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There was finally some good news for AUD/USD, which climbed 6.1% last week and crossed above the 0.61 level. There are three  events in the upcoming week.  Here is an outlook at the highlights and an updated technical analysis for AUD/USD.

Australian Manufacturing PMI improved to 50.1 in March, up from 49.8 a month earlier. This reading pointed to stagnation in the manufacturing sector. The services PMI fell sharply to 39.8, down from 48.4 a month earlier.

In the U.S., the highlight was a staggering figure for unemployment claims, which hit 3.2 million. This was due to the shutdown of many factories and businesses across the country. The ISM Manufacturing PMI dipped to 49.2 in March, down from 50.8 a month earlier. It marked the first contraction since August. Elsewhere, durable goods orders in February were a mix. The headline figure jumped 1.2%, up from -0.2% a month earlier. However, the core reading declined by 0.6%, compared to a gain of 0.9% in February. GDP for Q4 showed a 2.1% in the third estimate, confirming the previous estimate.
AUD/USD daily graph with support and resistance lines on it. Click to enlarge:
  1. Private Sector Credit: Tuesday, 0:30. Borrowing by consumers and businesses rose to 0.3% in January, its best showing since March 2019. Another gain of   0.3% is expected in the upcoming release.
  2. Chinese Manufacturing PMI: Tuesday, 1:00. The CORVID-19 outbreak caused a massive slump in manufacturing in February, as the PMI plunged to 35.7 points. This was down from 50.0 in January and well below the estimate of 45.1 points. The index is projected to improve to 44.9, which still points to contraction.
  3. AIG Manufacturing Index: Tuesday, 21:30. The index has registered four straight readings below the 50-level, which separates expansion from contraction. In January, the index slowed to 44.3, its lowest level since May 2015. We will now receive the February reading.
  4. Building Approvals: Wednesday, 0:30. The indicator plummeted by 15.3% in January, indicative of contraction in the construction sector. This reading comes after a small decline of 0.2% a month earlier. Analysts had forecast a gain of 1.1%. The February reading stands at 3.1%.
  5. AIG Construction Index: Thursday, 9:30. The index remains mired in contraction territory, but did improve in February to 42.7, up from 41.3 points. Will we see another reading in contraction territory?
  6. Final Retail Sales: Friday, 0:30. Australia began reporting Preliminary Retail Sales for the first time in March, with a reading of 0.4%. Final Retail Sales is expected to confirm the initial reading.  


AUD/USD Technical Analysis

Technical lines from top to bottom:

With AUD/USD registering sharp gains last week, we start at higher levels:

0.6456 has held in resistance since mid-March.

0.6380 (mentioned  last week) is next. Until mid-March, the line had held in support since 2009.

0.6240 is next.

0.6150 is an immediate support level.

The round number of 0.6000, which has psychological significance, is next.

0.5920 has some breathing room after strong gains by AUD/USD last week.

0.5800  is the final support level for now.


I remain bearish on AUD/USD

As a risk currency, the Aussie is likely to face turbulence, as the global economy is reeling from the CORVID-19 crisis.

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