Good day forex traders and readers.

Welcome to another weekly forecast of the AUD/USD. It was an exciting week for the currency pair and I hope it was a good one for you too 🙂

In the previous AUD/USD forecast we noted that the currency pair gained a bullish push and tested the resistance of 0.88. The AUD/USD was ranging due to volatility and the immediate resistance was 0.88. Should the resistance fail we might be looking at 0.8880 next. We had to be careful of any return of the bearish momentum. Should it return, we might see a test of 0.8680. A number of readers found success from the previous article and had a good harvest of pips.

Technical Analysis
Looking at the AUD/USD daily chart above we note that the currency pair was bullish for the week.

Early week saw a bullish spike to start the momentum. The currency pair extended beyond the resistance of 0.8880 in view of the strong uplift and 0.8880 subsequently functioned as a support. Towards the end of the trading week we noted that the AUD/USD tested the strong resistance of 0.9. We need to monitor this region as a clear breach of this may open up more upside opportunities such as 0.9140.

An attempt by the bears to regain control will likely see 0.8880 tested followed by 0.88. An extended bearish target will likely be 0.8680.

Fundamental Analysis

Last week I mentioned about the crucial interest rate event by the Reserve Bank of Australia. Any unexpected development may result in volatility. Indeed so we had a strong uplift in value of the Aussie dollar. The Reserve Bank of Australia raised the economic and inflation outlook. The governor of the Reserve Bank of Australia mentioned that the most prudent course is likely to be a period of stability in interest rates. Interest rates usually have a substantial effect on a currency. This probably marks the end of the easing cycle promoting traders and investors to increase their expectation of the Aussie currency. To the readers who wrote in to thank TheGeekKnows for the heads up, most welcome ! We exist to serve :p

With this new development, we may see less bearish pressure in the coming weeks. Nonetheless the currency pair may still be affected by external factors such as China and the emerging markets’ woe. We also need to continue monitoring the economic statistics of Australia. The unemployment rate remains a concern.

To the readers who have yet to join the free email mailing list, I highly urge you to do so. Get the most out of TheGeekKnows with forex updates, reminders and warnings! Sign up on the right side bar 🙂

Trade safely.

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AUD/USD Forecast February 9

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