The Australian dollar posted modest gains last week, as AUD/USD closed at 0.7836. This week’s key event is Private Capital Expenditure. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
The RBA minutes reiterated concern about the health of the Australian economy. In the US, the Fed minutes were dovish in stance, as policymakers raised concerns that a rate hike might hurt the US recovery. Unemployment claims dropped sharply, but manufacturing numbers disappointed.
[do action=”autoupdate” tag=”AUD/USDUpdate”/]AUD/USD graph with support and resistance lines on it. Click to enlarge:
- Construction Work Done: Wednesday, 00:30. This event is released each quarter, magnifying the impact of each reading. The indicator has posted two straight declines, and another drop is expected in Q1, with an estimate of -0.8%.
- Wage Price Index: Wednesday, 00:30. The indicator has been very steady, and little change is expected, with a forecast of 0.7%.
- Private Capital Expenditure: Thursday, 00:30. This is the key event of the week. The indicator has posted two straight gains, beating expectations each time. The markets are bracing for a decline in the Q1 release, with an estimate of -1.3%. Will the indicator surprise the markets and beat expectations?
- Private Sector Credit: Friday, 00:30. Credit levels in the private sector are closely connected to spending by businesses and consumers. The indicator has been very steady, and the forecast stands at 0.5%.
* All times are GMT.
AUD/USD Technical Analysis
AUD/USD started the week at 0.7674 and dropped to a low of 0.7740. The pair then reversed directions and touched a high of 0.7849, as resistance held firm at 0.7904 (discussed last week). The pair closed at 0.7836.
Live chart of AUD/USD: [do action=”tradingviews” pair=”AUDUSD” interval=”60″/]
Technical lines from top to bottom:
We begin with resistance at 0.8313. This line has held firm since mid-December.
0.8150 is the next resistance line.
0.7978 was an important cap in January 2007.
0.7904 held firm as the pair pushed higher late in the week.
0.7799 has switched to a support role and is a weak line.
0.7601 is the next support level.
0.7403 has held firm since May 2009. At that time, the Aussie was in the midst of a rally which saw it climb above the 0.94 line.
The final support line for now is 0.7283.
I am neutral on AUD/USD.
Although the RBA remains concerned about the economy, recent strong job releases point to an upside for growth and a stronger Aussie. In the US, recent numbers have been lukewarm of late, but the markets continue to bank on a rate hike sometime in 2015.
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Further reading:
- 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 GBP/USD (cable), look into the British Pound forecast.
- For the Japanese yen, read the USD/JPY forecast.
- For USD/CAD (loonie), check out the Canadian dollar forecast.
- For the kiwi, see the NZDUSD forecast.
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