AUD/USD showed some movement in both directions but ended the week with slight losses. The pair closed the week at 0.9352. The upcoming week is highlighted by NAB Business Confidence and Employment Change. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
US employment numbers sparkled last week, led by Nonfarm Payrolls, which hit 288 thousand. As well, the Unemployment Rate dipped to 6.1%. In Australia, Building Approvals looked sharp but Retail Sales posted a decline.
[do action=”autoupdate” tag=”AUDUSDUpdate”/]AUD/USD graph with support and resistance lines on it. Click to enlarge: 
- AIG Construction Index: Sunday, 23:30. This minor event is unlikely to have much impact on the movement of AUD/USD. The index has posted readings below the 50-point level all year, indicative of ongoing contraction in the construction industry.
- ANZ Job Advertisements: Monday, 1:30. This indicator is an important gauge of activity on the employment front. Last month, the indicator posted a sharp decline of 5.6%, its worst showing in three years.
- NAB Business Confidence: Tuesday, 1:30. This is the first key event of the week. Business Confidence has been rising, and climbed to 7 points in the May release. Will the upswing continue in this week’s release?
- Westpac Consumer Sentiment: Wednesday, 00:30. Analysts closely follow this indicator, as increased consumer confidence usually translates into stronger consumer spending. After a steep slide in May, the indicator bounced back last month will a small gain.
- MI Inflation Expectations: Thursday, 1:00. Inflation expectations are often an accurate prediction of actual inflation, so traders should keep an eye on this release. The indicator posted a strong reading last month, with a gain of 4.0%.
- Employment Change: Thursday, 1:30. Employment Change is one of the most important economic indicators, and an unexpected reading can quickly affect the movement of AUD/USD. Last month, the indicator posted its first decline since January, coming in at -4.8 thousand. This was well off the estimate of 10.3 thousand. The markets are expecting a strong turnaround in the upcoming release, with an estimate of 12.3 thousand. The Unemployment Rate is expected to edge up to 5.9% from its current rate of 5.8%.
- Home Loans: Friday, 1:30. Home Loans is a useful gauge of activity in the housing market as well as the level of consumer confidence. The indicator has not impressed, posting only one gain in 2014. Last month’s reading of 0.0% was short of expectations, and the markets are expecting another weak reading in June, with the estimate standing at -0.4%.
*All times are GMT.
AUD/USD Technical Analysis
AUD/USD opened the week at 0.9414 and quickly hit a high of 0.9505 as resistance held at 0.9526 (discussed last week). The pair then reversed directions, dropping to a low of 0.9328 and closing at 0.9352.
Technical lines from top to bottom:
We start with resistance at 0.9910, which has remained firm since last May.
0.9757 marked the start of a rally by the US dollar back in October 2013, which saw the pair drop as low as 0.8650.
This is followed by the round number of 0.9700, which has held firm since October 2013.
0.9526 provided key resistance in November 2013 and has remained intact since that time.
0.9442 was briefly breached but recovered and is a weak resistance line. This line 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.
0.9368 was also breached as the pair lost ground before recovering. It has reverted to a resistance role and is a weak line.
0.9282 has weakened in support. There is strong support at 0.9175.
The round number of 0.9000 is a key psychological level. It has remained intact since early March.
The final support line for now is 0.8891. AUD/USD broke above this line in February, and has posted strong gains since then.
I am bullish on AUD/USD.
The US dollar could ride positive sentiment after an excellent Nonfarm Payrolls. In Australia, the RBA held rates and continues to try and talk down the Aussie, whose high value is hurting the already weak export sector.
- 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 to USD forecast.
- USD/CAD (loonie), check out the Canadian dollar.
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