AUD/USD, reversed directions last week, posting gains of close to 1.0%. There is just one Australian event in the upcoming week. Here is an outlook at the highlights and an updated technical analysis for AUD/USD.
The RBA minutes were dovish, which was not a surprise, coming after the RBA cut rates from 1.50% to 1.25%. Policymakers said that it was “more likely than not” that further policy easing would be appropriate. On the housing front, the House Price Index plunged 3.0% in Q1, marking a fifth straight decline.
- Private Sector Credit: Friday, 1:30. Borrowing levels are directly related to consumer confidence and spending, so higher credit levels are good news for the economy. The indicator has been fairly steady and posted a gain of 0.2% in April, shy of the forecast of 0.3%. Another gain of 0.2% is projected in May.
Technical lines from top to bottom:
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 is the high-point in 2019. It has held since early January.
0.6988 remained relevant during the week. It marked the low point in April.
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.
0.6547 was an important resistance line back in December 2008.
I remain bearish on AUD/USD
The RBA has finally acknowledged that economic conditions in Australia remain weak, which could lower sentiment towards the Australian dollar. Tensions are rising in the Persian Gulf, and this could sour risk appetite and weigh on the Aussie.
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Further reading:
- EUR/USD forecast – for everything related to the euro.
- GBP/USD forecast – Pound/dollar predictions
- USD/JPY forecast – projections for dollar/yen
- USD/CAD forecast – Canadian dollar analysis
- Forex weekly forecast – Outlook for the major events of the week.
Safe trading!
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