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AUD/USD weakened during the week but ended up showing little change.  The pair closed the week just under the key 0.90 line, at 0.8995.  This week’s key release is Employment Change.  Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

Australian numbers were a mix, as Building Approvals sagged while Retail Sales beat the estimate. US employment numbers started off the week strongly, as ADP Non-Farm Payrolls and Unemployment Claims looked sharp. However, Friday’s NFP of just 74 thousand was a two-year low, and the Aussie took full advantage, gaining one cent.

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

AUD/USD graph with support and resistance lines on it. Click to enlarge:   AUD USD Forecast Jan. 13-17

  1. ANZ Job Advertisements: Monday, 00:30. The index has not been above the 50-point level since September 2011, indicating ongoing contraction in the services sector. However, we are seeing improvement, and the indicator rose to 48.9 points in November.   Will the index cross above the key 50 line in the upcoming release?
  2. Home Loans: Monday, 00:30. Home Loans continues to  show gains, having posted  just one decline since February. The previous release  came in at 1.0%, shy of  the estimate of 1.3%.  More of  the same is expected in the December release,  with an estimate of 1.1%.
  3. New Motor Vehicle Sales:  Wednesday, 00:30.  This is an important consumer spending indicator, as an increase in the purchase of  new vehicles points to  greater  consumer confidence and spending. After two straight declines, the indicator posted a strong  gain of 1.8%. The markets will be hoping for another solid gain in the  upcoming release.
  4. MI Inflation Expectations: Thursday, 00:00. This indicator, which looks at consumers’ expectations of inflation, has been steady, with the past three releases around the 2.0% level. Little change is expected for the December release.
  5. Employment Change: Thursday, 00:30. Employment Change is the highlight of the week and could affect the movement of USD/CAD. The indicator sparkled last month, jumping to 21.0 thousand, well above the estimate of 10.3 thousand. The estimate for the upcoming reading remains at 10.3 thousand. The Unemployment Rate is expected to remain unchanged at 5.8%.

*All times are GMT.


AUD/USD Technical Analysis

AUD/USD started the week at 0.8965 and  quickly dropped to a low of 0.8865. The pair then reversed directions and briefly pushed above the key 0.90 level (discussed last week), touching a high of 0.9005. The pair closed the week  at 0.8995.

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


Technical lines from top to bottom:

We  start with resistance at 0.9441. This line  marks the start of a  downward spiral in November which saw the  Australian dollar  drop close to  the key 0.90 level.

0.9283 saw a lot of action in the months of June and July, alternating between resistance and support roles. It has provided steady resistance since November.

0.9180  is the next line of resistance.  It is followed by the round number of 0.9000, which  was briefly breached last week. It is a weak resistance line which could see activity early in the week.

0.8893  saw action for a fourth  consecutive  week and  continues  in  a  support role. It has some breathing room as AUD/USD trades close to the 0.9000 line.

0.8728 was last breached in July 2010, when the Australian dollar began an extended rally that saw it climb close to the 1.10 line. This is followed by 0.8578.

0.8432  is the final support line for now. This line played a key support role in late 2009.


I am bearish on AUD/USD.

The Australian dollar  remains under pressure as the RBA would like to see the currency trade lower and a cut to interest rates remains an option. With QE a reality in the US and another taper expected in the near future, the Aussie could give up some ground.