Good day forex traders and readers.
Welcome to the weekend edition of the AUD/USD forecast. Did you make money with your forex trading this week? I hope you did. Do remember that forex is never about big wins over night so a consistent growth of profit is the name of the game!
In the previous AUD/USD forecast we noted that the currency pair was above the resistance of 0.9. Having said so we noted that it fell below during the week and might do so again this week. The Australian economy remained stretched as unemployment was reported to be high. China developments continued to exert a huge influence on the sentiments.
Looking at the AUD/USD daily chart above we note that the currency pair was bearish for the week. In the previous forecast I mentioned the possibility of a fall below 0.9 and I was right. The AUD/USD is now just below the pivotal point of 0.9.
A continued bearish momentum may see the immediate support of 0.8880 tested. After which we can expect the possibility of an extended bearish target of 0.88.
Should the bulls return, we will need to see 0.9 decisively taken down before an extended bullish target of 0.9140 can be considered.
In the recently released meeting minutes from the Reserve Bank of Australia, it was noted that the board were generally in agreement that a lower Aussie dollar is expansionary for the Australian economy. Interest rates are likely to remain low for some time and this will probably exert a downwards pressure on the value of the Australian dollar.
I mentioned always that the developments of China is crucial for the AUD/USD and indeed it is. This week saw a worst than expected economic release of the Purchasing Managers’ Index. It came in at 48.3 which is lower than the expected 49.5. It is important to note that a value below 50 indicates contraction. This development probably dampened sentiments and brought down the Aussie dollar. For those new to the site wondering why will it affect the AUD/USD, one of the main reason is because China is Australia’s largest trading partner.
While the overall schedule for economic releases related to the AUD/USD is rather light next week, it is still prudent to be alert and to observe proper money management.
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