Good day forex traders and readers.
Welcome to the weekly edition of the AUD/USD currency pair. This is an often overlooked forex pair that may be better performing than the EUR/USD at times.
In the previous AUD/USD forecast we noted that the currency pair stayed within the channel of 0.9 and 0.9140. Having a strong technical basis is of paramount importance in trading. Should the 0.9140 resistance fall, we might expect a bullish target of 0.93 followed by 0.95.
Looking at the AUD/USD daily chart above we note that the currency pair broke out of the 0.9140 channel mentioned last week and tested the resistance of 0.93 as expected.
While the currency pair has since eased, the AUD/USD may test 0.93 again and should it fall, we may expect an immediate resistance at 0.938 followed by an extended bullish target of 0.95.
Any bearish return will likely see 0.9140 turn into support before falling back into the channel base of 0.9 / 0.9020.
The current bullish momentum is probably more of a sentimental run rather than a new trend.
Earlier on Wednesday it was reported that the Reserve Bank of Australia governor mentioned that the Australian economy may strengthen as we progress into the year. This probably increased the positive sentiments in the market.
China was also reported to have mentioned that they are ready to do more to stimulate the economy. Being the largest trading partner of Australia, I always mentioned that we must not underestimate China’s impact on the Aussie.
The Reserve Bank of Australia cash rate and statement event is due early week and hence we must be careful of any unexpected developments.
To get the most out of TheGeekKnows, join our free email mailing list. Get forex updates, forecasts and warnings! Join on the right side bar.