likely give a boost to the value of the U.S. Dollar.
The Rsserve Bank of Australia is due to announce it’s interest rate decision early next week and there is a growing number of economists who believe that a rate cut will occur. In fact the sentiments are such that the spike in the AUD/USD was retracted greatly due to the sentiment fall off. As mentioned always, a cut in interest rate usually creates a dampening effect on the currency. Please practice proper money management in anticipation of this critical economic event.
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