Category: AUD/USD Forecast

AUD/USD Forecast Sep. 29-Oct. 3



The Australian dollar continues to sag, as AUD/USD lost close to 200 points last week. The upcoming week promises to busy, with three major events on the calendar – Retail Sales, Building Approvals and Trade Balance. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

The US economy continued to post strong numbers, as New Home Sales beat the estimate and GDP sparkled with a 4.6% gain in Q2. Down under, RBA Governor Glenn Stevens said that the RBA was concerned about a housing market correction, and would consider tightening credit regulations to ease the rise in home prices. He certainly contributed to the downfall. Will the pair reach the cycle lows?

Updates:

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

AUDUSD Forecast Sep29-Oct3

  1. Private Sector Credit: Tuesday, 1:30. The change in the amount of credit issued to consumers and businesses is closely related to spending by the private sector, which is an important component of economic growth. The indicator slipped to 0.4% last month, just shy of the estimate of 0.5%. The estimate for the upcoming release stands at 0.5%. 
  2. Chinese HSBC Final Manufacturing PMI: Tuesday, 1:45. The Australian dollar is sensitive to key Chinese data, as China is Australia’s most important trading partner. The index has been in a growth mode, with three straight readings above the 50-point level. The estimate for the August reading stands at 50.5 points.
  3. AIG Manufacturing Index: Tuesday, 23:30. This PMI-like figure has only been in growth territory once this year. In July, the indicator slipped to 47.3 points, a 4-month low.
  4. Chinese Manufacturing PMI: Tuesday, 1:45. This is the second Manufacturing PMI of the week. The index has been just above the 50-point line for close to two years, pointing to slight growth in the manufacturing sector.
  5. Retail Sales: Wednesday, 1:30. Retail Sales is the primary gauge of consumer spending. The indicator posted a gain of 0.4% last month, matching the forecast. An identical reading is expected in the August release.
  6. Commodity Prices: Wednesday, 6:30. Year over year, commodity prices have been falling since early 2012. The indicator posted another sharp decline last month, coming in at -11.5%. The Australian economy leans heavily on commodity exports, especially metals. 
  7. HIA New Home Sales: Thursday, Tentative. The indicator looked awful last month, posting a drop of 5.7%. This was the sharpest decline we’ve since July 2012. The markets will be hoping for some improvement in the August release.
  8. Building Approvals: Thursday, 1:30. This key indicator tends to be volatile, so market estimates are often way off the mark, leading to some movement from AUD/USD. The indicator came in at 2.5% last month, and the estimate for the upcoming release stands at 1.1%. 
  9. Trade Balance: Thursday, 1:30. While Australia has recurring deficits in the current account, the trade balance shifts between surpluses and deficits. In August, Australia recorded a deficit of 1.36 billion A$, better than the estimate of a deficit of 1.77 billion A$. The markets are expecting a smaller deficit of 0.78 billion A$ in August.
  10. RBA Annual Report: Thursday, 5:15. The RBA’s annual report provides a summary of the central bank’s operations and financial statements. It is a minor event, unlikely to affect the direction of AUD/USD.
  11. AIG Services Index: Thursday, 23:30. The index continues to point to contraction in the services sector, with only one reading above 50 since January 2012. The past reading came in at 49.4 points, so the key 50-point level is within striking distance.

* All times are GMT.

AUD/USD Technical Analysis

AUD/USD started the week at 0.8939 and quickly touched the week’s high of 0.8950. It was all downhill from there, as the pair tumbled to 0.8748, breaking below support at 0.8763 (discussed last week). AUD/USD closed the week at 0.8755.

Live chart of AUD/USD:


Technical lines from top to bottom:

With the Aussie falling sharply last week, we start at lower levels:

There is resistance at 0.9270. This line supported the pair in August but reverted to resistance in September with the Australian dollar sustaining steep losses.

0.9175 remains a strong resistance line.

The round number of 0.9000 has some breathing room as the pair dropped sharply last week.

0.8891 was easily breached and has switched to a resistance role.

0.8750 is an immediate support line. This line was breached on Friday but recovered. It could see further action early in the week.

0.8660 is a key support level. This line has remained intact since January.

0.8550 has held firm since December 2007.

0.8316 is the final support level for now. This line marked the start low point of a US dollar rally which saw the greenback climb above the 1.10 level.

I am bearish on AUD/USD.

The shaky Aussie finds itself at its lowest levels since February, and could lose more ground to the greenback. US numbers have looked solid, and the markets are expecting a strong NFP late in the week. With the Fed set to wean the economy off QE in October, there will be more focus on the timing of an interest rate hike.

More: Are the AUD and NZD currencies on path for more devaluation?

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AUD/USD Forecast Sep. 22-26

AUD/USD Forecast Sep. 22-26

AUD/USD continued its losing ways last week, losing close to 100 points, as the pair closed at 0.8922. AUD/USD has now slipped to its lowest level since March. It’s another quiet week on the release front, highlighted by a speech by RBA Governor Glenn Stevens in Melbourne. Here is an outlook on the major market-movers and an

AUD/USD Forecast Sep. 15-19

AUD/USD Forecast Sep. 15-19

AUD/USD suffered its worst week in over a year, losing more than 300 points. The pair closed the week slightly above the 0.90 level. The upcoming week is quiet, highlighted by the RBA minutes. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD. Australian business and consumer confidence indicators softened,

AUD/USD Forecast Sep. 8-12

AUD/USD Forecast Sep. 8-12

AUD/USD posted small gains over the week, closing at 0.9366. This week’s key releases are NAB Business Confidence and Employment Change. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD. Australian releases met expectations for the most part, and the RBA didn’t adjust rates but took a swipe at the high

AUD/USD Forecast Sep. 1-5

AUD/USD Forecast Sep. 1-5

AUD/USD showed a lot of strength, resisting the greenback and eventually moving higher. Can this continue without a response from the RBA? The rate decision and GDP are the big events in a very busy week that consists of no less than 16 indicators . Here is an outlook on the major market-movers and an updated technical analysis

AUD/USD Forecast Aug. 25-29

AUD/USD Forecast Aug. 25-29

AUD/USD showed some downward movement, but ended the week unchanged, as the pair closed at 0.9315. This week’s major event is Private Capital Expenditure. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD. The Aussie dipped after RBA Governor Glenn Stevens sounded somewhat downbeat, as he stated that in the present economic environment, the economy needed

AUD/USD Forecast Aug. 18-22

AUD/USD Forecast Aug. 18-22

For a second straight week, AUD/USD showed little movement, as the pair closed at 0.9316. This week’s major events focus on the RBA. The central bank will release its Monetary Policy Meeting Minutes and Governor Glen Stevens is scheduled to testify before a parliamentary committee. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

AUD/USD Forecast Aug. 11-15

AUD/USD Forecast Aug. 11-15

AUD/USD was almost unchanged last week, as the pair closed at 0.9271. This week’s highlight is NAB Business Confidence. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD. Australian Retail Sales were strong, but dismal employment data weighed on the Aussie, which dipped below the 0.93 level. In the US, ISM Non-Manufacturing

AUD/USD Forecast Aug. 4-8

AUD/USD Forecast Aug. 4-8

AUD/USD lost close to a cent last week, as the pair closed just above the 0.93 level. This week’s highlights are Retail Sales and Employment Change. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD. Australian Building Approvals and PPI both posted declines in June, hurting the Australian dollar. In the

AUD/USD Forecast July 28-Aug. 1

AUD/USD Forecast July 28-Aug. 1

AUD/USD was unchanged for a third consecutive week, as the pair closed at 0.9384. This week’s highlights are Building Approvals and PPI. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD. Australian releases were uneventful last week, as CPI matched the forecast. In the US, housing, employment and manufacturing data was excellent, but the