AUD/USD started last week with gains but these were erased on Friday as the pair recorded sharp losses. The upcoming week has three events. Here is an outlook at the highlights and an updated technical analysis for AUD/USD.
- NAB Business Confidence: Tuesday, 0:30. The National Australia Bank indicator fell to -2 in December, its first reading in negative territory since 2013. We now await the January release.
- Westpac Consumer Sentiment: Tuesday, Tentative. Consumer confidence has been declining, with only one gain in the past five months. In January, the indicator fell 1.8%. Will we see a rebound in February?
- MI Inflation Expectations: Thursday, 0:00. Analysts track this Melbourne Inflation indicator, as inflation expectations often translate into actual inflation figures. In January, the indicator jumped to 4.7%, compared to 4.0% a month earlier. The February release is next.
AUD/USD Technical Analysis
Technical lines from top to bottom:
We start with resistance at 0.7022.
0.6960 has held in resistance since the first week in January, when AUD/USD went on a sharp slide.
0.6865 (mentioned last week) is the next resistance line.
0.6744 remains relevant. The line switched to resistance following sharp losses by AUD/USD last week.
0.6627 has held in support since March 2009 but is under pressure. 0.6456 is next.
0.6380 is the final support line for now.
I remain bearish on AUD/USD
The coronavirus continues to weigh on investor risk appetite, and with China still struggling to contain the outbreak, risk assets like the Australian dollar are likely to remain under pressure.
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