The Aussie closed above parity, but the Chinese rate hike announced during Christmas sure weighs on it, . The upcoming week is rather light. Here’s an outlook for the Australian events, and an updated technical analysis for AUD/USD.
When there wasn’t too much news around, the Aussie managed to edge up and conquer parity. Will it hold on to it?
AUD/USD daily chart with support and resistance lines on it. Click to enlarge:
- Private Sector Credit: Friday, 00:30. New credit that both companies and individuals take is a good gauge for economic activity. In the past three months, credit hardly grew, falling short of expectations. A rise of 0.2% is expected to follow last month’s 0.1% rise.
- Chinese Manufacturing PMI: Friday. Australia’s main trade partner has a huge influence on the Aussie. China’s purchasing managers’ index surprised with a rise to 55.2 points last month, helping the Aussie. It’s expected to proceed to 55.7 this time.
AUD/USD Technical Analysis
The Aussie gradually climbed in the past week, and quietly took parity. It stayed far enough from the 1.0080 resistance line (mentioned last week) and closed at 1.0045.
Above, 1.0080 is the next strong line of resistance, after AUD USD reached 1.0066. Above, the peak of 1.0083 reached in November provides another strong line of support. Beyond these levels, it’s uncharted territory, with 1.03 being the next line.
Looking down, AUD to USD parity now works as support, after being conquered. Below, 0.9917 was a line of resistance on the way up, and now provides minor support.
Below, 0.9840 provided support for the pair in the past week, and also was a pivotal line beforehand. It provides immediate support. Below, 0.9724 worked as support several times in recent weeks and is a strong line now.
Lower, 0.9660 is now only a minor support, but it’s still significant. Below, 0.9540 proved to be a very strong line, being a swing low a few months ago, and also two weeks ago. Even lower, 0.9465 provided support for the pair when it struggled on the way up, and is already stronger support.
The next lines are close – 0.9366 was a peak back in April, and 0.9327 capped the pair lots of times beforehand. 0.9220 was a peak earlier in the year and is the last support line for now.
I turn bearish on AUD/USD this week.
The Chinese Christmas gift for the Aussie is definitely a blow, after the markets thought that they will avoid it. With no other big events due this week, this will weigh on the Aussie.
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/Dollar forecast.
- For the Japanese yen, read the USD/JPY forecast.
- For GBP/USD (cable), look into the British Pound forecast.
- For the New Zealand dollar (kiwi), read the NZD forecast.
- For USD/CAD (loonie), check out the Canadian dollar.
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