Australian Dollar Forecast: RSI Flops Ahead of Overbought Territory
In the coming days, there will be plenty of uncertainty when it comes to the Australian Dollar Forecast. This is because the Australian Dollar Forecast is moving up against the US Dollar and is presently trading at the lowest level since the November low.
How can you trade against that? Well, it is definitely going to affect the Forecast as well.
The Australian Dollar Forecast is currently down about 0.4%, but it is possible that this could get even worse. You see, as more political turmoil occurs in the US, investors are now starting to sell off the US Dollars.
Why is this happening? Well, the US Dollar is now down to about 63 cents on the Euro, which is one of the main safe-haven currencies.
That is why the Australian Dollar is going to fall even further before the end of the year. We do not know if the Fed will decide to raise interest rates, but if they do, it is going to cause a lot of fear in the markets.
Therefore, it would make sense for the Australian Dollar Forecast to tighten up further. However, I believe that it is unlikely that the Fed will raise interest rates anytime soon, and therefore the Australian Dollar will continue to weaken as well.
Now, we move on to the US Dollar Forecast. The US Dollar is still down since the beginning of the year, but it has since stabilized around 89 cents on the Euro.
This means that the market time frame is close to closing, but this does not mean that the Australian Dollar is headed anywhere near where it is now. It is still too low for that.
For example, if the Australian Dollar falls to around 82 cents, I think that the RSI will tighten up, but it will only tighten up because it is trying to protect its US Dollar position. If the Australian Dollar drops to around 74 cents, then the RSI will tighten up even more.
Of course, it can make the Forecast tighter than it needs to be, so it is usually right, and sometimes it is wrong. However, it is always out of the range it predicted, and so it is an indicator of when the market is about to begin closing.
You see, when the prediction market is closed, there is no point in tightening the Forecast too much. There are too many factors involved, and if you are going to base the Forecast on Forex Trading Charts, you have to factor in all of them.
This is why the prediction market is closed – to protect the Forecast’s accuracy. Now, you should take these simple points into consideration before you trade, because when the market closes and there is no longer Forex Trading Charts at the ready, then you can forget about the Australian Dollar Forecast.