Forecast for AUD/USD: Nearing critical Fibonacci levels

Every day, investors around the world attempt to predict what will happen in the forex market. Some of them are lucky, while others are not — like those who bought the Australian Dollar when it was trading at 1.04 and is now trading around 0.80.

However, it is not always easy to jump into the market only after it has fallen. The Australian dollar is rather volatile and so are the markets in general. Thus, every single day, there are just too many investors who buy low and sell high after a little trend change in a currency pair. These investors are looking for forex promising profits.

It is important to learn about the fundamentals associated with a currency pair and to analyze your trading approach before you take any wagers in the forex market. If you should make losses during your first attempt, that would be OK; however, do not let these failures discourage you from trying again in order to get better results.

Forex analysis

Expert traders in the forex usually conduct an analysis of the upcoming events and the general trends before they invest their hard-earned money. If you are just a beginner, it is best to stay away from highly volatile pairs that can render you empty-handed. You can always start with a pair that has remained relatively stable or that has been fluctuating without much damage at certain levels, such as EUR/USD, USD/CHF and AUD/CAD.

Once you get more experience, you can do an analysis of a specific currency pair and decide whether it is worth buying or not. The Australian dollar is a safe bet if you are going to invest for the long term. If you bought AUD/USD at 0.80, you will surely be able to make a profit if you sell it at 0.90 or even more, depending on market conditions and whether the trend is going up or down.

Fibonacci levels

The basis of technical analysis still lies in the Fibonacci numbers. These mathematical constants are used to predict where a certain currency pair will go because they have been proven to be effective in other trading contexts such as stocks and commodities, not just forex.

The Fibonacci numbers are used to indicate the retracement levels after a trend change. These numbers are also known as the Golden Ratio, suggesting that if a price is divided into two parts, the price could be easily predicted in the future.

Here are some Fibonacci levels for AUD/USD: 0.8160, 1.0154 and 1.0613. Once a currency pair has reached around those levels or higher, the trend can be considered to be bullish because there will be upward momentum until the currency pair reaches 1.024 or higher. Therefore you should either sell your Australian dollar at those levels or defer your investment until there is a reversal of this trend when it reaches around 0.

Either way, as long as you conduct an analysis before you invest your hard-earned money, there is a high chance that you will have some decent profits in the coming weeks or months depending on your trading approach and skills in forex analysis.

What makes AUD/USD rise?

The Australian economy is one of the strongest economies in the world. It has a developed common market and it has very strict trading regulations. There are many products that are manufactured in Australia while some other countries import these products from there. Moreover, Australia is a highly developed country when it comes to technology, something that guarantees an increased domestic demand for the Australian dollar.

Given all these factors, it is safe to say that AUD/USD will continue rising in the future, especially if all EU countries become part of the Eurozone and trade only with that currency. A strong Australian economy will allow it to survive any changes that might take place in the EU and as a result, the Australian dollar will rise.