AUD/USD Forecast August 30, 2012, Technical Analysis

By FX Empire Analyst - Christopher Lewis
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The AUD/USD pair attempted to rally during the Wednesday session, but fell short as the sellers step back into the marketplace. We are currently trading right around the 1.0350 level, which of course is relatively close to the 1.03 level. The 1.03 level is supportive from we can tell, and as such we are thinking that a bounce could come from that level. However, we have recently broken down through a significant trend channel and this should override that concerned in the end.

As the Chinese economic numbers continue to soften, this will of course have a negative effect on the Australian dollar as the Aussies sends so much in exports to the Chinese mainland. As China grows, they buy more and more Australian minerals. There have been reports buy Australian politicians lately stating that the mining sector boom is just about dead. If this is true, this will be very, very negative on the Australian dollar in general.

At the same time, the US dollar will offer a safe haven of sorts too many of the traders around the world. With this being said, the Australian dollar will continue to struggle over time as the world continues to worry about economic conditions globally. As the Chinese economy cools, this will of course reflect poorly on what is going on in Europe and North America. With all this being a bit of a chain reaction, it makes sense that the riskier currencies such as the Australian dollar would lose footing against some of the traditional safe havens out there.

We see the 1.03 level of support as a bit of a necessity for the Australian dollar to keep higher. If that level gives way, we would expect a run down to the parity level in relatively short order. The parity level of course is massive, and if that gives way we could really see a serious fall in this currency pair. As for buying this market, we will not do it until we reach above the 1.05 level again. Remember, for the breakdowns and breakouts, we want to see a daily close for confirmation.

AUD/USD Forecast August 30, 2012, Technical Analysis

AUD/USD Forecast August 30, 2012, Technical Analysis

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