Good day forex traders!
Welcome to our weekly review of the AUD/USD. While this currency pair is less popular than the EUR/USD, I personally prefer it as the price action is often less volatile.
In the previous AUD/USD forecast we noted that the currency pair turned bearish for the week. It punched right through the middle bollinger band.
The middle bollinger band may serve as a resistance next week. Close monitoring on shorter time frames was recommended.
Both upper and lower bollinger bands were considered to be extended bullish and bearish targets for now.
Technical Analysis
Looking at the AUD/USD weekly chart above we note that the currency pair was a doji for the week. As expected, the middle bollinger band functioned as a resistance for the price action.
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We should continue to leverage on the bollinger bands. The middle bollinger band may function as a resistance region while the lower bollinger band is a likely bearish target.
Fundamental Analysis
With the US Federal Reserve increasing the interest rate as expected, the markets are reacting. Equities are taking a hit in view of the increased borrowing costs while the US dollar is strengthening due to the better yield of interest.
Commodities are likely to remain depressed and hence exert a downwards pressure on the Australian economy. Oil is still at a low sub $40.
In view of the low volume market conditions, please be careful of unexpected price actions.
Trade safely.
