Mid-Week Forex Forecast For AUD/USD, EUR/USD And USD/CAD

By Jay Norris:The Aussie dollar initially spiked higher on news that the German high court green-lighted a European bailout fund, but ended the day around where it was trading prior to that news, albeit in positive territory. The AUDUSD over the last week also reaffirmed its status among Western markets where bad economic data is seen as bullish because of the prospects for supportive government action, i.e.: the Keynesian Dividend.

By Jay Norris:AUDUSDNo news was great news for AUDUSD this past week as the favorite currency of institutional investors posted a 4-month high on Friday, July 27th, 2012.

By Jay Norris:AUDUSD

By Jay Norris:It's hard to keep a market with low non-systemic risk down. The Aussie had reversed Monday's losses on Tuesday, and spiked higher today - Wednesday - following a mixed U.S. Durable Goods number and a jump in pending U.S. home sales. The Aussie has a tight correlation to U.S. blue chip stock indices and benefits from positive U.S. economic developments. The direction on the Daily chart is now back higher.

Chris Ciovacco submits: Early September is very important for the financial markets; especially for the bulls. Numerous elements are in place for a rally to take hold now. The markets have been weak and the bears have been in control. If the bulls cannot make a stand soon, it will be a bad sign for risk assets. The good news for the bulls is several factors, across numerous markets and asset classes, are pointing to a possible rally in risk assets:

The LFB submits:The last trading week of July is holding global risk markets in tight ranges, has sold commodities to near-term support, and yet still has the dollar index on the run lower. There is complete separation in regard to major currency pair movement, with an every-man-for-themselves mentality that has extreme reactions to macro-economic releases. The market has to absorb a speech from Bank of England Governor King, and U.S. Durable Goods Orders on Wednesday.

By Jay Norris:Aussie IllsHas the Aussie finally lost its luster? I think it's still too early to tell, but we definitely know a currency is in bad shape when it's making the Euro and the U.S. Dollar look good.

By Jay Norris:Despite late session intraday weakness over the past couple of days AUD/USD continues to hold onto its recent gains. The Reserve Bank of Australia held its key cash rate at 3.5% during yesterday's session but cautioned that they are looking at "a more subdued international outlook than was the case a few months ago."