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    AUD/USD: next target — $0.72

    Ideal conditions for the Australian dollar’s weakening have recently developed in the foreign exchange market.

    • Firstly, the Aussie’s main trading partner is China. And the market now fears that economic slowdown in China will be stronger than expected. The so called “bubble” has ruptured in the Chinese stock market: it’s been plummeting for the fourth consecutive week, with Shanghai Composite Index falling from the June highs and approaching 35%. The risk of a “hard landing” is being actively discussed again. Investors understand that economic problems in China will inevitably affect Australian economy, and it also puts pressure on the national currency’s exchange rate.
    • Secondly, the UAD is one of the high-risk assets, and investors’ concerns about Greece and China significantly undermined interest in such instruments.
    • Third, the Aussie is a commodity currency, and quotes for many commodities (including iron ore, which is especially important in the case of Australia) are now experiencing decline – mainly because of China.

    Under the influence of these negative factors, the AUD/USD pair broke through the level of $ 0.75 last week, confirming my May forecast for this currency pair. This week the Aussie continued its decline. It has already renewed its six-year lows below $ 0.74.

    The next target for the AUD/USD pair is situated at $0.72, which was estimated by Goldman Sachs and ANZ analysts back in February. I believe that this level will be reached this summer.

    666

     

    Dear traders, please post your comments to our forecasts and share your own opinion. Your ideas can be very helpful for the newcomers in the forex market. Thank you!

    Ideal conditions for the Australian dollar’s weakening have recently developed in the foreign exchange market.

    • Firstly, the Aussie’s main trading partner is China. And the market now fears that economic slowdown in China will be stronger than expected. The so called “bubble” has ruptured in the Chinese stock market: it’s been plummeting for the fourth consecutive week, with Shanghai Composite Index falling from the June highs and approaching 35%. The risk of a “hard landing” is being actively discussed again. Investors understand that economic problems in China will inevitably affect Australian economy, and it also puts pressure on the national currency’s exchange rate.
    • Secondly, the UAD is one of the high-risk assets, and investors’ concerns about Greece and China significantly undermined interest in such instruments.
    • Third, the Aussie is a commodity currency, and quotes for many commodities (including iron ore, which is especially important in the case of Australia) are now experiencing decline – mainly because of China.

    Under the influence of these negative factors, the AUD/USD pair broke through the level of $ 0.75 last week, confirming my May forecast for this currency pair. This week the Aussie continued its decline. It has already renewed its six-year lows below $ 0.74.

    The next target for the AUD/USD pair is situated at $0.72, which was estimated by Goldman Sachs and ANZ analysts back in February. I believe that this level will be reached this summer.

    666

     

    Dear traders, please post your comments to our forecasts and share your own opinion. Your ideas can be very helpful for the newcomers in the forex market. Thank you!


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