After weeks of volatility, AUD/USD was almost unchanged last week. This week features the RBA minutes. Here is an outlook at the highlights and an updated technical analysis for AUD/USD.
The NAB Business Confidence index plummeted to -66 points in March, down from -4 points a month earlier. This marked a historical low for the indicator. Consumer confidence in April plunged 17.7%, after a decline of 3.8% in March. Employment numbers were unexpectedly strong. The economy created 5.9 thousand in March, above the estimate of -33.0 thousand. The unemployment rate ticked higher, from 5.1% to 5.2%. This beat the estimate of 5.4 percent. China’s economy contracted by 6.8% in Q1, compared to a gain of 6.0% in Q4. This was worse than the estimate of -6.2 percent.
- RBA Monetary Policy Meeting Minutes: Tuesday, 1:30. The RBA minutes will provide details of the March policy meeting. At that meeting, the bank maintained the cash rate at 0.25%. A pessimistic assessment by policymakers in the minutes could weigh on the Aussie.
- MI Leading Index: Wednesday, 12:30. The Melbourne Institute index continues to point to weak economic conditions and declined by 0.4% in February. We now await the March data.
AUD/USD Technical Analysis
Technical lines from top to bottom:
0.6627 has held in resistance since early March. 0.6560 is next.
0.6456 is providing support.
0.6380 (mentioned last week) remains an immediate resistance level.
0.6240 is providing support.
0.6150 has some breathing room in support after sharp gains by AUD/USD last week.
The round number of 0.6000, which has psychological significance, is the final support level for now.
I remain bearish on AUD/USD
The COVID-19 outbreak has ravaged the world economy and dampened risk appetite. This means that minor currencies such as the Aussie will likely remain under pressure.
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