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AUD/USD  had a solid week, gaining over one cent.  The pair  closed the week at 0.9435. This week’s highlight is Employment Change. Here is an outlook of the events and an updated technical analysis for AUD/USD.

The Australian dollar has benefited from the US shutdown, which has hurt the US dollar. As well, the Aussie got a boost from the RBA,  which maintained its benchmark interest rate and hinted that it will not be reducing rates in the near future.

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

AUD/USD graph with support and resistance lines on it. Click to enlarge:     AUD USD Outlook Oct. 7-11th

  1. AIG Construction Index: Sunday, 22:30. The Construction Index continues to post readings well below the 50-level, indicating ongoing contraction in the construction industry. The August release came in at 43.7 points and no significant change is expected in the upcoming release.
  2. ANZ Job Advertisements:  Tuesday, 00:30.  This  indicator is an important gauge of activity in the  employment sector. The indicator continues to post declines, with the August release coming in at -2.0%. Another decline is expected in the September release.
  3. NAB Business Confidence:  Tuesday, 00:30. Business Confidence jumped to 6 points in the previous release, its best showing in over two years. Will the indicator follow suit with another sharp release for September?
  4. Westpac Consumer Sentiment:  Tuesday, 23:30. Consumer Sentiment has posted solid  in the post two releases. Strong consumer confidence usually translates into consumer spending, which is a key engine of economic growth. The markets are hoping for another  positive reading  in the  September release.
  5. MI Inflation Expectations:  Tuesday, 00:30. This indicator helps analysts keep track of actual inflation. The indicator weakened last month, with a gain of 1.5%. This was the lowest gain in over six years, and the markets will be looking for stronger numbers in the September release.
  6. Employment Change:  Thursday, 00:30. This market-mover is one of the most important economic indicators and is eagerly waited by the markets. The indicator has run into some trouble, with  sharp declines  in the past two releases. The  markets are expecting a strong turnaround in the  upcoming release, with an estimate of  a gain of 15.2 thousand. Will the indicator meet or beat  this  prediction? The Unemployment Rate  has been steady, and is not expected to change from  its present level of 5.8%.
  7. Chinese Trade Balance:  Saturday, Tentative. Chinese Trade Balance shot up to $28.5 billion in August, up from $17.8 billion the previous month. The markets are expecting another strong release in September, with an estimate of $25.2 billion. The Australian dollar is sensitive to key Chinese data, so this indicator could have a major impact on the direction of AUD/USD.

* All times are GMT

AUD/USD Technical Analysis

AUD/USD  started the week at 0.9298 and  dropped slightly to a low  of 0.9281. The pair then  rebounded and touched a high  of 0.9459, breaking past support at 0.9428 (discussed last week). The pair closed the week at 0.9435.

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


Technical lines from top to bottom:      

We  begin with resistance at 0.9961. This line is protecting the critical parity line. This is followed by resistance at 0.9828.

The line of 0.9751  provided  key resistance in early June and has held firm since that time.

0.9670 was a cap for the pair in late May and continues to provide strong resistance.

0.9556 has provided resistance since mid-June. At that time, AUD/USD went on a downward spiral that saw it drop below the 0.92 line.

0.9428 was breached  as the pair posted  strong gains and  has reverted to a support role. It is a weak line  and could see activity early this week.

0.9283  saw  a lot of action in  the months of June and  July, alternating between resistance and support roles. It was beached early in the week, but AUD/USD recovered and it remains support line.

0.9180  continues to provide support. It has strengthened as the pair trades at higher levels.

The  round number of 0.90 is next.  This psychologically important  level was breached in early September, when the Australian dollar started a strong rally which saw it break past the 0.95 line last week.

The final line for now is 0.8893.  This  has been a strong support line since August 2010,  when  the Australian dollar put together a strong  rally which saw it  climb  above the 1.10 line.

I  am  neutral on AUD/USD.

The slowdown in the US shows no signs of being resolved, and this has kept pressure on the US dollar. Traders have shown a more positive attitude to risky assets like the Aussie and this could enable the currency to make more gains against the US dollar. At the same time, if this week’s Australian employment numbers are not strong, the US dollar could make a move upwards.

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

Further reading: