AUD/USD Outlook – January 18-22

Posted on January 16, 2010 by Yohay
Filed Under AUD/USD Forecast | 5 Comments

Looking for the latest outlook, for the current week? Check out the section: AUD/USD Forecast

The Aussie enjoyed strong job numbers but didn’t make a breakthrough, but the Aussie remains strong. This week has some Australian figures, but Aussie traders will focus on China. Here’s an outlook for the upcoming week and an updated technical analysis for AUD/USD.

AUD/USD chart with support and resistance lines marked on it. Click to enlarge:

AUD/USD forecast

Australia’s high interest rate has a bigger change of rising, now that employment has shown strength. We’ll have to wait about two weeks for that. Let’s start the review. The technical analysis will follow:

  1. NAB Business Confidence: This index was expected to be released last week and was delayed. The exact time isn’t known at the moment. The National Australia Bank surveys about 350 business about their expectations for the near future. This index has been on the rise in the past three months, reaching a high of 19 positive points.
  2. MI Inflation Gauge: Published on Sunday at 23:30 GMT (Delayed from last week). The Melbourne Institute independently measures inflation. Last month it showed a rise of 0.3% in prices, after slower months beforehand. A small acceleration is predicted now.
  3. MI Inflation Expectations: Published on Thursday at midnight. This, second inflation figure from the Melbourne Institute, measures prices from the consumers’ perspective. Expectations have risen from 3.2% to 3.6% and are expected to edge higher this time.
  4. Westpac Consumer Sentiment: Published on Tuesday at 23:30 GMT. The Westpac Banking Corporation issues a survey of 1200 consumers which measures their confidence. This index fell in the past two months after 5 strong months of rising. A modest rise is predicted this time.
  5. Chinese GDP and Industrial Production: Published on Thursday at 2:00 GMT. . The Chinese economy, third largest in the world, has a strong impact on Australia. Many Chinese numbers are published at this time. GDP is the most important. It’s expected to rise from an annual rate of 8.9% to a double-digit 10.5% growth rate – this already caused Chinese policymakers to begin tightening measures. The second most important figure is Industrial Production. This annual number is expected to rise from 19.2% to 19.6%. Note that not only the Aussie feels the Chinese releases.
  6. Import Prices: Published on Friday at 00:30 GMT. Speaking of import and export, the quarterly import prices figure reflects this well. In the first three quarters of 2009, prices fell, expressing the global crisis. A positive number isn’t expected in Q4, but a smaller drop of 1.7% will help after bigger drops last time.

AUD/USD Technical Analysis

The Aussie began the week with a leap above last week’s highs and tested the important 0.9328 resistance line. It failed to breach this stronghold and later traded between 0.92 to to 0.9328, closing at 0.9222.

Initial support lies at 0.92, a line that I’ve modified from last week’s outlook. Looking lower, 0.9090 provides minor support. Below, 0.8950 is an important support line which served as a support and resistance line in the past.

Look lower, 0.8735 was the bottom in December began, before the current rally and provides support. Below the area of 0.8477 to 0.8520 held the Aussie back in the past, and is now a a major and far resistance line.

Looking up, if the 0.9328 line is broken, 0.9405 is the next line of resistance. It was the peak of 2009. Higher, 0.95 is a round number and played a role a long time ago.

I remain bullish on AUD/USD.

The recent employment figures strengthened the Aussie bulls. This week’s Chinese figures should help the Aussie break the current resistance line.

Update: Casey Stubbs also provides a fresh Aussie technical analysis, which I highly recommend reading.

Further reading:

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Comments

5 Responses to “AUD/USD Outlook – January 18-22”

  1. Nick Kanger on January 17th, 2010 8:25 pm

    Yohay, Whilst I’d like to agree with your post, and you and I are eternal global growth optimist longer term, and fundamentally the continued jobs and GDP growth of Australia continues to look rosy, there may be some hidden fly larvae in the its economic future. Here’s a link with some interesting stats some of your readers may wish to view.http://www.digitaljournal.com/article/284509 Also, in spite of the last great employment numbers report, and economist’s assumption that the RBA will raise rates again sooner than later, price struggled to break higher at the previous .9327 resistance. So now, we have a double top on the 4 hour, a potential right shoulder completion on the daily of an obvious head and shoulders pattern, and price at a major pivot on the weekly. Friday’s profit-taking also took price down about 100 pips to a string of multiple support and a return to a previously formed inverse right shoulder on the 60. This latter level is what traders should be cautious of going into the next week as any more news out of China on credit tightening to cool that already overheated market, could spark yet another sudden unwinding of the carry trade and start turning in favor of the USD, albeit shorter term. If so, there’s another pivot near .9170-50 where price should easily bounce. Friday’s price action also leaves the pair precariously toying with a single line trend line break potential on the 4hr. Given that info, it may be prudent to be watching for a technical retracement first, before the pair gives us positive confirmation to trade back north.A re-capture of the .9300 would lend strength to a trend resumption north as well. Great trading to you.

  2. Aud/Usd: Learning from my Mistakes : Casey Stubbs’ Blog on January 17th, 2010 11:38 pm

    [...] Read another Aud/Usd post from my friend Yohay here. [...]

  3. Patrick on January 18th, 2010 11:01 am

    Hey guys, Wow you really do spend a lot of time reading the news and trying to figure out where the price is going to end up. Do you trade from the news or do you trade from the charts? I want you to try this for a week, don’t read anyone’s analysis of where the market is going to be, and don’t listen to the news. Focus on the charts and the price movement, us fib retracements, pivot points, support and resistance, and candlestick charts. You must know how to use these tools.

    You will experience less stress and more successful trades.

  4. Yohay on January 18th, 2010 1:19 pm

    @Nick, thanks for your comment. I’ve also seen the double-top but the fundamentals seem too strong.

    @Patrick, thanks for your comment. Some traders do take your advice and focus solely on price action. I prefer to seek the causes and the stories behind the moves.

  5. AUD/USD Outlook – January 25-29 | Forex Crunch on January 23rd, 2010 8:50 pm

    [...] week, and is now close to the important 0.8950 line. I’ve modified many of the lines from last week’s outlook. I’ve added one of the new lines with the help of Mohammed Isah of FXTechstrategy. [...]

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