- AIG Services Index: Sunday, 22:30. The index has posted two successive readings around the 52-level, pointing to limited expansion in the services sector. We will now receive the July release.
- MI Inflation Gauge: Monday, 1:00. This monthly inflation indicator helps analysts track inflation on a monthly basis. The indicator has been stuck at zero for the past two months, as inflation remains at low levels.
- ANZ Job Advertisements: Tuesday, 1:30. In June, the indicator halted a nasty streak of declines, with a strong gain of 4.6%. Will the positive direction continue in July?
- RBA Rate Decision: Tuesday, 4:30. The markets are still buzzing about the hyper-dovish RBA, which made back-to-back rate cuts earlier in the summer. The benchmark rate currently stands at 1.0% and no change is expected at the upcoming meeting. A dovish rate statement could send the Aussie downwards.
- AIG Construction Index: Wednesday, 22:30. The index remains mired below the 50-level, which points to contraction in the construction sector. In June, the index improved to 43.0 points.
- RBA Monetary Policy Statement: Friday, 1:30. This quarterly release provides a broader view of the economy than the short rate statement. A dovish policy statement would be bearish for the Australian dollar.
*All times are GMT
AUD/USD Technical Analysis
AUD/USD broke through support at 0.6825 (mentioned last week) late in the week. This line had not been tested since the first week of January.
Technical lines from top to bottom:
With AUD/USD dropping sharply last week, we start at lower levels:
0.7165 has held in resistance since early April.
0.7085 was a low point in September. 0.7022 is next.
0.6988 marked the low point in April.
0.6865 has some room as resistance as AUD/USD continues to lose ground.
The pair broke through 0.6825 late in the week. This line had held in support since the first week in January.
0.6744 was a low point in January. Will this support line break this week?
0.6686 was a cap back in January 2000.
0.6627 has held in support since March 2009.
0.6532 is next.
0.6456 is the final support level for now.
I remain bearish on AUD/USD
The Australian economy continues to feel the effects of the slowdown in China, and the announcement that the U.S. will impose further tariffs on China could dampen risk appetite and add to the Aussie’s misery. The currency has lost 2.5% in July and the downward trend has extended into August.
- EUR/USD forecast – for everything related to the euro.
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- USD/JPY forecast – projections for dollar/yen
- USD/CAD forecast – Canadian dollar analysis
- Forex weekly forecast – Outlook for the major events of the week.