AUD/USD posted strong gains for a second straight week. The pair closed at 0.7616, its highest weekly close since March. This week’s key event is the RBA minutes. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
The Aussie received a boost as the Employment Change was much stronger than expected. In the US, the Fed raised rates and the rate statement was more hawkish than expected, disregarding lower inflation.Updates:
- Jun 23, 7:50: AUD: Domestic Vs External Drivers: Where To Target? – Barclays: The rise of the Australian dollar seemed to have reached its limit. What’s next? Here is their view, courtesy of...
- Jun 21, 9:36: On fundamentals, technicals and more – interview with Dale Pinkert: I had the privilege to be interviewed by Dale Pinkert of F A C E. We talked about major currencies,...
- Jun 20, 19:25: AUD: RBA Remains Upbeat; What’s Next? – BTMU: The Australian dollar enjoyed the RBA’s upbeat message of late, as well as good economic data. However, also the Fed...
- Jun 19, 12:42: Fed faking it until they make it? + a Brexit brawl – MM #148: The Fed not only raised rated but put on very rosy glasses. We poke holes into the “off one” factors...
- Jun 19, 9:59: AUD/USD slips under 0.76 as Moody’s downgrades Australian banks: More pressure on the Aussie today after Governor Lowe kept it low. The credit rating agency Moody’s downgraded Australia’s Big...
- Jun 19, 9:08: AUD: Lowe keeping the currency low: RBA Governor Philip Lowe spoke at the 2017 Crawford Australian Leadership Forum and laid out the good, the bad and the...
- RBA Governor Philip Lowe Speaks: Sunday, 23:30. Debelle will speak at an event in Canberra. A speech that is more hawkish than expected is bullish for the Australian dollar.
- New Motor Vehicle Sales: Monday, 1:30. This consumer spending indicator posted a weak gain of 0.3% in April. Will we see an improvement in the May report?
- CB Leading Index: Monday, 14:30. The index has been steady, and edged up to 0.5% in April. This marked a 4-month gain.
- RBA Monetary Policy Meeting Minutes: Tuesday, 1:30. This is the key event of the week. The minutes provide details of the RBA meeting earlier in June, at which the bank held rates at 1.50%.
- HPI: Tuesday, 1:30. This quarterly index provides a snapshot of the level of activity in the housing sector. In Q4, the indicator jumped 4.1%, well above the estimate of 2.4%. The forecast for Q1 stands at 2.2%.
- MI Leading Index: Wednesday, 00:30. This indicator continues to hover close to the zero level. In May, the index declined 0.1%. Will the index move into positive territory in June?
AUD/USD Technical Analysis
AUD/USD opened the week at 0.7530 and dropped to a low of 0.7521. The pair then reversed directions and climbed to a high of 0.7636, breaking above resistance at 0.7605 (discussed last week). The pair closed the week at 0.7616.
Technical lines from top to bottom:
We start with resistance at 0.8075.
0.7938 is the next line of resistance.
0.7835 was the high point in April 2016.
0.7749 was a cap in March.
0.7605 is a weak support line.
0.7513 is the next support line.
0.7429 is the next support line. It switched from resistance when AUD/USD rallied in the first week of June.
0.7319 was the low point in May.
0.7223 has held since January. It is the final support line for now.
I am neutral on AUD/USD
The Fed is more hawkish than expected and the markets are looking at another rate hike in the second half of 2017, but probably not until December. The Australian economy is showing strength, boosted by improved global demand.
Our latest podcast is titled Fed faking it until they make it? + a Brexit brawl
- 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 Canadian dollar (loonie), check out the Canadian dollar forecast.
- For the kiwi, see the NZD/USD forecast.