Good day forex traders.
Had a good trading week? I hope you did! Nothing beats ending the trading week with a profit in forex. Yay!
In the previous AUD/USD forecast we noted that while the SMAs continued to indicate bearish inclinations. Fundamentally we continued to observe that developments in China was affecting the Australian economy.
After testing the top trend line of the bearish channel, the AUD/USD broke through the resistance and tested the parity point.
SMA 20 = Flat
SMA 50 = Bearish
After the test on 1, the currency pair had eased off. The currency pair is now bounded between the zone of 0.98 and 1. With the SMAs not in sync, we may see some technical consolidations.
The Reserve Bank of Australia RBA further cut the interest rate to 3.5%. Regardless, it remains the highest among major developed economies. The governor Glenn Stevens believed that the outlook is optimistic. His comments about the prevention of assets bubbles seemed to strike a note with many investors that drastic interest rate cuts may be ruled out. This probably sparked demand for the Australian dollar. Unemployment rate remained low.
China’s latest easing policies continues to drive effects in it’s immediate economic neighbors in the Asia Pacific in particular. Being a large economic market, increased economic activities will benefit the global economic dynamics. Continue to pay attention to China’s moves. This is a good clue for trading the Aussie.
The S&P/AXS 200 is holding above 4000 for now.
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