Forex Crunch » AUD/USD Forecast

AUD/USD Outlook – July 26-30

Yohay — Sat, 24 Jul 2010 18:07:26 +0000

Key inflation figures will rock the Aussie in the upcoming week. Here’s an outlook for the Australian events and an updated technical analysis for AUD/USD.

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

In a rather calm week, the Aussie rose, enjoying the basic advantages of the economy, with the great employment situation shining. This week, the focus will be on the next rate decision:

PPI: Published on Monday at 1:30 GMT. Producer prices, like consumer prices, are released only once per quarter in Australia, making it a very important release. In the first quarter, prices surprised with a jump of 1%, significantly higher than expected. The recent rise in commodity prices will probably trigger a rise of 1.5% in producer prices this quarter.
CB Leading Index: Published on Tuesday at 1:00 GMT. The Conference Board creates this index out of 7 economic indicators with many of them already released. Nevertheless, the release still impacts the Aussie, especially as it’s released as the week begins. After two months of small rises (0.3% and 0.1%), it’s now expected to remain unchanged.
CPI: Published on Wednesday at 1:30 GMT. This major event will set the tone for the next rate decision, and will rock the Aussie. Q1 saw consumer prices rise by 0.9%, exactly as expected. This triggered the recent pauses in rate hikes. This time, inflation is expected to be similar, with a rise of 1%. A surprising jump will force a rate hike in the near future. Also note the Trimmed Mean CPI (Core CPI in other countries), which is expected to rise by 0.8%, similar to other countries.
Private Sector Credit: Published on Monday at 1:30 GMT. More credit in the private sector means more economic activity. Credit has been expanding in the past 7 months, with a strong 0.5% rise last month. Another expansion is expected this time, but it will probably be more modest – 0.4%.

AUD/USD Technical Analysis

The Aussie continued falling at the beginning of the new week, including a Sunday gap. This gap, at the 0.8660 line, was closed quickly and the pair began rising, jumping above 0.8770 and struggling at 0.8870. But also this line was breached and the pair bounced only upon approaching the round number of 0.90. All in all, the pair made almost 200 pips in the past week.

Note that some of the lines have changed since last week’s outlook. The Aussie is now bound between 0.8870 which turned into a strong line of support, and 0.90, which is a round number which was a swing low in March.

Above, 0.9135 served as a strong support line when the pair was trading higher, and works as a resistance line. Higher, 0.9327 capped the pair many times in 2009 and at the beginning of 2010, and works as a strong line of resistance. Even higher, 0.9405, the 2009 high is the last line of resistance for now.

Looking down below 0.8870, the 0.8770 line provides minor support, and it’s followed by 0.8660, the gap line which also supported the pair beforehand.

Below, we find the 0.8567 line, which worked as a decisive line in the past, mostly as a support line. Below, 0.85000 is another minor line, followed by 0.8316, a double bottom at the beginning of July. The year-to-date low of 0.8066 is the last line.

I remain bullish on the Aussie.

The strong Australian fundamentals, such as the booming job market, will probably receive a boost from inflation figures, triggering another rate hike and more gains for AUD/USD.

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/Dollar Forecast.
For GBP/USD (cable), look into the British Pound forecast.
For the New Zealand dollar (kiwi), read the NZD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free..

AUD/USD Outlook – July 19-23

Yohay — Sat, 17 Jul 2010 17:31:06 +0000

Four events await Aussie traders in the upcoming week. Here’s an outlook for these events and an updated technical analysis for AUD/USD.

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

Australia’s home loans finally rose. This positive figure joined the employment figures we’ve seen beforehand and boosted the Aussie.

Monetary Policy Meeting Minutes: Published on Tuesday at 1:30 GMT. We’ve seen two consecutive months of pauses in rate hikes, something that didn’t happen for quite a while. The minutes will show us what the different members think of state of the economy, and more importantly, when they see another hike.
Glenn Stevens talks: Starts speaking on Tuesday at 3:05 GMT. Soon after the release of the minutes, the head of the RBA will give a speech titled “Some Long-Run Effects of the Financial Crisis”. His words almost always rock the Aussie, and this one in Sydney will probably be no different.
MI Leading Index: Published on Wednesday at 00:30 GMT. The Melbourne Institute composes this index out of 9 economic indicators, that some of them have already been released. Nevertheless, the release has an impact on the currency. Last month’s unchanged figure will probably be followed with a rise this time.
Import Prices: Published on Friday at 1:30 GMT. After a full year of drops in import prices, this quarterly index finally rose in Q1, by 0.3%, exceeding expectations. Another rise is expected this time. A rise in import prices has a direct impact on inflation.

AUD/USD Technical Analysis

After tight range trading between 0.8660 and 0.8770, AUD/USD made a break and peaked at 0.8870. It then collapsed and closed at 0.8660, which is turns into a pivotal line. Note that some of the lines have changed since last week’s outlook.

From the close at the support / resistance line, the Aussie can go back up and make another attempt towards 0.8770, which provides immediate resistance. Stronger resistance is found at 0.8915 which worked as a support and resistance line many times in the past.

Higher, the round number of 0.90 is the next resistance line, and it’s followed by 0.9135 which served as a support line in April. Even higher, the next significant resistance line is 0.9327, which was a resistance line during many months.

Looking down, 0.8567 continues to be an important line of support. It worked as such when the Aussie was trading higher last year, and worked as a resistance line after the pair plunged. Lower, 0.8500 is a minor line of support. Also 0.8390 is a minor line, and it’s followed by 0.8315, which was a double bottom recently.

Even lower, there are many lines. 0.8240 is a minor line, and it’s followed by the year-to-date low of 0.8066.

I remain bullish on the Aussie.

The Australian fundamentals, including the strong job market and also the recovering housing sector, continue to shine on Australia.

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/Dollar Forecast.
For GBP/USD (cable), look into the British Pound forecast.
For the New Zealand dollar (kiwi), read the NZD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free..

AUD/USD Outlook – July 12-16

Yohay — Sun, 11 Jul 2010 01:30:08 +0000

A variety of Australian releases and one Chinese release will move the Aussie in the upcoming week. Here’s an outlook for the Australian events, and an updated technical analysis for AUD/USD, now in higher ground.

AUD/USD daily chart with support and resistance lines. Click to enlarge:

The Australian economy enjoys a bubbling job market. The fresh figures came out significantly better than expected, and this gave a big boost to AUD/USD. Will this continue? Let’s start:

Home Loans: Published on Monday at 1:30 GMT. This important housing indicator reflects the impact of the rate hikes – less people are taking loans due to the high interest rate. After 7 consecutive months of drops, the number of loans is finally expected to rise, but at a very modest scale – 0.1%. This will provide a shaky start for AUD/USD at the beginning of the new week.
NAB Business Confidence: Published on Tuesday at 1:30 GMT. National Australia Bank has shown a significant drop in business confidence in the past three months – a drop from 19 to 5 points, although still positive, still showing optimism. This survey of 350 businesses will probably show another drop this time.
Westpac Consumer Sentiment: Published on Wednesday at 1:30 GMT. Westpac’s survey deals with the consumers. 1,200 consumers have shown less confidence in the past three months, with sharp drops of 5.7% and 7% in the past two months. This time, a small rise is expected.
MI Inflation Expectations: Published on Thursday at 1:30 GMT. The Melbourne Institute fills in for the gap created by the government, that publishes the CPI only once per quarter. According to MI, inflation is now weaker – 3.4% in comparison to a strong 4.1% figure three months ago. A drop under 3% will weaken the Aussie.
New Motor Vehicle Sales: Published on Thursday at 1:30 GMT. Vehicle sales are a strong indicator of consumption, but this indicator tends to be very volatile. After a rise of 8.4% two months ago, a drop of 3.2% was seen last month. A small rise is predicted now.
Chinese GDP: Published on Thursday at 2:00 GMT. Australia’s main partner continued to grow rapidly while the West suffered from economic contraction. In the past two quarters, the growth rate return to double digits: 10.5% in Q4 of 2009 and 11.9% in Q1. China releases the figures for Q2 quite early. They’re expected to show a growth rate of 10.5%, still very strong. The Aussie will gain from a stronger rise.

AUD/USD Technical Analysis

The Aussie had a bad start to the week, testing the 0.8315 support line, which it also tested in the previous week. It then began a rally during which it broke many resistance lines and eventually bounced at the resistance line 0f 0.88.

The Aussie is now in a tight range between 0.8735 (December’s low) and the round number of 0.88 which it just tested. Note that some lines have changed since last week’s outlook.

Below 0.8735, the next support line is 0.8567, which served as a strong support line during many months in the past year, and recently worked as a pivotal line. Below, 0.8505 is a minor support line.

Lower, 0.8390 worked as a minor support line in recent months. It’s followed by 0.8315, which was a double bottom in the past two weeks – this makes it a strong line of support now.

Even lower, 0.8240 is an old line of resistance that now serves as a support line, and its followed by the year-to-date low of 0.8066.

Looking up above 0.88, the next line of resistance is the round number of 0.90, which was tested in March and in May. Higher, 0.9327 is a very strong line of resistance which held the Aussie back lots of times in the past year.

Even higher, 0.94 was the 2009 high and its followed by the round number of 0.95, but they’re still far.

I remain bullish on the Aussie.

Once again, we’ve seen that the Australia is doing great – the economy gained lots of jobs. We’ll now probably see that Australia’s main trade partner, China, is also doing well, and this is likely to provide further strength for the Aussie.

Further reading:

For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
For EUR/USD, check out the Euro/Dollar Forecast.
For GBP/USD (cable), look into the British Pound forecast.
For the New Zealand dollar (kiwi), read the NZD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.

Ready to connect with real Forex traders? Currensee is the first Forex trading social network.

AUD/USD Outlook – July 5-9

Yohay — Tue, 06 Jul 2010 00:47:52 +0000

This is a very busy week for Aussie traders: a rate decision and employment figures will rock the Aussie, alongside other events. Here’s an outlook for these events as well as an updated technical analysis for AUD/USD.

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

The Chinese move on the yuan, although doubted by many, still has a positive impact on the Aussie. Also one Chinese event is expected this week. Let’s start:

AIG Services Index: Published on Sunday at 23:30 GMT. The Australia Industry Group has released a very disappointing number last time – 47.5 points. A figure below 50 points means economic contraction – the probably outcome of many rate hikes. It’s now expected to stay at the same zone. Actual: 48.8
ANZ Job Advertisements: Published on Monday at 1:30 GMT. The amount of jobs advertised in the media proves to be an excellent gauge for the official employment figures later in the week. A more modest rise than 4.3% is expected this time. Actual: 2.7%.
Trade Balance: Published on Tuesday at 1:30 GMT. A great surprise was seen last month, as Australia saw a first surplus in over a year. The 130 million dollar surplus will probably be followed by a bigger one this time. A return to a deficit will hurt the Aussie.
Rate decision: Published on Tuesday at 4:30 GMT. The six rate hikes that Australia already saw in this tightening cycle already had an impact in taming inflation, especially in the housing market. After last month’s pause, another pause will probably be seen now, with Glenn Stevens leaving the Cash Rate at 4.50%. Hints about future policy will probably be seen in the RBA Rate Statement.
AIG Construction Index: Published on Tuesday at 23:30 GMT. This second PMI-like release from AIG dipped last month to 53.2 points, but was still good, standing above 50 points. Another slide is predicted this time, but it’s likely to remain above 50.
Westpac Consumer Sentiment: Published on Wednesday at 00:30 GMT. Following three months of big drops in consumer sentiment, including 5.7% and 7% drops, this survey of 1200 people is expected to rise this time, but not a significant scale.
Employment data: Published on Thursday at 1:30 GMT. Last month was great once again, with a rise of almost 27K in jobs (employment change). Also the unemployment rate was superb, dropping unexpectedly from 5.4% to 5.2%. This time, both figures aren’t expected to change significantly.
Chinese Trade Balance: Published on Friday. Following the revaluation of the yuan, Australia’s main trade partner could import more Australian goods. We’ll now see if the Chinese surplus will continue growing – meaning there’s more room for consumption of goods from Australia.

AUD/USD Technical Analysis

The Aussie fell during the first part of week and made a false break below 0.8360. From there it recovered to the 0.8477 area and bounced off this line as well.

Note that some of the lines have changed since last week’s outlook. AUD/USD is now supported by 0.8360. A break below this line will find support at 0.8275, which was a support line during June.

Lower, the year-to-date low of 0.8066 is the next strong line of support that is still far at the moment. Even lower, 0.77 is the next line.

Looking up above 0.8477, we reach 0.8567 continues to be an important pivotal line. A break above this line will mark a run upwards.

Higher, 0.8735, which was the low line in December, is the next line of support. It’s followed by the round number of 0.88 and then the round number of 0.90. Both were important lines.

I turn neutral on AUD/USD.

Last week’s drop in building approval and weak retail sales cast a shadow over the Aussie’s strength. Together with the uncertainty of the Chinese move, the pair will probably see some range trading. The unemployment figures can supply the fuel for a long term rally, but this isn’t expected this week.

Further reading:

For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
For EUR/USD, check out the Euro/Dollar Forecast.
For GBP/USD (cable), look into the British Pound forecast.
For the Australian dollar (Aussie), check out the AUD/USD forecast.
For the New Zealand dollar (kiwi), read the NZD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.

Ready to connect with real Forex traders? Currensee is the first Forex trading social network.

AUD/USD Outlook – June 28 – July 2

Yohay — Sat, 26 Jun 2010 16:25:41 +0000

Retail Sales as well as building approvals are the highlights in a busy Australian week. Will the Aussie continue north? Here’s an outlook for the Australian events and an updated technical analysis for AUD/USD.

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

The Chinese move on the yuan is great for Australia, that exports commodities to China. With a stronger yuan, the Chinese can buy more. As the dust settled from this move, the political problems in Australia hurt the Aussie. With the new Prime Minister sworn in, the focus returns to fundamentals:

HIA New Home Sales: Publication time unknown at the moment. The Housing Industry Association showed a bit leap in prices last month – 6.2%. This comes despite the rate hikes that partially cooled the Australian housing sector. A smaller rise is expected this time.
MI Inflation Gauge: Published on Tuesday at 00:30 GMT. The official inflation figures are released only once a quarter. So, this unofficial release from the Melbourne Institute tends to moves the Aussie. After rises of 0.4% or 0.5% in recent months, a weaker rise in prices is predicted this time.
Private Sector Credit: Published on Wednesday at 1:30 GMT. More lending means more economic activity, but last month’s small rise of 0.2% was quite disappointing for the Aussie. This followed 4 stronger months. A return to higher growth rates will probably be reported by the RBA this time.
AIG Manufacturing Index: Published on Wednesday at 23:30 GMT. The Australia Industry Group publishes a PMI-like indicator that has been above 50 in the past 5 months. This means expectations for economic expansion. The drop from the high 59.8 points to 56.3 last month is expected to be followed by a stable number this time.
Chinese Manufacturing PMI: Published on Thursday at 1:00 GMT. China is Australia’s main trade partner. Growth in Chinese manufacturing translates into more imports from Australia. After peaking at 55.7 points, this Chinese indicator fell to 53.9 points this time. A rise is expected this time.
Retail Sales: Published on Thursday at 1:30 GMT. This major consumer-related indicator rose by 0.6% last month, showing confidence for a second month in a row, despite the rate hikes. A smaller rise is expected this time.
Commodity Prices: Published on Thursday at 6:30 GMT. Australia’s commodity-oriented economy enjoyed a recovery in commodity prices in June. This will be reflected in this indicator that is expected to show a year-over-year growth rate of over 50%, boosting the Aussie.
Building Approvals: Published on Friday at 1:30 GMT. This indicator is very volatile, and tends to have a strong impact on the Aussie. A drop of almost 15% was reported in approvals last month, but this was merely a correction for a 17% rise beforehand. A rise in approvals will empower the Aussie.

AUD/USD Technical Analysis

The Aussie’s crazy week began with a temporary jump above 0.8735 and then 0.88, but this changed quickly. The pair deteriorated quickly and dipped below 0.86 before recovering and settling slightly higher than last week – at 0.8741. Note that most lines haven’t changed since last week’s outlook.

Looking up, 0.88 continues to be a minor line of resistance, and the break above it was false. Higher, 0.90 is a round psychological number and also was a swing low in March.

Higher, 0.9135 was a very strong line of support when the pair was trading higher, and now works as resistance. The next important line far above is 0.9327, which was a strong line of resistance many times in the past.

Looking down, immediate support is found at 0.8735, which was December’s low, and worked as a line of resistance in the previous week. Lower, 0.8360 was a pivotal line a few weeks ago.

Lower, 0.8240 was a strong resistance line in 2009 and worked when the pair was trading lower recently. Below, the year-to-date low of 0.8066 provides strong support. That’s quite far now.

I remain bullish on the Aussie.

The political crisis that rocked the Aussie is over, with a new Prime Minister, Julia Gillard, quickly assuming office. With the revaluation of the Chinese yuan, a high interest rate and strong economy, the Australian dollar continues to have good reasons to rise.

Further reading:

For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
For EUR/USD, check out the Euro/Dollar Forecast.
For GBP/USD (cable), look into the British Pound forecast.
For the New Zealand dollar (kiwi), read the NZD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.

Ready to connect with real Forex traders? Currensee is the first Forex trading social network.

AUD/USD Outlook – June 21-25

Yohay — Sat, 19 Jun 2010 16:38:46 +0000

The Aussie enjoyed a positive week and began struggling with higher barriers. Here’s an outlook for the events that will move the Aussie and an updated technical analysis for AUD/USD.

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

The meeting minutes showed that the central bank is worried about European developments, but seems confident about the Australian economy. Indeed, the Aussie rose quite nicely in the past week, and took dips only on bad European news. OK, let’s start:

New Motor Vehicle Sales: Published on Monday at 1:30 GMT. With Australia’s great outback, vehicle sales are significant for the economy. Last month’s leap of 8.4% was strongly felt in the currency. A small drop is expected this time, as this indicator is quite volatile.
CB Leading Index: Published on Wednesday at 1:30 GMT. Most of the 7 economic indicators that build this indicator have already been released. Nevertheless, this still has an impact on the Aussie. After two months of drops, the leading index recovered last month and rose by 0.3%. Given the great improvement in employment, another rise can be expected now.

AUD/USD Technical Analysis

The Aussie made a significant breakout in the past week. After a struggle, it passed the critical 0.8567 resistance line and made a failed attempt for the next line – 0.8735, which was December’s low. The pair is currently bound between these two lines.

Note that some higher lines were added on last week’s outlook. Above 0.8735, 0.88 is the next resistance line, being a swing low a few months ago. Higher, 0.90, is a round number and also served as a support line.

Higher, also 0.9135 was a strong support line and now works as resistance. It’s followed by the minor resistance line of 0.9250 and then by a very strong line – 0.9327, which worked as a resistance line many times in the past. The year-to-date high of 0.9366 is the last line.

Looking down below 0.8567, 0.8360 provides support. This was a pivotal line in the past weeks. Lower, 0.8240 was also a significant line in recent weeks as well as last summer. It’s followed by the year-to-date low of 0.8066.

I remain bullish on the Aussie.

The Aussie has all the reasons to rise, with an excellent job market, a high interest rate, growing economy and now also record high levels of gold.

Further reading:

For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
For EUR/USD, check out the Euro/Dollar Forecast.
For GBP/USD (cable), look into the British Pound forecast.
For the New Zealand dollar (kiwi), read the NZD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.

Ready to connect with real Forex traders? Currensee is the first Forex trading social network.

AUD/USD Outlook – June 14-18

Yohay — Sat, 12 Jun 2010 16:27:47 +0000

After a busy week, the Aussie closed the week significantly higher. The upcoming week consists of the meeting minutes from the last rate decision and few other events. Here’s an outlook for the Australian events and an updated technical analysis for AUD/USD.

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

Australia continues to enjoy a steaming job market, as seen once again this week, with the surprising drop in the unemployment rate. Will this push the RBA to another rate hike? Let’s start:

Monetary Policy Meeting Minutes: Published on Tuesday at 1:30 GMT. In their last rate decision, Glenn Stevens and his colleagues from the RBA decided to pause, and left the interest rate unchanged at 4.5%. This move was expected, but the questions regarding the next moves remained unchanged. The protocols will enable us to see where the wind is blowing.
Ric Battellino talks: The RBA Deputy Governor will begin talking on Tuesday at 3:20 at a conference in Sydney. Despite the rate hikes, the economy is still showing strong growth. Battellino might speak his mind about the situation, and possibly hint about further moves by the RBA.
MI Leading Index: Published on Wednesday at 00:30 GMT. The Melbourne Institute bases this index on 9 indicators. While some of the indicators have already been published, the release by this private establishment still tends to rock the Aussie. Last month saw a jump of 0.9%, significantly higher than previous months. We’ll probably see another strong rise this time.
Housing Starts: Published on Wednesday at 1:30 GMT. This is a lagging indicator, released a long time after related housing figures have already been released (building approvals, home loans), but it still tends to have an impact, as it’s a quarterly release. Q3 and Q4 of 2009 were very strong, with big jumps in housing starts. The rise of 15.1% seen last month won’t return this time, but housing starts are still expected to grow.

AUD/USD Technical Analysis

The Aussie continued the drop that followed the Non-Farm Payrolls and tested the critical 0.8066 line once again. After another bounce, the road up was paved – it surged above 0.8240, struggled temporarily around 0.8360 and finally closed just under 0.85.

The Aussie is now bound between 0.8360, a new line that didn’t appear on last week’s outlook, and 0.8567, which is a very strong line of resistance. 0.8567 is a pivotal line that worked as both support and resistance, during the past year.

Further up, 0.8735, which was the low line in December, is the next minor line of resistance. It’s followed by the round number of 0.88, which was support line several times in the past.

Even higher, 0.90 is the next round number that provided support, and it’s followed by 0.9135, the lower border of a high range that AUD/USD was in April.

Looking down below 0.8360, the next line is 0.8240, which worked as a line of resistance about a year ago, and it’s followed by 0.8066, which was tested just this week, and was a triple bottom.

Below the year-to-date low of 0.8066, there are important lines at 0.77 and 0.7450, but they are quite far at the moment.

I continue being bullish on the Aussie.

As I wrote last week, the Australian fundamentals won over the European worries, and the Aussie enjoyed a 300+ pip rally. This trend should continue, with 0.8567 being a critical line of resistance.

Further reading:

For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
For the Euro/Dollar, look into the EUR USD Forecast.
For the British Pound (sterling), read the GBP/USD forecast.
For the New Zealand dollar (kiwi), read the NZD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

AUD/USD Outlook – June 7-11

Yohay — Sat, 05 Jun 2010 16:00:47 +0000

After another week of tense range trading, another busy week expects the Aussie, with employment data being the climax. Here’s an outlook for the Australian events, and an updated technical analysis for AUD/USD.

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

The past week saw two important releases: GDP and the rate decision that were OK. The Aussie didn’t fully enjoy them. Will employment numbers boost the currency? Let’s see:

AIG Construction Index: Published on Sunday at 23:30 GMT. This gauge for the housing sector from the Australian Industry Group jumped back above 50 points last month, indicating economic expansion. From 55.8 points last month, it’s expected to edge down.
ANZ Job Advertisements: Published on Monday at 1:30 GMT. This is often regarded as an indicator towards the official employment figures due later in the week. The amount of jobs advertised in newspapers unexpectedly fell by 1.2% last month, hurting the Aussie. A small rise is predicted this time.
Westpac Consumer Sentiment: Published on Wednesday at 1:30 GMT. This survey of 1200 consumers already reflected the recent turmoil last month, with a drop of 7%. The upcoming release should show a small correction – a small rise. This indicator tends to move the Aussie, due to its freshness.
Home Loans: Published on Wednesday at 1:30 GMT. The amount of loans given towards buying homes dropped in the past 6 months, disappointing the Aussie over and over again. This is a direct result of the tightening policy by the RBA – higher interest rates make mortgages less attractive. Another drop is due this time – 1.9%.
NAB Business Confidence: Published on Wednesday at 1:30 GMT and overshadowed by home loans. 550 businesses are polled for National Australia Bank’s survey. This important survey is already off the peak of 19 points it scored two months ago. From 13 points, another small drop is expected now.
MI Inflation Expectations: Published on Thursday at 1:00 GMT. The Australian authorities publish the CPI only once a quarter, so this indicator by the Melbourne Institute, fill the gap. After leaping to 4.1%, expectations fell back to more normal levels – 3.6%, also a result of the rate hikes. It’s expected to remain almost unchanged this time.
Employment data: Published on Thursday at 1:30 GMT. The best is kept for last. Last month’s employment figures surprised with a leap of 33,700 jobs, about 50% more than expected. But now, only half of this gain is predicted – 16,100. On the other hand, the unemployment rate ticked up to 5.4% – a figure which isn’t expected to change this time. Any outcome will rock the Aussie.

AUD/USD Technical Analysis

The Aussie traded between the0.8240 support line and 0.85 during most of the week. On Friday the pair broke under 0.8240 but the break wasn’t convincing – the pair closed at 0.8231.

Most support and resistance lines haven’t changed since last week’s outlook, but the Aussie is positioned in a sensitive spot. The opening of the new week is critical for the Aussie. If the pair bounces back above 0.8240, the drop can be disregarded. Otherwise, it will open the road to lower levels.

The next line of support is at 0.8066, the area where the Aussie fell to in the big collapse at the beginning of May. Below, minor support is found at 0.7860, which was an area of resistance about a year ago.

Below, the 0.77 line provides strong support – the Aussie fell off from this line at the height of the financial crisis. It fell to 0.7450, which is the next line of support.

Looking up, 0.8477 is still a minor line of resistance, serving as such about 9 months ago. The stronger line of resistance is at 0.8567, which worked as a convincing line of support and resistance recently.

Further up the road, 0.88 worked as a support line, and now serves as a line of resistance. Higher, 0.90 is a round number and also provided support when the pair was trading higher.

I remain bullish on the Aussie.

The strong fundamentals that we’ve seen last week, and the employment figures which are usually good, should supply the fuel the Aussie needs to overcome the risk aversive trading that is caused by trouble overseas.

Further reading:

For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
For the Euro/Dollar, look into the EUR USD Forecast.
For the British Pound (sterling), read the GBP/USD forecast.
For the New Zealand dollar (kiwi), read the NZD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

AUD/USD Outlook – May 31 – June 4

Yohay — Sat, 29 May 2010 15:04:47 +0000

A very busy week expects Aussie traders: a rate decision, the GDP release and 11 more events will shake the Australian dollar. Here’s an outlook for the Australian events and an updated technical analysis for AUD/USD.

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

The Australian dollar enjoyed a significant recovery this week, finally dropping the Euro’s weight on the global markets. The crowded Australian calendar means that this trend will continue. Let’s start:

HIA New Home Sales: Publication time unknown at the moment. Australia’s Housing Industry Association finally provided a stable change in the number of newly constructed homes last month. The rise of 0.9% followed a drop of 5.2% and a rise of 9.5% beforehand. The forecast is for a small rise that will help the Aussie.
MI Inflation Gauge: Published on Monday at 12:30 GMT. Melbourne Institute’s inflation gauge completes the gap that the government leaves by releasing the CPI figures only once per quarter. Prices have risen by 0.4% last month, and this modest rise will probably be repeated.
Current Account: Published on Monday at 1:30 GMT. Although this figure lags the related trade balance release, this quarterly figure still has a strong impact on currencies. Australia’s deficit rose to 17.5 billion in Q4, and is now expected to show a smaller deficit of 16.4 billion.
Private Sector Credit: Published on Monday at 1:30 GMT. Businesses and consumers increased their credit by 0.5% last month, a higher rate than in previous months, indicating economic expansion. Forecasts stand on a 0.5% rise.
AIG Manufacturing Index: Published on Monday at 23:30 GMT. The Australia Industry Group showed a big improvement in the manufacturing sector last month – this PMI-like figure rose to 59.8, a level unseen since the beginning of the global crisis. The 200 manufacturers that are surveyed for this indicator will probably show a drop, but a figure above 50 – more economic expansion.
Chinese Manufacturing PMI: Published on Tuesday at 1:00 GMT. Australia’s main trade partner is expected to show a similar score this time – 55.5 points. Any leap or drop in this major Chinese indicator will rock the Aussie as well.
Retail Sales: Published on Tuesday at 1:30 GMT. After a big drop two months ago, consumers increased their spending once again – sales volume rose by 0.3% and is expected to rise by the same scale once again.
Building Approvals: Published on Tuesday at 1:30 GMT and overshadowed by retail sales. After two months of big drops, this major housing sector gauge leaped by 15.3%. This volatile indicator will probably show another correction – to the downside this time, with a drop of 4.9%.
Rate decision: Published on Tuesday at 4:30 GMT. After two surprising rate hikes, Glenn Stevens’ RBA is expected to pause before another rate hike. The hikes succeeded in cooling down the housing sector, and the global turmoil in May create a consensus that Australia’s Cash Rate will remain at 4.5%. There are no other forecasts for this Australian rate decision.
Commodity Prices: Published on Tuesday at 6:30 GMT. Australia’s commodity oriented economy saw a big year-over-year jump in prices last month – 29.4%. It’s hard to tell where prices will go this time, making the release more important this time. On one hand, gold reached new highs, but oil prices slumped.
GDP: Published on Wednesday at 1:30 GMT. The Australian economy, that never experienced an official recession, is expected to show slower growth in Q1 – only 0.6%, after a strong 0.9% rise last time. This major indicator will shake the markets, no matter the outcome.
AIG Services Index: Published on Thursday at 23:30 GMT. The second release from AIG is different. Contrary to the manufacturing sector, Australia’s services sector returned to expansion just last month, following three months of contraction. The index rose above 50 to 52.3 points. A similar score is predicted this time.
Trade Balance: Published on Thursday at 1:30 GMT. This figure relates to April. Forecasts are positive this time. Australia is expected to see a drop in its deficit – from 2 billion to 770 million. This significant change will probably boost the Aussie.

AUD/USD Technical Analysis

The Aussie challenged the 0.8066 support line once again, but bounced off it and began a rally. After struggling with the 0.8240 resistance line, it rose up to 0.8550 before closing at 0.8477.

The current range for AUD/USD is between the minor resistance line of 0.8477, which was a strong line of resistance last year, and with 0.8240 which had a similar role.

Looking down, strong support is found at 0.8066, a line that was added on last week’s outlook. Further below, 0.7860 was a support line back in July 2009, and it’s followed by the important support line of 0.77. AUD/USD fell off this line with a big gap at the height of the financial crisis. Lower, 0.7450 is the line the Aussie fell to in those dark days.

Looking up, 0.8567, which provided support for many months, is now a strong resistance line. It’s followed by 0.88, that also was a line of support, and with 0.90, which is also a round psychological number.

Higher, 0.9135 supported the Aussie before the big collapse. It’s followed by 0.9327, which was a line of resistance lots of times in recent months.

I am bullish on AUD/USD.

The Aussie returned to enjoy its strong fundamentals, and take less hits from risk aversive trading. This busy week should provide more fuel for the Aussie to rise.

Further reading:

For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
For the Euro/Dollar, look into the EUR USD Forecast.
For the British Pound (sterling), read the GBP/USD forecast.
For the New Zealand dollar (kiwi), read the NZD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

AUD/USD Outlook – May 24-28

Yohay — Sat, 22 May 2010 20:59:09 +0000

Everything turned against the Aussie, and it closed a terrible week with a loss of about 550 pips. The upcoming week consists of 5 events that will move the Aussie, and an updated technical analysis for AUD/USD, now at lower ground.

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

Indications for a pause in rate hikes, lower inflation expectations, a drop in consumer confidence and the European debt issues (risk aversion), all hurt the Aussie, which needed (rumored) intervention to stabilize. Let’s start:

New Motor Vehicle Sales: Published on Monday at 1:30 GMT. The automotive industry is a strong one in Australia and moves the currency, especially as it comes on a rather empty calendar on Monday. Sales fell in the past three months after many months of rises. They’re expected to rise now.
MI Leading Index: Published on Wednesday at 00:30 GMT. This composite index from the Melbourne Institute, based on 9 indicators that most of them have already been released, rose by 0.5% last time, similar to previous months. A rise above 1% this time will push the Aussie higher.
Construction Work Done: Published on Wednesday at 1:30 GMT. This important quarterly indicator from the housing sector exceeded expectations in the past 3 quarters, with great leaps. Q4’s 2.6% rise will probably be followed by a 4.1% rise this time.
CB Leading Index: Published on Thursday at midnight GMT. Contrary to MI’s indicator, the leading index from the Conference Board dropped in the past two months. A rise is predicted this time. Note that this index is based on 7 indicators, rather than 9 in the previous one.
Private Capital Expenditure: Published on Thursday at 1:30 GMT. The amount of new capital / investments in Australia is a very important indicator, as it’s a quarterly one. After a drop of 5.2% in Q3, expenditure jumped by 5.5% in Q4. A milder rise of 2.6% is predicted this time.

AUD/USD Technical Analysis

The Aussie began the week by losing the 0.88 support line, that held it in recent weeks. It then lost the all-important 0.8567 line that was the lowest point since October and also the 2010 low, until this week. Trouble continued as the pair broke under the important 0.8240 line, which worked as a resistance and as a support line before AUD/USD went to higher ground. After bottoming out at 0.8071, it closed at 0.8308. A very exciting and awful week for the Aussie.

Many lines have been added on last week’s outlook. The current range for the pair is between the important support line of 0.8240 and the minor resistance line of 0.8477, which worked as a strong resistance line before the pair broke higher.

Lower, 0.8040 is the next line of support, serving as such long ago. Significant support can be found at 0.77, which was the place that the Aussie dropped from in the height of the financial crisis, back in October 2008. It also worked as a support line last summer.

Even lower, 0.7450, the place where the Aussie fell to during the crisis is another significant support line. It’s followed by 0.71.

Looking up, 0.8567 continues to be an important line. A break above this line will mean a strong correction. Above this line, 0.88 is the next resistance line, followed by 0.90, 0.9135 and the almighty 0.9327 resistance line. Note that most lines worked as support lines just a few weeks ago.

I’m neutral on the Aussie.

It’s drop last week was the biggest move since October 2008. On one hand, the loss of 0.8567 means bearish momentum, but on the other hand, it’s in oversold territory. The rate hikes worked so well, that the economy cooled down. It will take at least another week before the pair stabilizes and a new direction will be seen.

Further reading:

For a broad view of all the week’s major event in all currencies, read the forex weekly outlook.
For the Euro, read the EUR USD Forecast.
For the British Pound, look into the GBP/USD forecast.
For USD/CAD, check out the Canadian dollar forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.