Technical tools: simple moving averages (20, 55 and 100), the relative strength index and Bollinger bands.

The Australian dollar surged after Fed’s meeting on March the 15th. The Fed disappointed the crowd with only 2 more rate hikes promised for this year.

After that, there were hints that the next target would be April 2016 high at 0.7835. I’m sceptical about it.

The following 1-hour chart shows AUD/USD bouncing off the highs of March, since the day 21 of the reported month. Hourly SMAs are correctly positioned to expect further bearish developments in the following hours. That can possibly be fuelled by Fed officials’ speeches scheduled for today’s late hours and tomorrow.

Commodity prices have been outperforming during the days before, particularly oil. The aussie has been immune to it, so far. Compliance among OPEC and Russia to accomplish production cuts is being placed in question and within an environment of rising US inventories, it seems that 55 USD/barrel for both ICE Brent and NYMEX Crude Oil will take major efforts to be retaken.

Given the latest interest rate rise by the Fed and the actual low commodity prices, sooner rather than later, the exchange rate will react to those fundamentals.

The following daily chart offers a neutral RSI, at 50. I’m looking for a target imposed by the actual 100-day SMA and by the lower Bollinger band, near the 0.75 level. It is also important to revive that my forecast defies the actual SMAs positioning – the 100-day SMA is below the 55-day SMA and the 55-day SMA is below the 20-day SMA.

For all these factors, my expected target for the 1st of May, 12:00 GMT: 0.7506.
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