30 Apr 2015
AUD/USD: A last recovery attempt ahead of key 0.7850 support
FXStreet (Guatemala) - AUD/USD is currently trading at 0.7894 with a high of 0.8023 and a low of 0.7861.
AUD/USD is making a minor recovery towards the 0.79 handle having lost some major ground from above the 0.80 handle. The greenback is has performed well across a number of currencies, in respect of a come back post yesterday's disappointment and miss in the US economy's Q1 GDP result.
We are entering risky days ahead with the RBA meeting coming up, and long on 0.8000 would be trading on thin ice given the Central Banks commitment for a lower currency. Analysts are on the fence as to whether the RBA will take any action this meeting around, considering the latest improvements in the economy, however, analysts at Westpac Banking Corporation forecasts an RBA rate cut next week and forecasts the Fed to begin policy normalisation in September. "Thus as the interest rate differential drops further, so will yield, issuance and demand for the A$. Thus we continue to forecast further weakness in the A$ as the year progresses."
Technically, Karen Jones, chief analyst at Commerzbank suggests that the market remains bid near term while above the near term uptrend at 0.7852 and said it will need to close below here to signal the resumption of the down move. As far as the upside is concerned, Jones explained, "A close above 0.8068 would initiate a deeper recovery to the 0.8247/38.2% retracement of the move down from September 2014 and the 0.8295 2015 peak."
AUD/USD is making a minor recovery towards the 0.79 handle having lost some major ground from above the 0.80 handle. The greenback is has performed well across a number of currencies, in respect of a come back post yesterday's disappointment and miss in the US economy's Q1 GDP result.
We are entering risky days ahead with the RBA meeting coming up, and long on 0.8000 would be trading on thin ice given the Central Banks commitment for a lower currency. Analysts are on the fence as to whether the RBA will take any action this meeting around, considering the latest improvements in the economy, however, analysts at Westpac Banking Corporation forecasts an RBA rate cut next week and forecasts the Fed to begin policy normalisation in September. "Thus as the interest rate differential drops further, so will yield, issuance and demand for the A$. Thus we continue to forecast further weakness in the A$ as the year progresses."
Technically, Karen Jones, chief analyst at Commerzbank suggests that the market remains bid near term while above the near term uptrend at 0.7852 and said it will need to close below here to signal the resumption of the down move. As far as the upside is concerned, Jones explained, "A close above 0.8068 would initiate a deeper recovery to the 0.8247/38.2% retracement of the move down from September 2014 and the 0.8295 2015 peak."