The Australian dollar had a roller coaster week, climbing close to 1.04 US, and then dropping near parity on the last trading day of the week, before recovering nicely. The upcoming week is quite busy in terms of economic indicators. Here is an outlook for the Australian events, and an updated technical analysis for AUD/USD. After a sluggish 2011, the Australian economy is expected to post a respectable growth rate of 4 per cent in 2012. The news from down under is not all good however, as the debt crisis in Europe will wipe out $20 billion from expected revenue over the next four years. The outlook for the Aussie is cautiously positive, as there is renewed hope that European leaders will act forcefully to get the debt crisis under control. Updates: AUD/USD is falling together with the euro (which reached an 11 month low). In Australia, the trade balance surplus was smaller than expected while home loans grew by 0.7%, more than expected. AUD/USD is holding around 1.01, but leaning lower. The bust of the Chinese housing bubble is also creating worries. Following the no news from the Fed, AUD/USD parity is at sight. The move strengthened the greenback across the board. The pair dipped below parity and stabilized around this line. AUD/USD parity is lost. The sharp drop in Westpac Consumer Sentiment (-8.3%) added fuel to the fire. MI Inflation Expectations dropped to 2.4%. More importantly, China saw another month of contraction in manufacturing according HSBC – 49 in the PMI. AUD/USD dropped to around 0.9850 before some European hope and positive American data helped it stabilize. AUD/USD graph with support and resistance lines on it. Click to enlarge: Home Loans: Monday, 00:30. After a drop to 0.0% in August, the indicator has been on the rise for three consecutive months, reaching 2.2% in November. However, the prediction for this month is down sharply to 0.2%. Will the index beat the forecast? Trade Balance: Monday, 00:30. The trade balance hit 3.10B in October, its highest level in over a year. The indicator dropped last month to 2.56B, and the forecast is for a further drop to 2.12B. Can the indicator rebound and exceed the market forecast? NAB Business Confidence: Tuesday, 00:30. This index is based on a survey of about 350 businesses, which are asked for their forecast of current economic conditions. The index dropped to -8 in September, its lowest level in 18 months. It has, however, been on an uptrend of late, reaching 2 in November. The forecast for this month is unchanged, so the markets are not expecting any sudden moves from the index. Westpac Consumer Sentiment: Tuesday, 23:30. This indicator is marked by tremendous month-to-month volatility. October’s reading was only 0.4%, but November was up sharply to 6.3%. What does the indicator have in store for this month? RBA Deputy Gov Battellino Speaks: Tuesday, 23:30. Battellino will be discussing monetary policy and interest rates at a Sydney conference. Analysts are not expecting a raise in rates, given the modest economic growth and low inflation. Any unexpected hawkish statement by the deputy governor could be bullish for the Aussie. MI Inflation Expectations: Tuesday, 11:30. The central bank has kept a tight lid on inflation in order to protect the economy. October’s reading was at 3.1%, and last month’s reading was down to 2.5%. The markets are not expecting any sudden change for this month. New Motor Vehicle Sales: Thursday, 00:30. This is an important consumer indicator, as increased car and truck sales signals improved consumer confidence in the economy. After dipping into negative territory in October, The November reading was up to 1.1%. Will the indicator make it three increases in a row? AUD/USD Technical Analysis Aussie/Dollar displayed a lot of volatility this week. The pair opened the week at 1.0238, and reached a high of 1.0380. At the end of the week, the pair dropped sharply to 1.0045, just above parity, (discussed last week) before recovering to close the week at 1.0216. Technical levels from top to bottom: We begin at the resistance line of 1.0763, followed by a minor line of resistance at 1.0661. The round number of 1.06 is the next level of resistance. Below that is 1.05, which was tested in October. Next is 1.0446, followed by the round number of 1.04, which is a strong level of resistance after being tested in October. The next line of major resistance in 1.03, which was breached several times this week. The round number of 1.02 is now providing weak support, followed by 1.0150. Parity appears to be a weak line, and is now providing support to the pair. 0.9860 is a strong level of support, followed by 0.9780. The final support level for now is 0.97. I am bearish on AUD/USD The continuing debt crisis in Europe and the global slowdown, particularly in China, are weighing on the Australian dollar. Economic indicators from the US point to further improvment in the US economy, which is bullish for the US dollar. 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 Australian dollar (Aussie), check out the AUD to USD forecast. For the New Zealand dollar (kiwi), read the NZD forecast. For USD/CAD (loonie), check out the Canadian dollar. 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. Kenny's Google Profile View All Post By Kenny Fisher AUD/USD ForecastMinors share Read Next USD/CHF Outlook Dec. 12-16 Kenny Fisher 11 years The Australian dollar had a roller coaster week, climbing close to 1.04 US, and then dropping near parity on the last trading day of the week, before recovering nicely. The upcoming week is quite busy in terms of economic indicators. Here is an outlook for the Australian events, and an updated technical analysis for AUD/USD. After a sluggish 2011, the Australian economy is expected to post a respectable growth rate of 4 per cent in 2012. 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