AUD/USD Forecast September 23-27

AUD/USD  posted  sharp gains following the Fed’s non-taper announcement, but surrendered much of those gains by week’s end. The pair  closed the week just shy of the 0.94 line, at 0.9397. This  upcoming week is very quiet, with just two releases.  Here is an outlook of the events and an updated technical analysis for AUD/USD.

The US dollar was broadly lower following the non-taper announcement by the Federal Reserve. The  Aussie posted some sharp gains,  but coughed  much of them,  thanks to strong US  releases last week, highlighted by US Unemployment Claims. Manufacturing and housing numbers also looked sharp.

AUD/USD graph with support and resistance lines on it. Click to enlarge:   AUD USD Outlook Sep. 23-27th

  1. Chinese Flash Manufacturing PMI: Monday, 1:45. Major releases out of China often affect the movement of AUD/USD, since the Asian giant is Australia’s number one trading partner. Manufacturing PMI looked excellent in July, jumping from 47.7 to 50.1 points. It was the first reading above the 50-point level since March. This figure separate between contraction and expansion. The markets are expecting another positive reading, with the estimate for the August release standing at 50.9 points.
  2. RBA Financial Stability Review:  Wednesday, 1:30.  This is the lone Australian release this week, so it is sure to be closely watched by the markets. The report assesses the financial system and examines possible risks in the system. Analysts will be looking for clues as to future monetary policy. A report which is more hawkish than expected is bullish for the Australian dollar.

* All times are GMT

AUD/USD Technical Analysis

AUD/USD  started the week at 0.9323 and dropped to a low of 0.9286, as support at 0.9283 (discussed last week) remained intact.  The pair then climbed sharply, breaking past the 0.95 line and touching a high of 0.9528. AUD/USD then retracted, closing the week at 0.9397.

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


Technical lines from top to bottom:      

We  begin with resistance at 0.9751. This was  a  key resistance line 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 spiral that saw it drop below the 0.92 line. The line faced pressure last week as the pair shot higher, but remained intact.

0.9428 had  played a strong  resistance role, but  was briefly breached last week. It is currently providing weak resistance and could be tested early next week.

0.9283  saw  a lot of action in  the months of June and  July, alternating between resistance and support roles. It held firm in a support role  last week as the pair dipped lower, prior to posting sharp gains. It is providing the pair with strong support.

0.9180  continues to provide support.  This line has some breathing room as the pair trades at higher levels.

0.9041  is the next support level. This line has seen activity in August and September, and is currently providing strong support.

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.

0.8893 has been a steady support line since August 2010,  when  the Australian dollar put together a strong  rally which saw it  climb  above the 1.10 line.

The final support line for now is 0.8747. This line  has remained in place since July 2010.

I  am  bearish on AUD/USD.

The RBA  continues to  indicate that it  wants a lower Australian dollar, and this sentiment could weigh on the currency.  Over in the US, QE tapering is on hold for now, but the Fed will press the trigger sometime in the near future. Strong US releases last week bode well for the US dollar, as the US economy continues to pick up steam.

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

Further reading:

Kenny Fisher

Kenny Fisher

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.