AUD/USD lost ground last week, dropping below the symbolic 0.70 level. There are seven Australian releases in the upcoming week. Here is an outlook at the highlights and an updated technical analysis for AUD/USD.
- AIG Manufacturing Index: Sunday, 21:30. The index dropped to 48.1 in November, falling into contraction territory for the first time in five months. Will we see a rebound in the December release?
- ANZ Job Advertisements: Tuesday, 0:30. The indicator has pointed to weakness in the employment sector, with three declines in the past four months. In November, the indicator came in at -1.7%. We now await the December release.
- AIG Construction Index: Tuesday, 21:30. The index remains deep in contraction territory. In November, the index slowed to 40.0, its weakest level in 4 months. Another decline is projected for December.
- Building Approvals: Wednesday, 0:30. This indicator tends to show sharp swings, which makes projections a tricky task. In October, the decline of -8.0% crushed the forecast of -1.0%. A rebound is expected in November, with an estimate of 2.5%.
- Trade Balance: Thursday, 0:30. Australia’s trade deficit narrowed to A$4.50 billion in October, down sharply from the previous release of A$7.18 billion. The downward trend is expected to continue in November, with an estimate of A$4.10 billion.
- AIG Services Index: Thursday, 21:30. The services sector continues to show expansion. In November, the index dipped to 53.7 pts. We know await the December release.
- Retail Sales: Friday, 0:30. This key indicator has slowed in recent months, falling to zero in October. This missed the estimate of 0.3%. Investors are expecting a turnaround in November, with an estimate of 0.4%.
AUD/USD Technical Analysis
Technical lines from top to bottom:
We start with resistance at 0.7340. This is followed by 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 has switched to a resistance level following losses by AUD/USD last week. It is an immediate line.
0.6865 (mentioned last week) is the next support level.
0.6744 is next.
0.6627 has held in support since March 2009. It is the final support line for now.
I am neutral on AUD/USD
The trade agreement between the U.S. and China, although limited in scope, should boost the Chinese economy. This is good news for Australia, as China is Australia’s number one trading partner. Risk appetite has been strong lately, but the U.S. airstrike which killed a top Iranian general could unnerve investors and raise risk apprehension, which would be bearish for the Aussie.
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