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AUD/USD posted gains for a third straight week. The pair closed the week at 0.6897, its best weekly close since late October. There is only one Australian release this week. Here is an outlook at the highlights and an updated technical analysis for AUD/USD.

The RBA minutes reiterated that policymakers are taking a pause for now, but further rate cuts could be delivered early in 2019. The week ended with unexpectedly strong job data. The economy produced a sparkling gain of 39.9 thousand jobs, crushing the estimate of 14.5 thousand. The unemployment rate dropped from 5.3% to 5.2%, beating the forecast of 5.3%.
The U.S. posted solid numbers last week, underscoring positive economic conditions. Manufacturing PMI improved to 52.5 in December, just shy of the estimate of 52.6 pts. This was the indicator’s strongest gain since March and points to modes expansion. The week ended with Final GDP, which was unrevised at 2.1 percent.
AUD/USD daily graph with support and resistance lines on it. Click to enlarge:
  1. Private Sector Credit: Monday, 0:30. Borrowing levels remain low, as consumers remain concerned about economic conditions. The indicator dipped from 0.2% to 0.1% in September, shy of the estimate of 0.3%.The forecast for October stands at 0.2%.

AUD/USD Technical Analysis

Technical lines from top to bottom:

We start with resistance at 0.7250.

0.7165 has held firm since early April.

0.7085 has been a resistance line since July. This is followed by 0.7022.

0.6960 could face pressure if AUD/USD continues to move higher.

0.6865 (mentioned  last week) remains an immediate support level.

0.6744 is next.

0.6686 was tested in the first week of October.

0.6627 has held in support since March 2009.

0.6532 is the final support level for now.


I remain bullish on AUD/USD

The new Phase 1 trade agreement should boost the Chinese economy, which is good news for Australia, as China is Australia’s number one trading partner. However, with a quiet week ahead due to Christmas, any gains this week will likely be limited.

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