AUD/USD Monthly Fundamental Forecast – February 2016

The AUD/USD rebounded over the 70 level but remained weak as traders worry about the Chinese economy. The only saving grace for the Aussie has been slightly better than expected inflation data and stimulus from the PBOC. Otherwise the only reason the currency bounced was market elation after the price of oil recovered from 12 year lows at the end of the month. The Aussie ended with a drop of 2.64% for the month at 0.7088. forex traders remain net-long the Australian Dollar versus the US Dollar, but a recent shift towards crowd selling warns that we may be in the midst of an important shift in trend. It will be important to keep an eye on near-term resistance at the 0.7150 for confirmation that the AUD/USD has indeed turned higher.

The currency’s three-day rally continues as commodity prices edge higher in a risk-on appetite in the market. Oil prices have bounced off their recent 12-year lows, with crude surging three per cent overnight.

“Also last night, US durable goods came in significantly lower than expected, dropping 5.1 per cent in December,” Mr Ive said. “This raises fears about US growth ahead of their GDP (gross domestic product) data tonight.” The weak number dragged on the greenback, which allowed the Aussie to spike, Mr Ive said. But it has since pared back some of those gains.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.

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