Good day forex traders and readers.
The weekends are here and I hope you made money from forex this week. If you did, you may want to cash some of those pips for a BBQ. Now that’s life ! 🙂
In the previous AUD/USD forecast we noted that the immediate resistance was 0.9680 while the immediate support was 0.9520. The US dollar was weakening as the markets sold USD in favor of higher yielding assets. China is a star of late and is bringing the Aussie dollar along for the ride.
Looking at the AUD/USD daily chart above we note that the currency pair managed to breach the resistance mentioned monetarily. However as observed, the momentum failed shortly and the currency pair dipped past the resistance turned support and is now headed towards the support of 0.9520.
It is worthwhile to note that the middle bollinger band lies in the 0.9520 vicinity too, further increasing the likelihood of a support effect. Any bullish return may target the week’s high at 0.9740.
It was reported that China’s property market prices rose the most since January 2011 in 4 big cities. Investors are worried that this may be a sign of a property bubble and a subsequent policy tightening by the People’s Bank of China may be implemented. This probably caused some apprehension as even commodities prices slide lower. Regardless, on a longer term outlook, it is of our view that China remains an economic power house.
As far as the US is concerned, we are seeing some weakness in the employment market. This has led to some beliefs that the tapering of the quantitative easing by the US Federal Reserve will not happen soon prompting a mixed sentiment of positivity and negativity.
Do continue to monitor the economic releases throughout the new trading week. I will be paying particular attention to China and the commodities.