AUD/USD continued to sag last week and dropped 230 points, as the pair closed at 0.7319. There are only two events this week. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
The US dollar continues to post broad gains after Trump’s victory. US inflation numbers were mixed, while unemployment claims dropped to a 43-year low. Australian employment change added 9.8 thousand, but this was well short of expectations.
AUD/USD graph with support and resistance lines on it. Click to enlarge:
- RBA Assistant Governor Christopher Kent Speech: Tuesday, 7:45. Kent will speak at an event in Sydney. A speech which is more bullish than expected is bullish for the Australian dollar.
- Construction Work Done: Wednesday, 00:30. The quarterly indicator continues to struggle and has posted four straight declines, all of which missed expectations. The markets are expecting another decline in Q3, with an estimate of -1.5%.
AUD/USD Technical Analysis
AUD/USD opened the week at 0.7551 and climbed to a high of 0.7581, as resistance held firm at 0.7597 (discussed last week). It was all downhill from there, as the pair dropped to a low of 0.7319, where it closed the week.
Live chart of AUD/USD:
Technical lines from top to bottom:
With AUD/USD posting sharp losses, we begin at lower levels:
0.7691 was a cap for much of October.
0.7597 held firm in resistance.
0.7513 is next.
0.7427 marked the low point for the month of September.
0.7334 was a cap in December 2015.
0.7148 has held in support since May.
0.7020 is the next line of support.
0.6899 is the final support level for now.
I remain bearish on AUD/USD
AUD/USD has been in a downward spiral since the Trump victory, and the dollar’s momentum could continue against risk currencies like the Australian dollar. With the Fed expected to raise rates in December, sentiment towards the greenback is very favorable.
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Further reading:
- 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.