AUD/USD Forecast July 22-26 – China’s woes could weigh on Aussie

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AUD/USD posted small gains last week, with the pair showing some volatility late in the week. There is only one Australian event in the upcoming week. Here is an outlook at the highlights and an updated technical analysis for AUD/USD.
China’s economy grew 6.2% year-on-year in the second quarter, which matched the forecast. This reading was down from the 6.4% growth rate recorded in the previous two quarters. The ongoing tariff war with the United States has taken a toll on the second-largest economy in the world, which was posting growth of close to 7.0% just one year ago. The RBA minutes didn’t shake up the Aussie, as rate-setters said that rate policy would be adjusted ‘as needed’ to support growth. June employment numbers were a disappointment. After three months of strong job creation, the economy produced just 0.5 thousand jobs last month. The unemployment rate remained steady at 5.2%
In the U.S., economic numbers were steady last week. Retail sales ticked lower to 0.4% in June, down from 0.5%. Still, this was above the forecast of 0.1%. The numbers were identical for the core reading. There was positive news from manufacturing. The Empire State Manufacturing Index climbed to 4.3 in July, up from -8.6 a month earlier. The Philly Fed Manufacturing Index jumped to 21.8, its highest level in 9 months. The week ended up with UoM Consumer Sentiment, which climbed to 98.4 in July, up from 97.9 a month earlier.
AUD/USD daily graph with support and resistance lines on it. Click to enlarge:

CB Leading Index: Tuesday, 14:30. The Conference Board Index is based on 8 economic indicators. The index posted a soft gain of 0.1% in April. We will now receive the reading for June.

*All times are GMT

AUD/USD Technical Analysis

Aussie/USD

Technical lines from top to bottom:

We start at 0.7340, which has held in resistance since early December.

0.7315 was a swing high seen in late September.

0.7240 separated ranges in September and in October.

0.7165 (mentioned last week) has held in resistance since early April.

0.7085 was a low point in September.

0.7022 was relevant throughout the week.

0.6988 marked the low point in April.

0.6940 has held in support since late June.

0.6864 was a low point in May.

0.6744 was a low point in January.

0.6686 was a cap back in January 2000.

I remain bearish on AUD/USD

After back-to-back rate cuts from the RBA, the Aussie has become less attractive to investors. With Chinese growth slowing due to the tariff war with the U.S., the currency may have trouble holding its own against the greenback.

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Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.