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AUD/USD  reversed directions last week, as the pair  dropped 150 points. AUD/USD  closed at 0.7182. The upcoming week has five events. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.  

In the US,  key releases were satisfactory, led by retail  sales and inflation  numbers  which met expectations  late in the week. Expectations of a rate hike at the all important Fed policy meeting  enabled the  US dollar to post strong gains at the expense of the Aussie. Australian job numbers were outstanding (so good, in fact, that there are doubts as to  their accuracy), but this failed to stop the greenback’s rally.

[do action=”autoupdate” tag=”AUDUSDUpdate”/]

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

AUD_USD Weekly Forecast Dec14-18.

  1. Monetary Policy Meeting Minutes: Tuesday, 00:30.  This is the key event of the week. The minutes provide details of the RBA’s most recent policy meeting, at which the RBA maintained the benchmark interest rate at an even 2.00%.
  2. HPI: Tuesday, 00:30. This housing price indicator provides a snapshot of the health of the Australian  housing market. In Q2, the index surprised with a strong surge of 4.7%, well above the estimate of 4.7%. A smaller gain of 2.1% is expected in the third quarter.
  3. RBA Assistant Governor Guy Debelle Speaks: Tuesday, 23:30. Debelle will speak at a banking conference in Sydney. The markets will be looking for clues as to the central bank’s future monetary policy.
  4. Mid-Year Economic and Fiscal Outlook: Wednesday, 15th-17th. This report provides a report card on the government’s fiscal performance compared to the program outlined in the most recent annual budget. A positive report could bolster the Australian dollar.
  5. RBA Bulletin:  Thursday, 00:30. This indicator is released each quarter. The  report contains an  analysis of current and future economic conditions, but is  a minor report since much of the information  has already been released.

* All times are GMT.

AUD/USD Technical Analysis

AUD/USD started the week at 0.7338 and  quickly touched a  high of 0.7339. The pair then  reversed directions  and dropped to low of 0.7169, as support held firm at 0.7160 (discussed last week). The pair  closed at 0.7182.

Live chart of AUD/USD: [do action=”tradingviews” pair=”AUDUSD” interval=”60″/]

Technical lines from top to bottom:

With the Aussie posting sharp losses, we start at lower levels:

0.7533 has  remained  intact since July.

0.7440 capped the pair in August and remains key resistance.

0.7284 is an immediate resistance line.

0.7160 is a weak support line.

0.7100 is next.

The round number of 0.70 worked as a cushion in August and is  a strong  support level.

0.6899 has provided support since September.

0.6775 is the final support level for now.

 

I  am  bearish on AUD/USD

With  the markets expecting that the  Federal Reserve  will press the rate trigger next week, market sentiment will likely remain positive regarding the US dollar. The RBA has left the door open for further rate cuts, so monetary divergence will continue to weigh on the Australian dollar.

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