Good day forex traders and readers.
Welcome to the weekly AUD/USD forecast review where we seek to understand the underlying technical and fundamental influences affecting the currency pair.
In the previous AUD/USD forecast we noted that the bearish momentum slowed towards the end of the trading week but remained far from being extinguished. The current region of 0.9410 was an immediate support region. Failing which we could be looking at a lower price for the currency pair. From a fundamental point of view, China’s good performance remained one of the crucial factors supporting the resilience of the AUD/USD from any downside pressure.
Looking at the AUD/USD daily chart above we note that the currency pair did receive further bearish pressure as expected despite an early week attempt to climb.
I have highlighted in red the probable immediate support for the current bearish move and we do observe it to have affected the price action previously.
Should a bullish correction occur, we may be looking at the target highlighted green which had also occurred previously too. It is also the middle bollinger band which may add to the possibility of influence.
In the statement from the Reserve Bank of Australia, it is noted that the outlook retains a bias towards the downside. It is a common belief now among the markets that an interest rate cut is possible and this is giving the currency pair a down side pressure.
As far as China is concerned it remains supportive towards the Aussie dollar as it’s economy continues to deliver good results. Being Australia’s largest trading partner, this will have a positive effect.
The US Non-Farm Payroll turned out to be much better than expected. This probably contributed to the US dollar demand and therefore depressed the Aussie dollar. The job market is often a critical indicator of economic health.