AUD/USD posted small gains last week, as the lack of movement which characterized March has continued into April. Australia releases consumer confidence, while the U.S. releases CPI and the Federal Reserve minutes. Here is an outlook for the highlights of this week and an updated technical analysis for AUD/USD.
Australia indicators looked sharp last week. Building Approvals soared 19.1% and retail sales climbed 0.8%, its strongest gain since November 2017. As expected, the RBA held rates at 1.50%, where it has been pegged since 2016. The rate statement was cautiously optimistic, noting that “the outlook for the global economy remains reasonable, although growth has slowed and downside risks have increased.”
U.S. numbers started the week on a sour note, as retail sales and durable goods orders posted declines and missed their forecasts. On Friday, employment data was mixed. Nonfarm payrolls came in at 196 thousand, easily beating the estimate of 172 thousand in March. Still, this reading was significantly lower than the December and January releases, both of which were above the 300-thousand level. Wage growth dipped to 0.1%, shy of the estimate of 0.3%.
AUD/USD daily graph with support and resistance lines on it. Click to enlarge:
- ANZ Job Advertisements: Monday, 1:30. The Australian and New Zealand Group has not managed a gain in five months. In February, the indicator declined by 0.9%.
- Home Loans: Sunday, 1:30. Home loans are pointing to weakness in the construction sector, with five declines in the past six months. In January, the indicator declined 2.6%. The estimate for February stands at -3.0%.
- Westpac Consumer Sentiment: Wednesday, 00:30. This indicator is a key gauge of consumer confidence. In March, consumer sentiment dropped sharply, with a reading of -4.8%.
- MI Inflation Expectations: Thursday, 1:00. This Melbourne Institute indicator is a useful gauge for forecasting actual inflation. Inflation expectations have been rising and climbed 4.1% in February.
- RBA Financial Stability Review: Friday, 00:30. The central bank publishes a report on financial stability twice per year. Apart from the assessment on stability, the publication also provides economic figures and may provide hints about monetary policy.
*All times are GMT
AUD/USD Technical Analysis
0.7085 (mentioned last week) continues to remain relevant and was tested in support throughout the week.
Technical lines from top to bottom:
The round number of 0.74 was the high point reached at the wake of December. This is followed by 0.7340, which the pair breached in late November.
0.7315 was a swing high seen in late September. Further down, 0.7240 separated ranges in September and in October. 0.7190 marked a low point in the first week of December.
Lower, 0.7165 was a swing low after a recovery in mid-November. 0.7085 was a low point in September and remained relevant during the week.
Close by, 0.6970 played a role back in January 2017.
Below, 0.6825 supported the pair in late 2016 and early 2017.
0.6744 was a low point in January.
0.6686 was an important cap back in January 2000. It is the final support line for now.
I am bullish on AUD/USD
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