Home AUD/USD Forecast February 11-15

AUD/USD lost over a cent last week, as the pair closed struggled to stay above the 1.03 level. AUD/USD closed at 1.0314. There are  just five  events in the upcoming week. Here is an outlook of the events and an updated technical analysis for AUD/USD.

Some weak Australian data hurt the Aussie, as  Building Permits and Retail sales both declined. As well, market sentiment was down as the RBA hinted at further interest rate cuts, although it did not lower rates this time around. Employment Claims came in better than expected, but this was not enough to bolster the Australian currency. Consumer Sentiment looked very strong, jumping 7.7%.

Updates: Home Loans was a disappointment, declining by 1.5%. The estimate stood at 0.1%. This was the indicator’s worst showing since September, and points to weak housing sector. NAB Business Confidence rose to 3 points. This market the first time the indicator has posted back-to back readings in positive territory since May 2012.. The Australian dollar remains under pressure, as AUD/USD was trading at 1.0256. Consumer Sentiment looked very sharp, jumping 7.7%.   MI Inflation was steady, as the indicator came in at 2.2%. The previous reading was slightly lower, at 2.0%. AUD/USD is steady, as the pair settles in to the mid-1.03 line. The pair was trading at 1.0353.

 

AUD/USD graph with support and resistance lines on it. Click to enlarge:   AUD USD Forecast Feb 11-15

 

  1. Home Loans: Monday, 00:30. Home Loans has been in a slump over the past several months. In January, the indicator declined by 0.5%, well below the estimate of a 0.5% gain. The markets are anticipating a slight improvement in the upcoming reading, with an estimate of 0.1%.
  2. NAB Business Confidence: Tuesday, 00:30. Business Confidence soared in January, as the monthly indicator climbed to 3 points, its best showing since last August. A reading above zero indicates improving positions. The markets  will be hoping for another strong reading in February.
  3. Westpac Consumer Sentiment: Tuesday, 23:30. Consumer Sentiment is a leading indicator of consumer spending, which is critical for economic growth. The indicator has shown strong volatility in recent readings, and posted a modest gain of 0.6% in the previous release.
  4. MI Inflation Expectations: Thursday, 00:00. Inflation Expectations has been fairly steady, as the indicator has hovered close to the 2.0% range. Analysts utilize this indicator to help predict actual inflation trends. The markets are not expecting any significant change in the upcoming release.
  5. G20 Meetings: Fri-Sat. The G-20 meetings  include twenty of the most important economies on the world, comprised of 19 independent countries and the European Union. Switzerland was invited for the first time by Russia to participate in this prestigious event, despite not being a member. Russia claimed Switzerland will play a central role in decisions for the international financial system.

 

AUD/USD Technical Analysis

AUD/USD opened at 1.0423, and touched a high of 1.0458. The pair then fell sharply, dropping to a low of 1.0256, as the support line at 1.0230 (discussed last week) remained intact.  AUD/USD  managed to climb back above the 1.03  line, closing the week at 1.0314.

With the Aussie taking a hit last week, we begin at lower levels.  There is resistance at 1.0739.  The next  resistance line is  at 1.0605. The pair has not tested this line since September. This is followed by 1.0508.  Next, 1.0418, which was a weak line, has strengthened as the pair trades at lower levels. We next encounter resistance at 1.0371. This line was easily breached as the pair slumped. Next, 1.0326 which had provided support since November, is now providing weak resistance. It could be tested early next week if the Australian dollar can muster any sort of momentum.

AUD/USD  is receiving support at 1.0230. We next encounter support at 1.0174, which was last tested in early October. This is followed by 1.0080, which is protecting the parity level. The parity line, last tested in June, is psychologically significant and provides the next line of support. Next is 0.9917. This is followed by 0.9876, which has held firm since June of 2012. The final support line for now is 0.9785.

I am  bearish on AUD/USD.

AUD/USD  had a rough week, following the  RBA  rate announcement and  weak construction and  retail sales data. The markets are  not impressed with the  present state of the Australian economy, and  the bumpy US recovery is another reason why  investors might shy away from shy riskier assets, such as  the volatile Aussie.

The Aussie sometimes moves in tandem with gold. You can trade binary options on gold using this technical analysis.

Further reading:

Kenny Fisher

Kenny Fisher

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.