AUD/USD Forecast Jan. 2-6 2017

AUD/USD ended the year quietly, as the pair was unchanged last week, closing at 0.7178. There are six events this week. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

The week between Christmas and New Year’s was marked by thin volumes and the AUD/USD ended the week unchanged. In the US, In the US, consumer confidence jumped and unemployment claims rebounded, beating expectations. There were no major Australian events last week.

Updates:

AUD/USD daily graph with support and resistance lines on it. Click to enlarge:

1. Chinese Manufacturing PMI: Sunday, 1:00. The Australian dollar is sensitive to key Chinese indicators, as the Asian giant is Australia’s number one trading partner. The indicator is expected to remain almost unchanged in December, at 51.6 points.
2. AIG Manufacturing Index: Monday, 22:30. This indicator continues to move upwards and climbed to 54.2 in November, its strongest reading since June. Will the upward trend continue in the December report?
3. Chinese Caixin Manufacturing PMI: Tuesday, 1:45. The PMI dipped to 50.9 in November, matching the forecast. The indicator is expected to remain at this level in December.
4. Commodity Prices: Tuesday, 5:30. Commodity Prices continue to move higher, as the November reading surged by 32.1%. Will the upward trend continue in December?
5. AIG Services Index: Wednesday, 22:30. The index edged up to 51.1 points in November, pointing to a stagnant services sector. The markets will be hoping for a stronger reading in December.
6. Trade Balance: Friday, 00:30. Australia’s trade deficit widened to A$1.54 billion in October, much higher than the estimate of a deficit of A$0.72 billion. Better news is expected in the November release, with the deficit projected to drop to A$0.55 billion.

AUD/USD Technical Analysis

AUD/USD opened the week at 0.7175 and touched a low of 0.7161. The pair then reversed directions and climbed to a high of 0.7247, testing resistance at 0.7223 (discussed last week). AUD/USD was unable to consolidate at this level and closed the week at 0.7178.