AUD/USD enjoyed an excellent week, gaining over 200 points. The pair tested the key 0.900 line and closed the week at 0.8957. This week’s highlights are NAB Business Confidence and Employment Change. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
Updates:
- Feb 14, 17:39: GBP pushes higher in a week of positive data; AUD: By Alex Edwards at UKForex, an international money transfer service. The pound pushed higher throughout this week, closing near to 1.67 on…
- Feb 13, 16:43: Forex Analysis: AUD/USD Retreats from Rally Highs: February 13, 2014 – AUD/USD (daily chart) has tentatively retreated from its recent two-week-long rally that brought the currency pair…
- Feb 13, 15:41: A Quiet day for equity markets: After a fairly quiet day in terms of North American economic developments, equities took a breather from their four day…
- Feb 13, 11:29: Push and pull on the Aussie: The Aussie has been on something of a roller-coaster ride recently as the central bank has moved away from trying…
- Feb 13, 9:04: Australian unemployment hits 6% – AUD/USD loses 0.90: The jobs data released by Australia for the month of January were significantly worse than expected, no matter how we…
- Feb 12, 15:58: Janet Yellen’s testimony calms markets: The financial markets welcomed Janet Yellen’s testimony to Congress on monetary policy with open arms yesterday, embracing the continuity between…
- Feb 11, 18:52: AUD/USD: Trading the Australian jobs Feb 2014: Australian Employment Change, which is released monthly, provides a snapshot of the health of the Australian labor market. A reading…
- Feb 11, 16:08: Janet Yellen’s testimony does not bear surprises: Whether traders were glued to their TVs taking in the developments of the Olympics in Sochi, or investors were wary…
- Feb 11, 11:02: First semi-annual testimony for the new Fed Chair Janet: The big issue for today will be the testimony from the new Fed Chair Janet Yellen. This will be her…
- Feb 10, 15:13: Financial markets back to normal: What a difference a week makes. The nervousness that gripped financial markets at the beginning of last week has abated…
- Feb 10, 10:28: US employment figures send mixed signals to the Fed: The US employment report on Friday once again fell short of expectations and has added to the uncertainty surrounding US…
AUD/USD graph with support and resistance lines on it. Click to enlarge:Â 
- NAB Business Confidence: Tuesday, 00:30. The indicator has been steady in recent readings, posting 6 points in the previous release. The markets will be hoping for another strong release for January.
- House Price Index: Tuesday, 00:30. HPI helps analysts gauge the level of activity in the housing sector. The index posted a respectable gain of 1.9% last month, but this fell short of the estimate of 2.3%. The markets are expecting more positive news for January, with an estimate of 3.2%.
- Home Loans:Â Tuesday, 00:30. An increase in home loans points to stronger activity in the housing industry as well as increased consumer confidence and spending. The indicator gained 1.1% last month, matching the forecast. The estimate for the January loan is 0.9%.
- Chinese Trade Balance: Tuesday, Tentative. Chinese key indicators such as Trade Balance can affect the direction of AUD/USD since China is Australia’s number one trading partner. Trade Balance dropped to $25.6 billion in December, down sharply from $33.8 billion a month earlier. The markets are anticipating that the downward trend will continue, with an estimate of $24.2 billion.
- Westpac Consumer Sentiment: Tuesday, 23:30. Consumer confidence has been sluggish, as the indicator has posted three declines in the past four releases. Another reading below zero could push down on the Aussie.
- MI Inflation Expectations: Thursday, 00:00. This indicator looks at consumer expectations with regard to inflation. The indicator has been climbing, and hit 2.3% last month.
- Employment Change: Thursday, 00:30. This is the highlight of the week. The indicator has been marked by sharp fluctuations, leading to estimates that are well off the mark. The December reading was awful, with a decline of 22.6 thousand. The markets had expected a gain of 10.3 thousand. A strong turnaround is expected in the January release, with the estimate standing at 15.3 thousand. The Unemployment Rate is expected to nudge higher to 5.9%, up from the present 5.8%.
- RBA Assistant Governor Debelle Speaks: Thursday, 1:25. Debelle will address a financial symposium in Sydney. Analysts will be listening carefully for any hints as to the RBA’s future monetary policy.
- RBA Assistant Governor Christopher Kent Speaks: Thursday, 10:05. Kent is scheduled to speak at an event in Sydney. A speech which is more hawkish than expected is bullish for the Australian dollar.
- Chinese CPI: Friday, 1:30. Chinese CPI has been losing ground since October, pointing to slower activity in the Chinese economy. The key inflation index posted a gain of 2.5% in the previous reading and little change is expected, with a forecast of 2.4%.
*All times are GMT.
AUD/USD Technical Analysis
AUD/USD started the week at 0.8754 and quickly dropped to a low of 0.8730. The pair then climbed higher all week, touching a high of 0.8998, just shy of the key 0.9000 line (discussed last week). The pair closed the week at 0.8957.
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Technical lines from top to bottom:
With AUD/USD posting strong gains, we begin at higher levels:
There is resistance at 0.9442. This marked the high point of the pair in November, which saw the Aussie go on a sharp slide and drop below the 0.89 line. This is followed by resistance at 0.9368, which was an important line in mid-November.
Next, there is resistance at 0.9283. This line saw a lot of action in the months of June and July, alternating between resistance and support roles. It has provided steady resistance since November.
0.9180 follows. It is followed by the round number of 0.9000, which saw activity earlier in January and held firm this week as the Australian dollar posted sharp gains.
0.8893 has switched to a support level after providing resistance since mid-January.
0.8728 held steady early in the week as the pair dipped lower. It has some breathing room as the Australian dollar trades above the 0.89 line.
This is followed by 0.8578, which has remained intact since July 2010.
The final support level for now is 0.8432, which played a key support role in late 2009.
I am neutral on AUD/USD.
The Aussie looked golden last week, jumping over 200 points against the US dollar. Ironically, the Australian dollar gained ground after the RBA expressed its satisfaction that the currency was trading at lower levels. Will the RBA again try to “talk down†the Australian dollar? In the US, the Fed taper train is chugging along, and if next week’s releases look strong, we could well see another taper in February, which would be bullish for the greenback.
- For a broad view of all the week’s major events worldwide, read the USD outlook.
- For EUR/USD, check out the Euro to Dollar forecast.
- For the Japanese yen, read the USD/JPY forecast.
- For GBP/USD (cable), look into the British Pound forecast.
- For the Australian dollar (Aussie), check out the AUD/USDÂ .
- USD/CAD (loonie), check out the Canadian dollar.
