Good day forex traders and readers.
The weekend is here again and it is time for us to analyze the forex technical chart.
In the previous AUD/USD forecast we noted that the bearish momentum was affected by a bullish uplift. Support and resistance levels were close. We might see a bullish recovery if nothing fundamentally changes. In the meanwhile the markets were divided between the apparent continuation of the US tapering program and China’s positive economic developments.
Looking at the AUD/USD daily chart above we note that the currency pair did attempt to start a bullish momentum in the beginning of the week. However it was soon overwhelmed by bearish pressure and the AUD/USD dipped further.
It is currently testing the support region of 0.9180 which I highlighted last week. Should this support fail, we may be looking at an immediate support of 0.9080 next. The currency pair is now within a bearish channel which I have indicated on the chart.
Any attempt by the AUD/USD to recover lost ground may see a test of the bullish resistance of 0.9280.
With the development seen here this week for the AUD/USD, it is clear that sentiments remain open for more downside momentum. The bullish sentiments which we mentioned were building up last week failed to gain a foothold.
Over the week, officials from the Reserve Bank of Australia were reported to be verbally mentioning the consideration of intervention for the Aussie dollar. Coming from the central bank, this definitely has an impact in sentiments as investors are spooked. As demand for the Aussie dollar drops and holdings reduced, the currency falls in value too.
While the economic data release schedule will be light next week for Australia, the RBA deputy governor will be expected to speak early week and hence we must be careful and be prepared for unexpected change in sentiments.