The Australian dollar was up sharply at the end of the week, gaining almost two cents against its US counterpart, as the pair closed the week at 1.0231. The upcoming week is quite busy, with 11 releases. Here is an outlook for the Australian events, and an updated technical analysis for AUD/USD. The aussie followed most other currencies, and rallied against the greenback following the unexpected measures announced at the EU Summit. The Summit leaders announced steps designed to combat the debt crisis and aid struggling members, notably allowing for the direct recapitalization of banks from Euro-zone rescue funds. Updates: Chinese Manufacturing PMI posted a figure of 50.2 points, just above the market forecast of 49.9. In Australia, the Manufacturing Index hit a three-month high, climbing to 47.2 points. The index has been stuck below the 50 point line since February, indicating ongoing contraction in the manufacturing sector. The Inflation Gauge (CPI) posted a rare contraction, with a reading of -0.2%. This was the largest index’s largest decline in over three years. AUD/USD is up slightly, as the pair was trading at 1.0266. Commodity Prices continued on a steep downswing, declining by 10.5%. This is an alarming trend, given that commodities make up more than half of Australia’s exports. Building Approvals stunned the markets, jumping by 27.3%. The market estimate stood at 5.1%. As expected, the RBA maintained the benchmark interest rate at 3.50%. AUD/USD was unchanged, as the pair was trading at 1.0260. The Services Index climbed to a five-month high, recording a reading of 48.8 points. The index has been below the 50 point level since February, indicating sustained contraction in the services sector. Retail Sales rebounded from a weak reading in May, posting a 0.5% gain. This beat the market forecast of 0.2%. The aussie showed some strength as it briefly crossed the 1.03 line before retracing. AUD/USD was trading at 1.0276. Trade Balance improved to a four-month high, but still recorded a deficit. The indicator posted a figure of -0.29 billion, well above the market forecast of -0.51B. The aussie strengthened, as China cut its deposit rate by 0.25%, to 3%. AUD/USD pushed above the 1.03 line, and was trading at 1.0312. The pair has not traded at these levels since early May. AUD/USD graph with support and resistance lines on it. Click to enlarge: Chinese Manufacturing PMI: Sunday, 1:00. This key indicator came in slightly above the market forecast, which is good news for Australia, as China is its number one trading partner. AIG Manufacturing Index: Sunday, 23:00. The index has been on a downswing since January, and posted a weak reading of 42.4 points in June. Will the index break the slide and rebound upwards in July? MI Inflation Gauge: Monday, 00:30. Inflation has been steadily dropping, and the indicator recorded a flat 0.0% in the June reading. A contraction this month would show indicate a further decrease in economic activity, and could hurt the aussie. Commodity Prices: Monday, 6:30. This index has been a sustained downswing since early 2011. The index contracted by 9.9% in June, and another weak reading is bearish for the Australian dollar. Building Approvals: Tuesday, 1:30. This key indicator shows a lot of volatility, making accurate market predictions a tricky task. The previous reading was an awful -8.7%, but the market estimate for the July reading stands at a healthy gain of 5.1%. Will the indicator meet or beat this month’s forecast? Cash Rate: Tuesday, 4:30. An unexpected rate decision can have a strong impact on the Australian dollar, as we saw in May. The markets are forecasting no change in the benchmark interest rate, which currently stands at 3.50%. RBA Rate Statement: Tuesday, 4:30. Analysts will be combing through this report to which details the rate decision and the economic factors which led to the central bank’s decision. The report may also provide hints as to future monetary policy. AIG Services Index: Tuesday, 23:30. This index has been below the 50 point level since February, indicating sustained contraction in the services sector. The index did rise last month, climbing to 43.5 points. Will the index continue to improve in the July release? Retail Sales: Wednesday, 1:30. Retail Sales disappointed the markets with a 0.2% decline in June. The markets are expecting a reversal in the July reading, with an estimate at 0.3%. Trade Balance: Thursday, 1:30. Trade Balance has been posting a monthly deficit since February. This is expected to continue, with a further drop predicted for the July reading. AIG Construction Index: Thursday, 23:30. The construction industry is in a sustained contraction, with the past two readings close to 35 points. No significant change is expected in July. * All times are GMT AUD/USD Technical Analysis AUD/USD opened just above parity, at 1.0039. The pair briefly touched below parity, dropping to a low of 0.9968. The aussie then shot up to a high of 1.0258. The pair closed the week at 1.0231, a notch above the resistance line of 1.0230 (discussed last week). With the surge by the Australian dollar, we start at higher levels. There is strong resistance just above the round figure of 1.06, at 1.0605. This is followed by resistance at 1.0557, which has held firm since May 2011. Next, the line of 1.0482 is providing resistance. This line has held firm since March. Below, there is resistance just above the 1.04 line, at 1.0402. This line saw a lot of movement before the aussie’s sharp slide in May. Close by, 1.0340 is the next line of resistance. Below, 1.0230 was breached this week , and we could see further movement at this level, as the pair closed the week at 1.0231. Close by, 1.0174 has now reverted to a support role after the strong upswing by the Australian dollar. Below is the line of 1.0080, which is now providing support to AUD/USD. Next, is the psychologically important parity level, which saw some movement this week. The next support level is 0.9917, which has strengthened as the pair trades above the 1.02 line. Next, there is support at 0.9860. This is followed by 0.9780, which has held firm since last November. The next support line is 0.9668. This is followed by support at 0.9580. Since dropping to this level in the first week of June, AUD/USD has rebounded in impressive fashion. The final support line for now is just above the 0.94 level, at 0.9405. I am neutral on AUD/USD. The Australian dollar had a big gain after the EU Summit, but this spike is likely to prove a temporary blip. Australia continues to suffer from the global slowdown, and the turmoil in the Euro-zone and weakness in the US economy will not disappear anytime soon. However, unexpected news, the type of which we witnessed at the EU Summit, can quickly affect the direction of the unpredictable Australian dollar. The Aussie sometimes moves in tandem with gold. You can trade binary options on gold using this technical analysis. 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 forecast. 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 ForecastWeekly Forex Forecasts share Read Next EUR/USD Outlook July 2-6 Yohay Elam 10 years The Australian dollar was up sharply at the end of the week, gaining almost two cents against its US counterpart, as the pair closed the week at 1.0231. The upcoming week is quite busy, with 11 releases. Here is an outlook for the Australian events, and an updated technical analysis for AUD/USD. The aussie followed most other currencies, and rallied against the greenback following the unexpected measures announced at the EU Summit. The Summit leaders announced steps designed to combat the debt crisis and aid struggling members, notably allowing for the direct recapitalization of banks from Euro-zone rescue funds. 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