Good day forex traders and readers.
Welcome to the weekly AUD/USD forecast and I hope you are having a great weekend so far.
In the previous AUD/USD forecast we noted that 0.9 might be a strong support. If a bullish correction came, we might test the resistance of 0.9320. From a fundamental point of view, China’s slowdown continued to weight down on the currency pair. We had yet to see much uplift from the apparent reversal of US Federal Reserve chairman Ben Bernanke’s stance on quantitative easing tapering.
Looking at the AUD/USD daily chart above we note that the currency pair did hit support near the 0.9 region. It then rose to test the resistance region of 0.9320 but failed to break through it.
The bollinger bands are exerting a fair amount of technical influence and hence this remains our guide for possible support and resistance. Any bearish momentum will need to test the immediate support of 0.9080. The immediate resistance for now appears to be 0.9320.
As we can observe from the tightened bollinger bands, volatility has reduced.
As the markets worldwide acknowledges the US Federal Reserve latest stance on the quantitative easing program, the Australian equities and currency remain somewhat light on gains. This probably comes as a result of China’s lackluster economic growth. Being Australia’s largest trading partner, many investors apparently let a great amount of their sentiments be decided by China’s economic progress.
A number of investors are speculating of an upcoming interest rate cut and hence the Aussie dollar remains weighted down.
It was reported that China has removed the lower limit on lending rates in an effort to spur economic growth. This may improve the outlook as lower lending rates means easier conditions for the businesses.
Next week will not see many Australian related economic releases and hence some ranging may be possible.
Refer to the weekly pivot data for the AUD/USD below for some possible indications of support and resistance.
R3 0.9543 R2 0.9423 R1 0.9236 PP 0.9116 S1 0.8929 S2 0.8809 S3 0.8622