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In the previous AUD/USD forex forecast review we noted that the 1.0340 resistance was above. Should the resistance fail, we might see an extended target of 1.0750 for the bulls. Fundamentally, the US was bringing in positive economic outlook while the Euro Zone continued to disappoint. Regardless the Australian economy remained resilient as observed from the S&P/AXS 200 equity index.

Technical Analysis

The 1.0340 resistance region was broken and the AUD/USD continued on a bullish momentum as indicated above. If current situation remains, we may be looking at an extended target of 1.0750. Having said so, nothing in forex is 100% predictable. Make considerations for a possibility of a 1.0340 retest.

Fundamental Analysis

While the world economic stage remains clouded by the woes of the Euro Zone budget deficit crisis, the Australia economic is turning out to be resilient. The S&P/AXS 200 equity index has broken the 4200 line and is now almost 4240. Being a commodity driven economy, the rising of gold from under $1600 USD is probably giving some lift to the Australian economy. Natural resources such as iron ore and gold make up a big portion of Australia’s exports.

Next week brings about more economic data such as the Producer Price Index. Monitor them for clues to the resiliency of the Australian economy.

Trade Safely

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Support and Resistance lines are never a single pip

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AUD/USD Forex Forecast Review 22 Jan 12

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