AUD/USD had another quiet week, posting minor gains. The pair closed at the round number of 0.9400. This week’s highlight is the RBA Monetary Policy Meeting Minutes. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
Australian numbers were a mix last week, as business sentiment improved, while Employment Change took a tumble. In the US, it was a week to forget, as key releases, notably employment and retail sales, fell short of their estimates.
[do action=”autoupdate” tag=”AUDUSDUpdate”/]AUD/USD graph with support and resistance lines on it. Click to enlarge: 
- RBA Assistant Governor Christopher Kent: Monday, 3:20. Kent will deliver remarks at an event in Sydney. The markets will be looking for a clues as to the RBA’s future monetary policy.
- RBA Monetary Policy Meeting Minutes: Tuesday, 1:30. This is the key event of the week. The minutes present a detailed record of the RBA’s previous policy meeting, which maintained the benchmark interest rate at 2.50%. Traders should treat the indicator as a market-mover which can have a significant impact on the movement of AUD/USD.
- New Motor Vehicles Sales: Tuesday, 1:30. This is an important gauge of consumer spending, as new motor vehicles are big-ticket purchases. The indicator has run into trouble, and has failed to post a strong gain in 2014. Will the indicator show some improvement in the May reading?
- CB Leading Index: Wednesday, 12:00. The index is based on 7 economic indicators, and helps analysts track the health and direction of the economy. The indicator lost ground last month, coming in at with a flat 0.0% reading. Will May bring better news?
- MI Leading Index: Wednesday, 00:30. This is considered a minor event, as the most of the data has been previously released. The index looked sluggish in April, coming in at -0.5%.
- RBA Bulletin: Thursday, 1:30. This report is published each quarter, and is unlikely to have much effect on AUD/USD, since much of the information has already been released.
*All times are GMT.
AUD/USD Technical Analysis
AUD/USD opened the week at 0.9335, which was also the low of the week. The pair then pushed above the 0.94 line, touching a high of 0.9437, as resistance at 0.9442 (discussed last week) remained intact. The pair closed the week at 0.9400.
Technical lines from top to bottom:
We begin with resistance at 0.9910, which has remained firm since last May.
0.9758 marked the start of a rally by the US dollar, 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 remained intact as the pair showed some strength. 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 continues to be busy, and was breached early in the week as the pair moved to higher ground. It has reverted to a support role, and could face pressure early in the week.
0.9283 has some breathing room following gains by the Australian dollar last week. The next line of support is 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 0.8893. AUD/USD broke above this line in February, and has posted strong gains since then.
I am neutral on AUD/USD.
The Aussie continues to trade at high levels against its US counterpart. The RBA has come out strongly against the high value of the currency, and we could see this reiterated in the minutes which will be released this week. The markets will be looking for a rebound from US numbers after a bad week, and will be closely monitoring the Federal Reserve statement.
- 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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