The Australian dollar had its worst week since October, falling 2.2 percent. The Aussie has declined 2.5% in February, erasing most of the gains seen in January. We’ll get a look at business and consumer confidence, both of which are struggling. Here is an outlook for the highlights of this week and an updated technical analysis for AUD/USD.
The RBA maintained the benchmark rate at 1.50%, despite pressure to ease policy in response to weakness in household spending and property prices. Retail sales, a key gauge of consumer spending, declined 0.4%, its first decline in a year.
AUD/USD daily graph with support and resistance lines on it. Click to enlarge:
- RBA Monetary Policy Meeting Minutes: Monday, 00:30. At the February policy meeting, the RBA held the benchmark rate at 1.50%.
- MI Leading Index: Tuesday, 23:30.
- Wage Price Index: Wednesday, 00:30.
- Flash PMIs: Thursday, 00:00.
- Employment Data: Thursday, 00:30.
*All times are GMT
AUD/USD Technical Analysis
AUD/USD posted sharp losses in mid-week, and closed the week just below the 0.7085 line (mentioned last week).
Technical lines from top to bottom:
0.7480 capped the pair in mid-July and defends the round 0.75 level.
Next is the round number of 0.74, 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 protected the symbolic round number of 0.70.
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.
I am bearish on AUD/USD
There is continuing concern over the slowdown in China, as the Asian giant is Australia’s largest trading partner. The U.S-China trade war continues, and it’s questionable if the sides will reach a trade deal before a March 2 deadline, when the U.S. has said it will impose further tariffs on China if no agreement is reached
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