Australian Dollar Forecasts: Despite Today's Surprisingly Strong Effort, AUD/USD and GBP/AUD Seen Weakening
- Written by: Gary Howes
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We bring the latest selection of exchange rate forecasts concerning the Aus dollar towards the latter part of the middle week of February.
The Australian dollar exchange rate complex is under pressure on overnight news that Chinese HSBC manufacturing PMI disappointed by printing at 48.3 versus 49.4. This is the second consecutive month in contractionary territory.
"The Aussie fell further from recent highs after data overnight showed that activity in Chinese factories fell at its fastest pace in five years in February. The surprisingly weak PMI data sent commodity prices sharply lower and dented the appeal of the Aussie, whose economy remains heavily dependent on Chinese demand," says Omer Esiner at Commonwealth FX.
Nevertheless, a look at the Aus dollar exchange rate complex shows:
Forecast for the pound vs Aus dollar rate
An analysis provided via spread bet provider IG shows that for GBP/AUD the upside is likely to prevail as long as 1.847 is supportive.
If GPB/AUD declines extend below 1.847 then expect 1.841 and 1.837.
"The RSI is above its neutrality area at 50. The MACD is positive and above its signal line. The configuration is positive. Moreover, the pair is trading above both its 20 and 50 MAs (respectively at 1.85 and 1.8509)," says the note.
"HSBC Chinese Manufacturing PMI was released in the early hours and hit a 7-month low at 48.3, showing the sector contracted for another month. This is another sign of waning Chinese growth and the Australian dollar took a hit on the back of the news. This has supported sterling which experienced a temporary sell off as a result of UK unemployment data published yesterday. We predict sterling will struggle to maintain early gains and expect some sideways trading," says Sasha Nugent at Caxton FX.
Perhaps the worst element of the Chinese data was the employment component decreased at the fastest rate in 5 years suggesting that the slowdown may be more severe than the market thought.
"The Aussie immediately tumbled in reaction to the news hitting a low 8935 versus 9000 prior to the release. However the pair recovered some of its losses as the night progresses as traders speculated that the PMI data may have been seasonally depressed due to Lunar New Year holidays," notes Boris Schlossberg at BK Asset Management.
Forecast for the Australian dollar vs US Dollar
Below are a selection of exchange rate forecasts concerning the key Australian dollar / US dollar pairings which will give broad direction for the lesser crosses:
MIG Bank:
"AUD/USD is weakening after having successfully tested the key resistance at 0.9086. Hourly supports stand at 0.8928 (13/02/2014 low) and 0.8874. Another key resistance can be found at 0.9168 (02/12/2013 high).
"The long-term technical pattern is negative and favours a further decline towards the key support at 0.8067 (25/05/2010 low), as long as
prices remain below the resistance at 0.9168 (02/12/2013 high, see also the 200 day moving average)."
UBS have issued a neutral forecast for the AUD/USD pair: "The pair developed fresh selling under critical resistance at 0.9086. Support is at 0.8871 ahead of 0.8730. Only a close above 0.9086 will be a major bullish event."
A note just issued by RoboForex says:
"The Australian Dollar is moving downwards; market completed descending wave with extension. We think, today price may form correction towards level of 0.9015 and then start forming another descending structure to reach level of 0.8780. Alternative scenario implies that pair may reach level of 0.9100 and then continue moving inside descending trend to reach level of 0.8400."
