After a very busy week in which the Aussie reached historic levels, 5 figures are expecting Aussie traders. 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:
At the beginning of the week, the RBA disappointed some trader by not lifting the rates. Later, another round of impressing employment figures sent AUD/USD to a 27-year high, aiming at parity. How will trade this week? Let’s start:
- Home Loans: Published Monday at 00:30. This figure supplies a strong start for the week. The number of new home loans has been volatile in recent months. After a big dive of 3.2%, a rise of 1.7% corrected the picture. The housing sector slowed down after the series of rate hikes. A small rise is expected now – 1.1%.
- NAB Business Confidence: Tuesday, 00:30. National Bank Australia has shown that optimism is on the rise. Steady drops sent the score to only 2 points, hardly optimistic, before jumping last month to 11 points. A similar figure is expected now.
- Westpac Consumer Sentiment: Tuesday, 23:50. Contrary to businesses, reflected in the previous indicator, consumers became less optimistic last month. This survey of 1200 consumers dropped by 5% after two months of rises. Westpac is expected to show a rise this time.
- Chinese Trade Balance: Wednesday morning. Australia’s main trade partner is under serious global pressure to revalue the yuan. The artificially low value of the yuan is reflected in the huge trade balance surplus it has – 20 billion. This is expected to widen this time. A bigger surplus is better for Australia, but the forecast is for 17.3 billion.
- MI Inflation Expectations: Thursday 00:00. The Melbourne Institute’s indicator fills in the gap that is made by the government – official CPI figures are released only once per quarter. After dropping steadily to annual price rise of 2.8%, expectations grew again and reached 3.1% last month. A similar figure is expected now.
* All times are GMT.
AUD/USD Technical Analysis
After a bad start to the week, the Aussie moved forward and broke the historic 0.9849 line (mentioned in last week’s outlook) and peaked at 0.9917. It had a hard time holding on to it, and eventually fell and closed at 0.9846, just below the important line.
Looking down, 0.98 was a resistance line in 2008, and now provides minor, immediate support. Below, 0.9750 capped the pair on its way up and now works as strong support.
Lower, 0.9650 provided support after the Aussie climbed higher. It’s followed by 0.96, which worked as resistance beforehand. The next line of support is 0.9465, which capped the pair for a few days in September, and immediately afterwards provided strong support.
The next lines below are 0.9366, which was a peak back in April, and 0.9327, which worked as fierce resistance several times during the past year. The Aussie jumped above this line on a weekend gap.
I am bullish on the Aussie.
The fresh employment figures were very convincing about the strength of the Australian economy. The unchanged interest rate seems like Australia’s participation in the currency war rather than from internal reasons. The risk comes from a significant revaluation of the Chinese yuan, but despite the global pressure, this probably won’t happen this week.
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 forecast.
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