Good day fellow forex traders.
Did you make many pips this week? I hope you did. I harvested 24 pips from the AUD/USD this week but hey I am not complaining. Even if it is 1 pip, being in the green is the most important.
In the previous AUD/USD forecast we noted that the currency pair did test the resistance of 0.725 as expected and had earlier made a push for 0.69. There was nothing to suggest that the bearish momentum was over. From the perspective of the bollinger bands, the technical situation was bearish. 0.69 remained a strong support and we would need to see a clear breach of it before expecting further dips. Any bullish momentum might bring us to the bullish target of 0.725.
Looking at the AUD/USD weekly chart above we note that the currency pair was bullish. The region of 0.69 was tested and as mentioned, remains a strong support.
The AUD/USD had since eased above 0.7. It did not achieve a higher range than last week and hence we cannot rule out a return of bearish momentum. The figures remain at a resistance target of 0.725 and bearish target of 0.69.
The pressure on the Australian economy remains as commodities prices remain depressed. A report explored how the lower price of coal is affecting Australia being it’s second largest export. With China growth slowing despite corrective actions taken, the demand for oil, coal, iron, etc is falling. As mentioned previously, China is Australia’s largest trading partner and hence this will have significant impact to to Australian economy.
In the US, the US Non-Farm Payroll came in weaker than expected. This probably gave the AUD/USD some uplift as investors continue to react to developments that may impact the US Federal Reserve interest rate hike decision.
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