AUD/USD was almost unchanged last week, as the pair closed at 0.9352. This week’s highlight is the RBA Monetary Policy Meeting Minutes. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
Australian employment data was a mix, as Employment Claims rebounded but the unemployment rate moved upwards. This weighed on the Aussie. In the US, the FOMC minutes did not shed any light on possible interest rate hikes, while Unemployment Claims looked sharp.
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AUD/USD graph with support and resistance lines on it. Click to enlarge:
- RBA Monetary Policy Minutes: Tuesday, 1:30. This is the major event of the week. The RBA often takes note of the high value of the Aussie, and similar sentiments in the minutes could push the Aussie lower for a short time.
- New Motor Vehicle Sales: Tuesday, 1:30. New Motor Vehicle Sales is an important gauge of consumer spending, as new vehicles are big-ticket purchases for consumers. The indicator has not looked very strong, with the May reading of 0.3% marking the strongest gain in 2014.
- MI Leading Index: Wednesday, 00:30. The index is based on 9 leading indicators, but is a minor event since most of the data has been previously released. The indicator posted a gain of 0.1%, its first gain this year.
- CB Leading Index: Thursday, 00:00. This important index, based on 7 economic indicators, can affect the direction of AUD/USD. This index also has looked sluggish, failing to post a gain in the past two releases.
- NAB Quarterly Business Confidence: Thursday, 1:30. This quarterly report is an important gauge of confidence in the business sector, which is crucial for economic growth. The indicator slipped to 6 points in Q1, down from 8 points in the previous release. Will the indicator remain at high levels in the Q2 release?
- RBA Assistant Governor Malcolm Edey Speaks: Thursday, 1:55. Edey will address a finance conference in Sydney. A speech which is more hawkish than expected is bullish for the Australian dollar.
*All times are GMT.
AUD/USD Technical Analysis
AUD/USD opened the week at 0.9359 and dropped to a low of 0.9342. The pair then reversed directions, climbing to a high of 0.9456, as resistance at 0.9442 (discussed last week) remained firm. The pair then retracted and closed the week at 0.9389.
Technical lines from top to bottom:
We begin with resistance at 0.9910, which has remained firm since last May.
0.9757 marked the start of a rally by the US dollar back in October 2013, which saw the pair drop as low as 0.8650.
This is followed by the round number of 0.9700, which has held firm since October 2013.
0.9526 provided key resistance in November 2013 and has remained intact since that time.
0.9441 was breached for a second straight week but recovered and is currently a weak resistance line. This line marked the high point of the pair in November, which saw the Aussie go on a sharp slide and drop below the 0.89 line.
0.9369 was also breached as the pair lost ground before recovering. It is providing weak support and could see action early in the week.
0.9282 is a strong support level. 0.9175 is next.
The round number of 0.9000 is a key psychological level. It has remained intact since early March.
The final support line for now is 0.8891. AUD/USD broke above this line in February.
I am neutral on AUD/USD.
Australian numbers continue to paint a mixed picture of the economy, but the Aussie remains at high levels. Recent US data has been solid, and encouraging employment figures are increasing speculation about a rate hike, which would give a boost to the US dollar. Any surprises from the RBA minutes could have an impact on the movement of AUD/USD.
- For a broad view of all the week’s major events worldwide, read the USD outlook.
- For EUR/USD, check out the Euro to Dollar forecast.
- For the Japanese yen, read the USD/JPY forecast.
- For GBP/USD (cable), look into the British Pound forecast.
- For the Australian dollar (Aussie), check out the AUD to USD forecast.
- USD/CAD (loonie), check out the Canadian dollar.
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