Good day forex traders.
Welcome to another forex forecast review of the AUD/USD. Previously we noted that the currency pair was at the strong resistance region of 1.0750. A bullish candle close above this level might suggest more bullish momentum to come. The better than expected US Non-Farm Payroll probably spurred risk taking activities too and hence higher yielding currencies like the Australian dollars benefited from this.
Looking at the AUD/USD chart above, the bullish candle close above 1.0750 did not happen. A bearish correction occurred and sent the currency pair down below 1.0750. If bearish momentum continues, the extended target may be 1.0340. A bullish candle close above 1.0750 should happen first to consider further bullish pressure.
The woes of the European budget deficit crisis has far reaching effects. Global growth is affected and economies are weighted down. The resiliency of Australia’s economy remains but effects are still seen. It was reported that the Australian Reserve Bank lowered its forecasts for inflation and growth for the year. This probably sparked the sell off of the Australian dollars as there are speculations of a possibility of an interest rate cut. The forecast of growth was revised from 4% to 3.5%. Do pay close attention to comments and releases from the Australian Reserve Bank as dovish stances may further weaken the AUD.
Watch out for other economic data such as the unemployment rate of Australia this coming week.
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