AUD/USD: forecast for May 9-15
AUD/USD fell from the levels above 0.7700 below 0.7400. The Reserve bank of Australia cut benchmark interest rate from 2% to the record low of 1.75%. In addition, the RBA cut its inflation forecast for the end of this year from a range of 2-3% to just 1-2%. Inflation outlook for 2017 and 2018 was also revised to the downside. According to the central bank, economic prospects of China – one of Australia’s biggest trading partners – is a “key source of uncertainty.”
In these circumstances, it looks like Aussie has room for further weakness. Below 0.7330/15 AUD/USD will be vulnerable for a decline to 0.7250 and 0.7215. On the upside the pair will meet resistance at 0.7400, 0.7450 and 0.7500.
Watch the market’s risk sentiment and keep an eye on Chinese currency reserves and trade balance data this weekend as well as the nation’s inflation figures on Tuesday.