Good day forex traders.
Welcome to another forex forecast review of the AUD/USD. This currency pair is much less popular than the EUR/USD however i feel it presents a good opportunity for diversification.
In the previous review we noted that fundamentals might prove uncertain for the Australian economy due to it’s links to the global economy. Having said so it was observed that the S&P / AXS 200 equity index shows a gentle ascending trend.
The AUD/USD went on a bullish spike on the last day of the trading week, ending above the 1.0430 resistance region.
SMA 20 = turning bullish
SMA 50 = flat
From my experience using the SMAs for the EUR/USD, the SMA 50 may serve as an immediate resistance. If this holds true for the AUD/USD too, we may see a correction down towards 1.0430 and below.
The Australian dollar performed well this week and held out well against risk averse economic developments such as the downgrade of Spain by S&P. Don’t ever doubt the power of the koalas mate! Many reports were speculating on the reason of the spike in the AUD/USD and i find myself identifying more on the idea of the additional quantitative easing by Japan. Liquidity increased, put funds to good use, seek the high yielding assets! The Australian dollar with it’s high interest rate definitely fits the bill!
Talking about high interest rates, the speculation of a rate cut come May is strong. Should it happen, brace for unexpected volatility. You can never prepare well enough in forex! Do pay attention to the Reserve Bank of Australia’s statement for clues to further monetary policies.
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