Introduction

In this article AUDUSD will be analyzed both fundamentally and technically and as known nothing is impossible in Forex so different scenarios will be drawn to express about the most probable scenarios with the AUDUSD.

What is affected the move of AUDUSD nowadays:

Fundamental analysis:

AUDUSD is affected now by two different policies by both Reserve bank of Australia (RBA) and United States Federal Reserve (FED) and also affected strongly by commodity prices which strongly hit Aussie in the last year, finally Aussie and other currencies is affected due to strong growth in US in the last months which make US$ to be favored.

  • Different policies by RBA and FED:

RBA cut interest rate and is ready to do more as necessary, RBA still made quantitative easing (QE) and if needs it may extended it.

In different, US FED has just raised interest rate for the first time from ten years, FED delayed its first rate hike more than once in order to prevent broad US$ gains which may dampen US growth, this time rate hike is very near but if something horrible hit markets again, more rate hike may be delayed more.

  • Commodity prices collapse:
Aussie was hit strongly due to collapse of commodities last year, Aussie suffered hardly from losses of Gold and steel… etc. any recovery in commodity prices should push Aussie higher.

Last year both gold and Aussie were hit hardly and this year both of them seemed bottomed as seen in charts below:

Gold Chart :


AUDUSD chart :


  • Moderate US growth:

US growth still so strong in last quarter as it growth increase 3.7% in last quarter VS 0.6% quarter before, last US growth Q/Q were as follows (4.6%, 4.3%, 2.1%, 0.6% and 3.7%, 2% and 0.7% last quarter), US growth still moderate and accepted for FED.



Technical analysis:


Pair review:

AUDUSD broke multi monthly resistance at 0.7400 holding now around 0.7600, as 0.7400 was clearly broken this month then it will strong bullish signal for the pair for the midterm view, any close again below 0.7400 will dampen any expected bullish view so 0.7400 area will be critical and should be noticed before any long or short entry on the pair, at upside, pair will face strong resistance around 0.7750 but the extremist strong resistance will be around 0.8000 which will hold in the midterm view.



Different scenarios:

  1. AUDUSD will extended upside move towards 0.8000 without breaking down 0.7400, this scenario may have probability 60%, AUDUSD broke 0.7400 after months of consolidation so this means that pair is strongly supported and 0.7400 now is considered as critical support.
  2. AUDUSD will break lower 0.7400 again aiming at least 0.7000, this scenario may have probability 20%, if pair may break lower then it may return to year low around 0.6800.
  3. AUDUSD will break higher beyond 0.8000, any clear break above 0.8000 will send the pair strongly higher, this scenario may have probability 20%, clear break above 0.8000 will be critical event for the long term view of the pair.
Conclusion:

AUDUSD still affected by different RBA and FED policies, commodities prices strongly affected Aussie, lasted gains of gold supported Aussie and expected delay of next FED interest hike should benefit AUDUSD more.
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