AUD/USD Forecast April 17-21

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AUD/USD posted modest gains last week, as the pair closed at 0.7572. This week’s key event is the RBA Monetary Policy Meeting MinutesHere is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

US consumer indicators disappointed, as CPI and retail sales reports missed their estimates. However, employment and consumer confidence beat expectations. In Australia, employment change sparkled, as the economy added 60 thousand jobs in February.

Updates:

AUD/USD daily graph with support and resistance lines on it. Click to enlarge:

  1. Chinese GDP: Monday, 2:00. Chinese key indicators can have a strong impact on the Australian dollar. Chinese GDP edged up to 6.8% in Q1, above the estimate of 6.7%. No change is expected in the Q2 report.
  2. Chinese Industrial Production: Monday, 2:00. The indicator improved to 6.3% in February, beating the estimate of 6.2%. This marked the indicator’s strongest gain in five months. The estimate for the March report stands at 6.2%.
  3. Monetary Policy Meeting Minutes: Tuesday, 1:30. The RBA will release the minutes of its March meeting, where the RBA held rates at 1.50%. The markets will be combing through the minutes, looking for clues as to future monetary policy.
  4. CB Leading Index: Tuesday, 14:30. The indicator rebounded in January with a gain of 0.4%. Will the indicator post another gain in February?
  5. MI Leading Index: Wednesday, 00:30. This index has been losing ground, and came in at -0.1% in February. This marked its first decline since June 2016.
  6. New Motor Vehicle Sales: Wednesday, 1:30. This event is an important gauge of consumer spending. In February, the indicator dropped 2.7%, its sharpest decline since October 2015.
  7. NAB Quarterly Business Confidence: Thursday, 1:30. Business confidence is linked to spending and hiring, so the indicator should be treated as a market-mover. The indicator unchanged at 5 points in Q1, indicative of optimism in the business sector.

AUD/USD Technical Analysis

AUD/USD opened the week at 0.7507 and dropped to a low of 0.7471. The pair then reversed directions and climbed to a high of 0.7595, as resistance held at 0.7605 (discussed last week). The pair closed the week at 0.7572.

We start with resistance at 0.7938. This line has held since May 2015.

0.7835 was the high point in April 2016.

0.7741 was a cap in February.

0.7605 held in resistance. It starts the week as a weak line.

0.7513 has switched to a support role following gains by AUD/USD.

0.7429 is the next support line.

0.7311 marked a low point in November.

0.7223 is the next support line.

0.7105 has held since March 2016. It is the final support level for now.

I am neutral on AUD/USD

The US consumer remains optimistic about the economy but is not spending, which has put a damper on consumer inflation and spending levels. At the same time, monetary divergence favors the US dollar.

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About Author

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.

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