Good day forex trading koalas.
Welcome to our weekly AUD/USD forex forecast review, served to you in a brand new website design. I hope you like it 🙂
In the previous review, we noted that the SMA 50 might serve as an immediate resistance. If indeed so we might see a correction down towards 1.0430 and below. Speculation of a rate cut in May was strong. Should it happen, there might be unexpected volatility.
Looking at the AUD/USD daily chart above, the SMA 50 indeed functioned as an immediate resistance of sorts. I LOVE IT WHEN MY SMAs WORK !
SMA 20 = flat
SMA 50 = flat
While both SMA remains flat, the chart action is bearish. Having said so, 1.0140 is a possible support and close monitoring must be done.
The Reserve Bank of Australia RBA cut the interest rate to 3.75% which is more than expected. This was largely a surprise to the market and the Australian Dollar weakened. This increases speculation that even the economy of Australia is not spared from the woes of the Euro Zone.
At the end of the trading week, the US Non-Farm Payroll came out worst than expected, dealing a blow of risk aversion across global markets. Sentiments were of that the US economic growth is slowing down. When risk aversion strikes, higher yielding financial instruments such as the Australian Dollar usually suffers a outflow as capital seeks “safer” assets such as the US Dollar.
While not directly related, it is still important to note that elections are happening in France and Greece over the weekend and this may bring about unexpected developments and volatility to the currency exchange markets.
More economic data is due for the upcoming week too. Trade Balance for example is an important statistic to look out for since Australia is an export economy.
Related Forex Articles from the Koala Forex Training College.