FUNDAMENTAL AUSTRALIAN DOLLAR FORECAST: BEARISH
- Australian Dollar[1] just had a roller coaster week
- What strong GDP gave, trade and emerging-market worries took away
- This week it has to face the Fed
Find out what retail foreign exchange traders make of the Australian Dollar’s chances right now at the DailyFX Sentiment Page[2].
The Australian Dollar has just endured something of a volatile week. The good news, perhaps, is that it may not be set for a repeat in the next seven days. The bad news, for bulls at least, is that there are few reasons to expect much more strength.
The Aussie rose on stronger-than-expected retail sales and corporate profits data[3] last week. These raised the curtain for what turned out to be a blockbuster return to form for official Gross Domestic Product expansion in the first quarter. Its 1% rise knocked forecasts way out of the park[4].
However, GDP figures are always open to charges of tardiness- we are after all close to the end of the second quarter now. Sure enough, the currency was hit by more-recent data. April’s trade surplus wasn’t far from market hopes but export weakness fueled worries that the first quarter may just be as good as it gets for the Australian economy this year.
The currency was hit again by worries about the emerging markets, and by AUD/USD’s its inability to break above technical resistance around the 0.7672 level.
The coming week will probably seek market interest focused on Thursday in the Asia Pacific region. That’s when Australian employment numbers will see daylight. These are expected to come
