Good day forex traders and readers.
Welcome to the weekly AUD/USD forecast. I hope everyone made some pips during the week. I took a very defensive stance due to the US Federal Government shutdown crisis.
In the previous AUD/USD forecast we noted that the currency pair ended pretty flat. Speculations of an October tapering of the quantitative easing program of the US started to surface and the threat of the debt ceiling impasse crisis loomed.
Looking at the AUD/USD daily chart above we note that the currency pair was bullish for the week. Initial fears of risk aversion seemed to be unfounded and thus again cementing the fact that forex is never 100% predictable.
The current region is yet another S&R support and resistance zone and hence a breach of which will signal the possibility of more bullish action.
A return of the bearish pressure is likely to send the AUD/USD down towards 0.93.
With the US Federal Government in shutdown and the upcoming debt ceiling situation, usual sentimental trading will see risk aversion seeping into the markets. We have thus far seen little indication of it and a possible speculation will be that the markets may be moving away from the notion that the US dollar is a safe haven.
It was reported that the markets are speculating that the Reserve Bank of Australia will refrain from cutting rates for the rest of the year. This would inevitably push up demand for the currency. We do know that the recent positive China performance is a key driver for the Aussie economy and hence this may indeed remove the need for any accommodative gesture from the RBA.