AUD/USD Forecast August 15, 2012, Technical Analysis

The AUD/USD pair fell during the session on Tuesday, but managed to bounce back to hugging the 1.05 level. This suggests to us that perhaps there is support coming back into the marketplace, and as such we may see a bit of a bounce from this point in time. A break of the Tuesday highs would be enough to get us going long again.

We are currently trapped within an up trending channel, and have been going sideways for the last two weeks roughly. The fact that we haven’t fallen far shows just how strong the trend is in favor the Australian dollar right now. With this in mind, we have absolutely no plans to sell, and certainly wouldn’t do it until we close well below the 1.03 level.

With central banks out there willing to print currency hand over fist, there will certainly be a push for gold. As gold rises, so does the Australian dollar 9 out of 10 times, and as such we think that not only is there a good technical setup for the Aussie, there are plenty of fundamental reasons as well. Because of this, we really don’t think that there is going to be any sell signals anytime soon.

It looks from the longer-term charts that we could perhaps rise as high as 1.08 or even 1.10 before the move is said and done. With this in mind, it’s very difficult to sell this pair and we think that although we could get a bit of choppiness above, the truth is that if you are willing to hang onto the trade and be patient – you are going to be rewarded in the end. Adding to that the fact that there is a positive swap at the end of every day, the move really could add up before it’s all said and done.

The only potential hiccup that we see in the strength of the Australian dollar at the moment would be if the Federal Reserve decides not to do any monetary easing during the month of September. If that in fact does happen, we could see the Australian dollar selloff quite strongly.

AUD/USD Forecast August 15, 2012, Technical Analysis

Written by FX Empire