AUD/USD Forecast Nov. 19-23

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AUD/USD lost some ground, but managed to recoup most of those losses before the end of the week, closing at 1.0336. The upcoming week has just five releases. Here is an outlook of the Australian events, and an updated technical analysis for AUD/USD.

Australian releases were close to the estimates for the most part. Some weak US data put pressure on the pair, which was down slightly on the week.

Updates: CB Leading Index improved over the previous reading, but still posted a decline of 0.3%. The RBA released the minutes of its most recent monetary policy meeting. The central bank defended its decision to maintain interest rate levels, noting an improvement in global economic data. The RBA also pointed to improving growth in China as well as a moderate recovery in the US. RBA Governor Glenn Stevens spoke at an event in Melbourne. The aussie is testing the 1.04 line, as AUD/USD was trading at 1.0394. MI Leading index improved by 0.7%, a four-month high. The aussie has been edging higher, as AUD/USD was trading at 1.0375. 

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

  1. CB Leading Index: Monday, 23:00. This composite index is based on seven economic indicators. The index has been declining in recent months, and posted a drop of 0.8% in October. Will the index reverse to negative trend this month?
  2. Monetary Policy Meeting Minutes: Tuesday, 00:30. This is a record of the RBA Reserve Bank Board’s most recent meeting, and provides details regarding factors which determined the RBA’s most recent decision to maintain interest rate levels.
  3. RBA Governor Glenn Stevens Speaks: Tuesday, 7:00. The RBA Governor will deliver remarks in Melbourne. A speech which is considered more hawkish than expected is bullish for the aussie.
  4. MI Leading Index: Tuesday, 23:30. This composite index is based on nine economic indicators. The index has been quite steady, posting gains of around 0.5% in recent months.
  5. Chinese Flash Manufacturing PMI: Thursday, 01:45. This PMI has been below the important 50.0 line since last October, indicating ongoing slight contraction in the Chinese manufacturing sector. However, the previous reading came in at 49.1 points, and the markets will be hoping that the PMI will break above the 50 level in November.

* All times are GMT

AUD/USD Technical Analysis

AUD/USD opened at 1.0393, and touched a high of 1.0458.The pair then retracted, dropping to low of 1.0287. The pair rebounded to close at 1.0336, as the support line of 1.0326 (discussed last week) held firm. AUD/USD closed the week at 1.0383.

We start with resistance at 1.0874. This line has held firm since July 2011. We next encounter resistance at 1.0718, which has not been tested since March. Next, there is strong resistance at 1.0605, just above the round figure of 1.06. This is followed by resistance at 1.0508, which has held firm since mid-September. Next, there is resistance at 1.0402. This line was again breached this week as AUD/USD briefly showed some strength and pushed upwards.

AUD/USD continues to receive weak support at 1.0326. This line was breached  as the pair lost some ground, but remained in place at week’s end. The next line of support is at 1.0230. Next, there is support at 1.0174, which has held firm since early October. This is followed by 1.0080, which is protecting the psychologically important parity level. The parity line, last tested in June, is the next line of support. We next encounter support at 0.9917.

This is followed by 0.9815, which has held firm since June. Next, there is support at 0.9726. The final line for now is at 0.9627. This line was last tested in early June, when the Australian dollar started a strong rally.

I am bearish on AUD/USD.

AUD/USD has been rather quiet for the past few weeks. Is this about to change? Last week saw some weak US data, as employment numbers and consumer data were sluggish. If this continues, investors could get cold feet and flock to the safety of the greenback, at the expense of the Australian dollar.

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

Further reading:

Get the 5 most predictable currency pairs

About Author

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.

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