The Australian dollar closed lower for the fourth week in a row but did not record new lows for a change. Is it ready to recover? A speech by Phillip Lowe is the main event in a busy week. Here are the highlights of the week and an updated technical analysis for AUD/USD.
The Reserve Bank of Australia left the interest rate unchanged once again and did not indicate any change. Most Australian figures such as the trade balance and retail sales came out above expectations. However, China, Australia’s main trade partner is expecting slightly weaker growth according to the forward-looking PMI figures.Updates:
- Apr 15, 17:40: AUD/USD Forecast Apr. 16-20 – A bit overbought, jobs in the limelight: The Australian dollar advanced nicely as trade came back to fashion once again. The upcoming week features the RBA minutes, Australian...
- Apr 13, 13:15: AUD/USD is marching higher and does not care about the death cross: The AUD/USD is taking advantage of the positive atmosphere and rising to the highest levels in nearly a month. The...
- Apr 11, 9:28: There are many technical reasons why AUD/USD is stuck here: After the Aussie shot higher, the Technical Confluences Indicator shows that it faces the convergence of several important lines of resistance at...
- Apr 10, 9:40: FOMC minutes will try to balance between trade fears and optimism on the economy: The Fed publishes the meeting minutes from the first rate decision led by Powell. The focus is on inflation and...
AUD/USD daily graph with support and resistance lines on it. Click to enlarge:
- AIG Construction Index: Sunday, 22:30. The Australian Industry Group showed solid growth in the construction sector with 56 points in February. The figure for March will likely be similar.
- NAB Business Confidence: Tuesday, 1:30. This 350-strong survey by the National Australia Bank dropped to 9 points in February after two consecutive rises. The report for March may see a small rise.
- Westpac Consumer Sentiment: Wednesday, 00:30. Westpac survey of around 1200 consumers rose by 0.2% in March, a moderate change after significant swings in previous months. We will now get the fresh figure for April
- Phillip Lowe talks: Wednesday, 5:05. The Governor of the RBA will speak at the Australia-Israel Chamber of Commerce in Perth, Western Australia. After he left the interest rate unchanged, he may shed some light on future moves by the RBA in this speech.
- MI Inflation Expectations: Thursday, 1:00. This inflation gauge by the Melbourne Institute fills in the gap that the government leaves by publishing the CPI report only once per quarter.
- Home Loans: Thursday, 1:30. Loans for purchasing homes disappointed in the past two months with significant falls. After a drop of 1.1% in January, the figure for February is projected to result in yet another slide: 0.3%.
- RBA Financial Stability Review: Friday, 1:30. The RBA publishes the report on financial stability only twice per year, giving it more importance. The recent rise in Australian household debt may be in the limelight.
*All times are GMT
AUD/USD Technical Analysis
Aussie/USD flirted with the 0.7650 level (mentioned last week) before bounvcing. However, the pair did not go anywhere fast.
Technical lines from top to bottom:
0.8050 capped the pair in August and also temporarily in January, on its way up. 0.7990 was the high point in February and protects the 0.80 level.
0.7890 worked as support in February and resistance in October. 0.7780 capped the pair in late March and also was a pivotal line in February.
0.7730 capped the pair in early April. 0.7675 served as a line of support in mid-March.
Lower, 0.7640 was a trough in late Marc. The last line to watch is the round 0.75 level which is where the began its assent in December.
As the chart shows, AUD/USD is trading in a downtrend channel. This is a bearish sign. The pair holds on to this channel.
I remain bearish on AUD/USD
The RBA is in no rush to make any move while the Fed is keen to raise rates even if the tensions around global trade take a toll on the economy.
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