There are no significant events in Europe today, but I recommend reading Casey Stubbs’ article about the dollar strength and the Euro.

A day after the disappointing Australian GDP, the RBA Monthly Bulletin is posted. It should give another view of the economy. In its neighbor, New Zealand, the NBNZ Business Confidence will also give a broad view of the economy.

In Britain, Retail Sales are expected to rise by 0.5%. After yesterday’s ground-breaking job figures, these number could also be better.

British Consumer Inflation Expectations are also expected to rise, following the strong CPI. Later in Britain, CBI Realized Sales are predicted to edge up from 13 to 16 points. This will add to the retail sales published earlier.

For more on the Pound, read the GBP/USD forecast.

In Switzerland, the ZEW Economic Expectations are expected to help the Swissy.

Canadian CPI is expected to turn positive and rise by 0.3%. Core CPI is also expected to edge up and rise by 0.2%.

Later in Canada, Foreign Securities Purchases, which can be interpreted as trust in the Canadian dollar, are expected to drop to 6.11 billion. For more on the Canadian dollar, read the USD CAD forecast.

American Unemployment Claims rose last week, and are now expected to drop back to 466K. Regarding employment, eyes are on the next Non-Farm Payrolls release.

Also in the US, the Philly Fed Manufacturing Index will draw attention, with an expected to drop to 16.1 points. The CB Leading Index is expected to rise by 0.8%, stronger than last month.

That’s it for today. Happy forex trading!

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The Australian dollar puts up a fight to the recent greenback’s strength. The upcoming week contains two major events: GDP for the third quarter and the meeting minutes of the last rate decision, that will give us a hint about another possible rate hike. Here’s an outlook for the Australian dollar, and an updated technical analysis for AUD/USD.

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

Australia’s employment numbers exceed expectations over and over again. Australia enjoys China’s strength, which was also seen recently. We don’t have too many figures this week, but they are all quite significant. Le’ts review the events. The technical analysis will follow:

1. Monetary Policy Meeting Minutes: The Reserve Bank of Australia raised the interest rate to 3.75% in their last meeting. This was the third consecutive rate hike, and probably not the last. The meeting minutes from this meeting are published on Tuesday at 00:30 GMT, and are expected to hint about another rate hike. The aforementioned employment figures support this.
2. Housing Starts: This is a quarterly figure that gives a big picture of the housing sector. In Q2, housing starts disappointed by falling in a scale of 3.7%. This time, in Q3, housing starts are expected to align with the rest of the economy, and rise by 6.1%. Published on Tuesday at 00:30 GMT, and somewhat overshadowed by the meeting minutes.
3. MI Leading Index: The Melbourne Institute publishes this composite index on Tuesday at 23:30 GMT. Most of the nine indicators that consist of this number have already been published, but is still important. After neat rises in previous months, this index edged up by only 0.4% last time. A stronger rise is expected this time.
4. GDP: Australia has avoided an official recession in the current global crisis. The economy contracted in only one quarter, Q4 of 2008. Since then, it posted growth. After growing by 0.4%, the Australian Gross Domestic Product is expected to rise by 0.4% this time. This major release is due on Wednesday at 00:30 GMT.
5. Ric Battellino talks: RBA Deputy Governor Ric Battellino makes many public appearances and impacts the Aussie. His general attitude is optimistic – expressing confidence of long term growth. He’ll make a public appearance on Wednesday at 1:15 in Sydney, and can shake the Aussie as well.
6. RBA Monthly Bulletin: The RBA completes its current round of official releases with this collection of articles and statistics. This could give more information about the central bank’s view towards the economy and future policy. Published on Thursday at 00:30 GMT.

AUD/USD Technical Analysis

The Aussie traded lower during most of the week, bottoming out above 0.90. It later rose and touched 0.92 before closing at 0.9125.

Initial and minor support exists at 0.9090, a line that has returned to the chart after being absent from last week’s outlook. This line was strongly broken on Thursday. The Aussie didn’t go below since then.

More significant support is at 0.98950, a line that was tested from both directions. Even lower, 0.85 is an area that the Aussie had a hard to to breach during August, and serves as a far support line.

Looking up, 0.9210 was tested this week once again, making it stronger. Further above, 0.9322 was tested 3 times in the past and also serves as major resistance. Even higher, the YTD high of 0.94 is the next line of resistance.

I remain bullish on the Aussie.

My bulls were fueled by the employment improvement, and I believe that they’ll get a boost from the GDP and a growing consensus of another rate hike.

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 GBP/USD, look into the British Pound forecast.
• For the Australian dollar, read the AUD/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.

In Australia, Guy Debelle, the RBA Assistant Governor, will be making a public appearance, and might give some more hints about the upcoming rate decision in December. Also note the RBA Monthly Bulletin.

For more on the Aussie, read the AUD/USD forecast.

Swiss Trade Balance is predicted to enjoy a growing surplus. USD/CHF is still above parity.

British Retail Sales are predicted to grow by 0.6% after disappointing and remaining unchanged last month. At the same time, Public Sector Net Borrowing is expected to drop to less than half of last month’s size, to 6.7 billion pounds. Also in Britain, a speech by Paul Fisher, a member of the MPC is due.

For more on the British Pound, read the GBP/USD Forecast.

A day after Canadian prices went up, with a symbolic 0.1% rise, the Leading Index is expected to rise by 0.8%, less than last month. At the same time, Foreign Securities Purchases, which represent cash flow into Canada, are expected to stand at 3.2 billion, less than last month.

Wholesale Sales, are predicted to rise by 0.6%, after a drop of 1.4% last time. The BOC Review, the is expected to give another look at the Canadian economy. Near the end of  For more on the loonie, read the Canadian dollar forecast.

In the US, the weekly unemployment claims are showing a slight improvement in jobs, with the number moving to 502K last time. This number isn’t expected to change according to economists, but learning from the past weeks, we could have a good surprise.

Also in the US, the Philly Fed Manufacturing is predicted to rise from 11.5 to 12.3 points. The CB Leading Index is expected to rise by 0.5%, half of last month’s rise.

Another notable event is a public appearance by Timothy Geithner, which sometimes moves the markets.

That’s it for today. Happy forex trading!

The Australian dollar continued to push forward this week, riding on good employment figures. This week’s meeting minutes from the RBA will supply hints for the next move by the RBA. Here’s an outlook for the upcoming week in Australia, and an updated technical analysis for AUD/USD.

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

Apart from the meeting minutes, note the Wage Price Index, which might show inflationary pressures, something that is more directly correlated with rate hikes than the number of employees. Which country will be the next to raise rates? Australia is currently alone. Let’s review the events:

1. Monetary Policy Meeting Minutes: In the recent rate decision, Glenn Stevens’ RBA raised the Australian interest rate for the second time, up to 3.5%. We now get to see what the policymakers were talking about, and especially see the prospects for December’s rate decision. Currently economists are split about the expectations for the next move: another rise or a pause? The expectations move the Aussie. Published on Tuesday at 00:30 GMT.
2. Guy Debelle talks: We might get more hints from Guy Debelle, which is the RBA Assistant Governor. He’ll be talking in two events: on Tuesday at 10:05 GMT and on Thursday at 1:00 GMT. Both events take place in Sydney.
3. MI Leading Index: The Melbourne Institute publishes this composite index on Wednesday at midnight. Most of the 9 pieces of this index have already been published, but the bottom line number still has an impact on the Aussie. This index rose nicely, by 1.1%, in the past two months, and is expected to continue doing so this time as well.
4. Wage Price Index: This is an important inflation indicator – it’s published once a quarter and looks at salaries. The RBA takes this into consideration when making the rate decision. In the past two quarters of this year, the index rose by 0.8%, and in the third quarter it’s predicted to rise by 0.7%. Published on Wednesday at 00:30 GMT.
5. RBA Monthly Bulletin: The last release from the RBA this week is a collection of economic data that the RBA sees on its desk. It can contain thoughts about inflation. Published on Thursday at 00:30 GMT.

AUD/USD Technical Analysis

The Aussie began the week with a steady rise reaching the year-to-date highs of 0.9326. It then broke the resistance line on the employment figures, and pushed up to 0.9368, before giving in to some dollar strength. It recovered quickly and made the highest close this year – 0.9328.

I still mark 0.9326 as minor support line, since the Aussie closed around it. I’ve modified some of the lines since last week’s AUD/USD outlook. Looking down, 0.9110 is a minor support line. In recent weeks, it served as a minor support line, and later as a minor resistance line.

Further down, 0.8950 is already a major support line, a place where the Aussie made a break under last week, and previously bounced off it. Looking even lower, the area of 0.85 is another major support line. The Aussie was stuck under it during the summer.

Looking up above 0.9326, the next resistance line is 0.95. It was a major resistance line in 2008, and is also a round number. Even higher, 0.9650 was a resistance line at the beginning of 2008, before the Aussie made an attempt to reach parity with the dollar.

My sentiment remain bullish on the Aussie.

The recent employment figures and the continuing rise of the currency support this sentiment. I wonder if we’ll get hints for another rate hike this week.

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 GBP/USD, look into the British Pound forecast.
• For the Australian dollar, read the AUD/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.

AUD/USD forex graph, with support and resistance lines inside. Click to enlarge:

Glenn Stevens raised the Australian interest rate to 3.25%, being the pioneer in rate hikes. It raised the question about which country will be next to raise the rates. Later, the Aussie bounced off a resistance line, but the excellent employment figures took it over the top. This week, Stevens will continue to impact the Aussie in various ways. Let’s see what’s awaiting us:

1. NAB Business Confidence: The National Australia Bank surveys 450 businesses about the current economic conditions. This survey showed improving conditions in the past 3 months, with the score being on the rise. Last month’s score of 18 points is expected to followed by an even better one this time. Published on Tuesday at 00:30 GMT.
2. Westpac Consumer Sentiment: Another Australian Bank brings a consumer survey this time. Westpac surveys 1200 consumers about their thoughts of the economy, focusing on future purchases. This indicator has risen in the past 4 months, with a rise of 5.2% last month. A more modest rise is expected this time. Published on Wednesday at midnight.
3. NAB Quarterly Business Confidence: We return to the National Australia Bank for another business survey – a quarterly one. The report for the third quarter might be published as early as Wednesday, but could be released later. Contrary to other Australian figures, this one has been negative in the past 6 months, with -4 last time. Expectations for improving conditions are expected this time – a positive number.
4. Glenn Stevens speaks: After last week’s rate hike and the excellent employment figures, RBA governor Glenn Stevens will speak in Perth and will speak about future policy. His speech is due on Wednesday at 23:30 GMT.
5. MI Inflation Expectations: The Melbourne Institute publishes this early inflation data before the government’s CPI. Australian prices have picked up slowly, with annually adjusted expectations at 3.5% in the last two months. A higher figure now will justify Glenn Stevens’ decision to raise the rates. Published on Thursday at midnight.
6. RBA Monthly Bulletin: Completing the assessments for the economy, this report by the RBA gives us an insight to how they see the situation, and may hint about future policy. The report is released on Thursday at 00:30 GMT.

AUD/USD Technical Analysis

As aforementioned, the Aussie traded on data last week, testing the 0.8950 resistance line mentioned in last week’s AUD/USD Outlook, before riding on the employment figures and climbing above them, closing at 0.9035.

0.8950 now serves as a support line for AUD/USD. Below that, 0.85 is a major support line, that the Aussie had a hard time breaking it.

Looking up, 0.9090 was the peak AUD/USD reached. This also worked as a resistance line in 2008 and 2008. A stronger resistance line is at 0.93, which was a support line last summer, when the Aussie was close to parity with the US dollar.

I continue to be bullish on the Aussie, but it might take a rest this week. All the economic indicators are positive, and the growing yield makes it attractive. After a big ride, the Aussie might take a rest this week and trade in a range before gathering more momentum.

Further reading:

• For a broad view of the major events this week, read the Forex Weekly Outlook.
• For the Euro, read the EUR/USD Outlook.
• For the British Pound, check out the GBP/USD Outlook
• For the Canadian dollar, check out the USD/CAD  Outlook.

Yes, Australia starts the day again, this time with the RBA Monthly Bulletin. After the release of the Monetary Policy Meeting Minutes, this probably won’t add to much. For more on the Australian dollar, read the Aussie Outlook.

Swiss Trade Balance is predicted to show a rise in the surplus, from 1.57 billion to 1.69. Later in Switzerland, ZEW Economic Expectations is released.

British Retail Sales have shown a nice rise last time – 1.2%. This time, the rise is predicted to be more modest – 0.4%. This will seriously move GBP/USD. Also in Britain, Public Sector Net Borrowing is expected to show a decline in the government’s spending.

For more on the British Pound, read the GBP/USD Outlook.

In the US, weekly Unemployment Claims are expected to show only a small improvement after last week’s disappointment – from 558K to 548K.

The Philly Fed Manufacturing Index is released later, and it’s expected to be less negative than last time.

Canadian Wholesale Sales are expected to dip by 0.1%, less than last time.  The BOC Review will be published later and will conclude the Canadian releases for this week.

For more on the loonie, read the Canadian Dollar Outlook.

That’s it. Happy forex trading!

AUD/USD forex graph with support and resistance lines marked:

Despite holding a rather high interest rate, Glenn Stevens sees the end of stimulus efforts, and even raising interest rates, or “bringing them back to normal”, in his words.

1. Monetary Policy Meeting Minutes: Australia has the highest interest rates in the West, 3%, and the RBA recently decided to keep them that way. On Tuesday at 1:30 GMT, we’ll get a chance to see what the RBA seniors were discussing, and if they think of raising the rates sooner than later, as Glenn Stevens hinted.
2. Malcolm Edey speaks: RBA Assistant Governor  Dr. Malcolm Edey will speak in a conference in Sydney, and might shed some more light on Stevens’ testimony last week. This important speech, titled ”Examining the Impact of the Global Financial Crisis on Retail Financial Services in Australia” will take place on Tuesday at 23:20 GMT.
3. MI Leading Index: 9 economic indicators are combined into the Leading Index published by the Melbourne Institute. After two positive months, this index fell by 0.2% last time. Will it get back up? Answers are due on Wednesday at 1:00 GMT.
4. RBA Monthly Bulletin: Yes, another verbal indicator is with us this week from the land down under. Despite being released after the Monetary Policy Meeting Minutes and the RBA heads’ important speeches, this array of articles outlines the economic situation from the RBA’s perspective, and this might hint on future interest rate decisions. Published on Thursday at 1:30 GMT.

AUD/USD Technical Analysis

The Aussie began the week by stepping down. During the early hours of Tuesday it broke the minor support line at .08230, but his move, during the Asian session, proved to be a false break. Not only did AUD/USD climb back up, it also made nice gains, reaching 0.8477 at the peak. But Friday’s dollar bulls didn’t skip the Aussie, and it finally closed at 0.8323, not far from last week’s close.

There are no major changes since last week’s AUD/USD Outlook. 0.85 continues to be a firm resistance line. It was reinforced this week. IF AUD/USD breaks upwards, the next line is at 0.8830, quite far out out.

Looking down, the false break of 0.8230 also reinforces this support line. Below that, only the vicinity of 0.77 is a major support line.

On one hand, the Australian economy is strong, and might see a rate hike sooner than later. On the other hand, the dollar bulls seem strong. I have a slight tendency towards the Aussie, but it first needs to break 0.85.

Further reading:

• For a broad view of the major events in all currencies: Forex Weekly Outlook.
• For the EUR/USD, check out the EUR/USD Outlook.
• For a coverage of GBP/USD, read the British Pound Outlook.
• For the Canadian dollar, check out the USD/CAD Outlook.

Swiss, German and French banks are on holiday today, so trading might be slightly thinner than usual.

Australia’s MI Inflation Expectations might rise on improving economic conditions. Also in Australia, the RBA Monthly Bulletin is notable.

In Europe, it’s PMI day! Flash Manufacturing PMI and Flash Services PMI will be released in France, then Germany and then for the whole of Europe. All this will happen between 7:00 to 8:00 GMT. All the figures are expected to show modest gains, but none of them are expected to pass the crucial 50 mark. Where will EUR/USD go?

British Retail Sales are expected to rise by 0.5%, showing improvement. This could send the Pound higher, being an important figure. See my special coverage for the Pound this week.

Also in Britain, Prelim Business Investment is expected to fall by 4%, Public Sector Net Borrowing is predicted to shrink to 7.4 billion and Prelim M4 Money Supply to rise by 0.5%. Late at night, British MPC member Charles Bean will speak.

In Canada, Prelim M4 Money Supply is predicted to squeeze to 5.12 billion and Wholesale Sales are predicted to fall by 0.8%. Though these aren’t the most important figures in Canada, they could still move the loonie. Read more about this important week for the USD/CAD.

In the US, Unemployment Claims got a blow last week (probably from Chrysler), and they aren’t expected to get better. Stability comes before recovery…

Also in the US, Philly Fed Manufacturing Index is predicted to stand at -19.2. CB Leading Index is expected to rise by 0.7%.

That’s it. Happy forex trading!

In Australia, the RBA Monthly Bulletin will give a good indication on the Australian economy. 

In Switzerland, deflation fears are real – PPI is expected to fall by 0.2%, less than last month’s drop of 0.6%.

In Europe, the picture is more complex, with CPI expected to rise by 0.6% (annually adjusted). Core CPI is predicted to rise by 1.4%. More on European inflation.

Later in Europe, Industrial Production is about to plunge by 2.5%, according to early estimations.

Moving to North America, Canadian Manufacturing Sales are predicted to turn positive, and rise by 2.1%. The Canadian dollar has strengthened lately. Will this continue?

American Building Permits are expected to stay stable, at 0.55M. Housing starts are expected to drop from 0.58K to 0.54K. American housing is above the bottom. This trend should continue also today, and that Housing Starts won’t fall.

Weekly Unemployment Claims are expected to rise slightly – from 654K to 657K. The job market situation is dire. It could be worse.

Also in the US, Philly Fed Manufacturing Index is estimated to fall by 31.8 points, better than last month’s -35. Later, Federal Reserve Bank of Atlanta President Dennis Lockhart will give a speech about the crisis.

Near the end of the day, New Zealand’s CPI is expected to rise by 0.3%, after falling by 0.5% last quarter. In Japan, the Tertiary Industry Activity is expected to drop by 0.7%. The previous reports from the Japanese industry were extremely bad. So, a bigger drop won’t be a huge surprise.

Happy Forex Trading!