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AUD/USD  dropped  90  points last week, as the  pair closed just above  the  0.75 line. This week has  six events on the calendar.  Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

The  US dollar gained ground thanks to  hawkish comments  released by various Fed officials, leaving an April hike  a real possibility  and contrasting the  very dovish sentiment aired in the decision from the previous week. US Final GDP beat expectations with a gain of 1.4% in the four quarter.

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

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

AUDUSD_ Daily Chart Mar28-Apr1

  1. HIA New Home Sales: Thursday, 00:00. This indicator provides a snapshot of the strength of the housing sector. In January, the indicator posted a gain of 3.1%, compared to a 6.0% gain a month earlier.
  2. Private Sector Credit:  Thursday, 00:30. Private Sector Credit has been very steady, posting two straight readings of 0.5%. Another reading of 0.5% is forecast for the upcoming release.
  3. AIG Manufacturing Index: Thursday, 22:30. The indicator continues to point to expansion and improved to 53.5 points in February. Will the upswing continue in the March report?
  4. Chinese Manufacturing PMI:  Friday, 1:00. This PMI has been pointing to contraction, underscoring weakness in the manufacturing sector due to the Chinese slowdown. The index dipped to 49.0 points in February, and another weak reading is expected in March, with an estimate of 49.3 points.
  5. Caixin Manufacturing PMI:  Friday, 1:45. This PMI has not indicated expansion since February 2015, indicating a manufacturing sector in trouble. The estimate for March stands at 48.3 points.
  6. Commodity Prices:  Friday, 5:30. Commodity Prices continues to post sharp declines, as weak global conditions have resulted in diminished demand for Australian exports. The February reading came in at -21.6%, and another sharp drop is expected in March.

* All times are GMT

AUD/USD Technical Analysis

AUD/USD  started the week at 0.7593 and  climbed  to a  high of 0.7649, as resistance held at 0.7692 (discussed last week). The pair then reversed sharply and dropped to a low of 0.7477. AUD/USD closed the week at 0.7503.

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

Technical lines from top to bottom:

We  start with resistance at 0.8025.

0.7886 was last  breached in late May 2015.

0.7798 was an important resistance line for much of June 2015.

0.7692 held firm as the pair pushed upwards before retracting.

0.7597 is next.

0.7438 is an immediate support level.

0.7334 was a cap in mid-December.

0.7243 is next.

The round number of 0.71 is the final support level for now.

I am  bearish on AUD/USD

The flurry of hawkish statements from Fed members last week indicates that the Fed is actually not so dovish, which is bullish for the US dollar. We’ll hear from Janet Yellen next week, and the US dollar could gain ground if she leaves the door open to an April or June rate hike.

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