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AUD/USD posted some gains at the end of the trading week, closing at 1.0460. The upcoming week has  only five releases, highlighted by Private Capital Expenditure.  Here is an outlook of the Australian events, and an updated technical analysis for AUD/USD.

The Australian dollar received a  lift late in the week from  encouraging Chinese data. Chinese Flash Manufacturing PMI expanded for the first time in 13 months, and increased Chinese production means more demand for Australian raw materials.

Updates: Construction Work Done will be released later on Wednesday. The markets are predicting a strong gain of 2.2%. AUD/USD is steady, as the pair was trading at 1.0477. Construction Work rose 1.7%, disappointing the markets. The estimate stood at 2.4%. HIA New Home Sales jumped 3.4%, a six-month high. Private Capital Expenditure rose 2.8%, easily beating the forecast of a 2.1% gain. Private Sector Credit will be released on Friday. AUD/USD has inched downwards, as the pair was trading at 1.0462.

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

  1. Construction Work Done: Wednesday, 00:30. The indicator disappointed the markets last month, posting a slight decline. The  forecast calls for a strong rebound in November, with an estimate of a healthy 2.2% gain.
  2. HIA New Home Sales: Thursday, Tentative. HIA New Home Sales declined 3.7% in October. The  housing indicator has now reeled off three straight negative readings, indicating ongoing contraction in  the Australian housing sector. Will the indicator reverse the trend and post a gain this month?
  3. Private Capital Expenditure: Thursday, 00:30. After a very strong 6.1% gain in Q1, the  indicator weakened in Q2.  The markets are expecting a lower reading in Q3, with an estimate of 2.1%.
  4. Private Sector Credit: Friday, 00:30. This consumer and business indicator has been very steady, and posted a 0.3% gain in October. No change is expected in this month’s reading.
  5. Chinese Manufacturing PMI: Saturday, 1:00. Chinese Flash Manufacturing expanded for the first in 13 months, bolstering the aussie last week. The markets are hoping that that the upcoming  Manufacturing PMI follows suit with a strong release. The previous release came in at 50.2, and the forecast calls for a slight improvement.

* All times are GMT

AUD/USD Technical Analysis

AUD/USD opened at 1.0359, and touched a low of 1.0338, as the resistance line at 1.0326 (discussed last week) held firm. The pair  then rebounded, pushing to high of 1.0470. AUD/USD closed the week at 1.0460.

With the aussie improving last week, we begin at higher levels. There is  resistance at 1.1012. This line  has  held firm since  August 2011. Next is the line at 1.0874. We next encounter resistance at 1.0718, which has not been tested since March. Below, 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. This line held firm as AUD/USD made a strong push at the end of the week.

AUD/USD is receiving support at 1.0402. This line has seen a lot of action in November and was in a resistance role last week. Next, there  is support at  1.0326. This line has strengthened as the pair trades at higher levels. This is followed by support at 1.0230. Below, 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. The  final support line for now is  0.9815, which has held firm since June.

I am  neutral on AUD/USD.

AUD/USD has been marked by range trading for the past month, with the strong rebound at week’s end proving to be the  exception rather than the rule. After some encouraging US data, some releases, such as employment, have not been strong. If there is progress in the fiscal cliff crisis, this would be dollar negative, and the aussie could make some gains against the greenback.

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

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