With interest rate rising to 4%, the Aussie continued north. Australia’s employment figures will be watched this week, among other releases. Here’s an outlook for the Australian events and an updated technical analysis for AUD/USD.
AUD/USD graph with support and resistance lines on it. Click to enlarge:
The Aussie hardly felt the American Non-Farm Payrolls. This shows its strength, also seen in the strong Q4 growth. Let’s start the review. The technical analysis will follow:
- ANZ Job Advertisements: Published on Tuesday at 00:30 GMT. The number of job ads in papers is a good indicator for the employment situation. After two sharp rises, this indicator dropped by 8.1% last time. It’s predicted to rise once again. Since it’s released before the official job numbers, it tends to shake the Aussie, but it isn’t always correct.
- NAB Business Confidence: Published on Tuesday at 00:30 GMT and overshadowed by ANZ. National Bank Australia surveys about 350 businesses for this highly regarded survey. Optimism reached a peak in December, at 19 points and then dropped. A score similar to last month’s 15 points is predicted now.
- Westpac Consumer Sentiment: Published on Tuesday at 23:30 GMT. This bank measures the consumers – 1200 of them. This indicator isn’t stable – it fell by 2.6% after rising by 5.6% beforehand. A slower rise is predicted this time.
- Home Loans: Published on Wednesday at 00:30 GMT. The housing sector is very important for the whole economy. Home Loans tends to have a strong impact on the Aussie. Three months of drops, including two drop above 5%, are expected to end now with a rise of 2.1% in loans.
- MI Inflation Expectations: Published on Thursday at midnight GMT. The Melbourne Institute has shown that inflation expectations are tame – they softened from 3.5% to 3.2% last month. The same score is expected this time. As inflation is officially reported only once a quarter, this unofficial number is of importance.
- Employment data: Published on Thursday at 00:30 GMT. Australian employment has beaten expectations for four months in a row. Employment Change rose by 52,700 last month, more than three times the early expectations. Also the unemployment rate didn’t stay behind – it dropped to 5.3%, the lowest in a year. The unemployment rate isn’t expected to change and a gain of 15,300 jobs is expected this time. Will we have a fifth consecutive surprise?
- RBA Bulletin: Published on Friday at 00:30 GMT. This collection of economic data is what the RBA sees when making policy decisions. It’s importance is about to rise as the frequency is about to be changed to once a quarter, from once a month.
AUD/USD Technical Analysis
The Aussie climbed steadily from the 0.8850 support line up to the 0.9090 resistance line, closing higher than last week – at 0.9076.
The lines haven’t changed since last week. Below, 0.8850, 0.8735 provides additional support – it was December’s low. Even lower, 0.8567 was a support line when the Aussie was going up, and was also tested at the beginning of this year.
Looking up, if AUD/USD breaks 0.9090, the next line of resistance is at 0.9170, a line that served as temporary support. The most important line of resistance is at 0.9327, where the Aussie bounced many times in the past.
I am bullish on AUD/USD.
The rate hike and the strong growth showed the strength of the Australian economy once again. The employment data should do it this week, and help it move above 0.9090.
- For a broad view of all the week’s major event in all currencies, read the forex weekly outlook.
- For the Euro, read the EUR USD Forecast.
- For GBP/USD, look into the British Pound forecast.
- For USD/CAD, check out the Canadian dollar forecast.
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