Fundamental Forecast for the Australian Dollar: Bearish
The past few sessions have been kind to the Australian Dollar, with AUD/USD benefiting from a strong Australian employment report, news that China’s imports grew by a larger-than-expected 20.3% in March and US Dollar weakness after Donald Trump told The Wall Street Journal that the American currency “is getting too strong”.
However, the days ahead may not be so gentle. AUD/JPY rebounded last Thursday, while AUD/USD surged to its highest level since April 4.
Chart: AUD/USD Daily Timeframe (Year to Date)
Looking ahead, though, the Aussie is generally one of the first currencies to suffer when traders decide to limit their risks by seeking havens such as the Japanese Yen and gold. And it would be unwise at the moment to rule out a rise in risk-off sentiment given the ongoing turmoil in Syria, the approach of the French elections and – particularly – the belligerence of North Korea.
Moreover, the Australian jobs market is likely to cool in the months ahead, IG client sentiment data are currently sending out a bearish signal and, from a technical perspective, there’s plenty of resistance for AUD/USD around 0.76.
Chart: AUD/USD 15’ Timeframe (April 12 – 13)
