The Australian dollar showed that even a sharp contraction in the economy cannot stop it. It now faces a rate decision and employment data among other figures. Here is outlook for the Australian events and an updated technical analysis for AUD/USD. Floods in Queensland caused a huge contraction of 1.2% in Q1 2011 – the first contraction since the financial crisis. Nevertheless, there were whispers of such a downfall, and this helped the currency react quite well, especially towards the end of the week, that culminated in a terrible Non-Farm Payrolls report in the US. AUD/USD daily chart with support and resistance lines marked. Click to enlarge: MI Inflation Gauge: Monday, 00:30. With the absence of inflation numbers on a monthly basis, the figure from the Melbourne Institute provides an up to date assessment. Last month saw a return to a small rise of 0.3%, after a jump of 0.6%. A smaller rise is likely now. ANZ Job Advertisements: Monday, 1:30. ANZ counts the number of job advertisements in the media, and provides an early indicator towards the official employment numbers later in the week. The small rise of only 1% last month was a warning sign. A stronger rise is likely now. AIG Construction Index: Monday, 23:30. The Australia Industry Group provides a PMI-like indicator. Last month’s number was very bad – only 37.9 points. A recovery to above 40 points is due now. Rate decision: Tuesday, 4:30. The RBA has a tough decision this time: on one hand, prices continue rising, but on the other hand, the economy has shown significant signs of slowing down, especially with the strong currency. Glenn Stevens and his colleagues are expected to leave the Cash Rate unchanged at 4.75% and probably hint about another delay in the accompanying statement. Westpac Consumer Sentiment: Wednesday, 00:30. This survey of consumers is a bit like a see-saw: dropping for one month and rising in the next one. After dropping by 1.3% last month, a rise of a smaller scale is expected in this survey of 1200 people. Home Loans: Wednesday, 1:30. There are talks that the “Australian housing bubble” is bursting. According to this important figure, the housing sector is squeezing in the past three months, with very disappointing drops. A rise of 2.4% is now expected to follow last month’s drop of 1.5%. Employment data: Thursday, 1:30. Last month’s employment change was quite disappointing: the economy lost over 22,000 jobs, when a gain of a similar scale was expected. This hurt the Aussie. A rise of around 26K is likely now. Regarding the unemployment rate, it remained unchanged at 4.9%, and * All times are GMT. AUD/USD Technical Analysis The Aussie had a very choppy week. But all in the range of 1.0580 to 1.0775 (both lines discussed last week) characterized the trading. The pair eventually closed at the top of the range. Technical levels, from top to bottom: High above but getting closer, the line of 1.1150 might serve as resistance. The fresh float era high of 1.1012 is already a more definite line of resistance, just above the round number of 1.10. 1.0850 had a chance to work in both directions – capping the pair on the way up, and later temporary halting the pair on the way down. It proved to be quite strong just now and is of high importance. It’s followed by 1.0775 which was a previous weekly high and has now turned into tough resistance. 1.07 was a pivotal line for a third week in a room. It provided some support a few weeks ago and returns to its role now. Strong support remains at 1.0580, which capped the pair for long days and provided support just now. It will cushion any fresh falls. The round number of 1.05 is less important support now, after being pierced through earlier. 1.0440 proved to be a very strong support line after being a swing low a few weeks ago. 1.0390 was a distinctive line that worked in both directions at the beginning of April and is weak support now. A stepping stone for the Aussie on its way up was 1.0315. It is likely to be a stepping stone on the way down if the pair collapses. An important cushion is 1.0254, the 2010 high that is still far behind. I remain bullish on the Aussie. The Australian dollar survived a terrible indicator, and is now likely to find better ones – especially in the employment figures for May, which are expected to rebound. There’s more room towards the historic highs and beyond. 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 For the Swiss Franc, see the USD/CHF forecast. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. AUD/USD ForecastMinors share Read Next NZD/USD Outlook -June 6-10 Anat Dror 10 years The Australian dollar showed that even a sharp contraction in the economy cannot stop it. It now faces a rate decision and employment data among other figures. Here is outlook for the Australian events and an updated technical analysis for AUD/USD. Floods in Queensland caused a huge contraction of 1.2% in Q1 2011 - the first contraction since the financial crisis. Nevertheless, there were whispers of such a downfall, and this helped the currency react quite well, especially towards the end of the week, that culminated in a terrible Non-Farm Payrolls report in the US. 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