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AUD/USD Forecast January 27



Good day forex traders and readers.

It is the weekend again I hope you had a good time shorting the AUD/USD. The strong obvious trend is booking gains for many of the readers who wrote to me 🙂

In the previous AUD/USD forecast we noted that the currency pair was bearish for the week and it achieved the bearish target of 0.8840. It was beyond the crucial support level and might open down to 0.8600. The Australian employment data was disappointing, fueling more concern.

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Technical Analysis

Looking at the AUD/USD daily chart above we note that the currency pair dipped further for the week after failing to secure a recovery by mid week.

Should the bearish momentum continue, as mentioned previously, the AUD/USD may target 0.86 followed by 0.85.

Any bullish attempt to halt the descend will probably need to breach the support region of 0.88.



Fundamental Analysis

It was reported that China’s bank regulator instructed regional offices to increase the evaluation of credit risks in the coal-mining industry. As the major trading partner of Australia, this potential growth limitation move by China will probably affect the sentiments of the Aussie economy.

We previously reported that the Reserve Bank of Australia governor mentioned the acceptable price of 0.85 for the AUD/USD in an interview. This no doubt increased the bearish pressure. It is now also reported that a central bank board member mentioned 0.8 to be fair deal. This again will probably increase the bearish sentiment towards the Aussie dollar.

Keep a close eyes on the Australian economic releases next week. The sentiment situation is crucial for the AUD/USD.

Trade safely.

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