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AUD/USD  showed some gains early on, but ended the week almost unchanged.  There are no data releases this week, as the spotlight will be on RBA events. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

Australian New Motor Vehicle Sales improved in February, but posted a paltry gain of 0.1%. The RBA minutes indicated that the central bank is unlikely to adjust interest rates in the near future. In the US, Unemployment Claims beat the forecast for a third straight week, and Janet Yellen’s comments that interest rate could rise early next year sent the US dollar surging higher.


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AUD/USD graph with support and resistance lines on it. Click to enlarge:   AUDUSD Forecast Mar. 24-28

  1. RBA Deputy Governor Philip Lowe Speaks: Tuesday, 4:45.  Lowe will speak at two engagements in Sydney on Tuesday. Comments which are more hawkish than expected are bullish for the Australian dollar.
  2. RBA Financial Stability Review: Wednesday, 00:30. This report is released twice a year, and provides a detailed assessment of the stability of the Australian financial system. The markets will be looking for hints regarding the RBA’s future monetary policy, and any unexpected findings could affect AUD/USD.
  3. RBA Governor Glenn Stevens Speaks: Wednesday, 6:00. Stevens will address an investment conference in Hong Kong. Analysts will be listening closely for any hints regarding the RBA’s future monetary policy, particularly interest rate levels.

*All times are GMT.


AUD/USD Technical Analysis

AUD/USD started the week at 0.9029 and  quickly climbed to a high of 0.9138. The pair then  reversed directions,  dropping to a low of 0.9037, as support held firm at 0.9000 (discussed last week).  AUD/USD closed the week at 0.9020.


Technical lines from top to bottom:

We  begin with  resistance at  0.9442. This marked the high point of  the  pair in November, which saw the Aussie  go on a sharp slide and drop below the  0.89  line. This is followed by resistance at  0.9368, which was an important line in mid-November.

Next, there is resistance at 0.9283. This line  saw a lot of action in the months of June and July, alternating between resistance and support roles. It has provided steady resistance since November.

0.9180  follows. This is an important line, which has remained firm since late November.

We find support for the pair at 0.9000, which remained intact as the Aussie retracted from some early gains. This key line  is not strong  and could see action early in the week.

0.8893  is the next support line. 0.8728 marks the low point of an Aussie  rally which began in early February and pushed above the 0.90 level.

This is followed by 0.8578, which has remained intact since  July 2010.

The final  support level for now is  0.8432, which  played a key support role in late 2009.


I am  bearish on AUD/USD.

The Australian dollar remains above the key 0.90 level, but that could quickly change. The RBA noted in its minutes that the Australian dollar remains too high for its liking, and this sentiment is weighing on the currency. The continuing crisis in the Ukraine could see investors dump riskier currencies like the Aussie in favor of the safe-haven US dollar.