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AUD/USD Forecast

AUD/USD Outlook – January 11-15

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The Aussie had an excellent week, riding on good figures. The upcoming week contains important Australian employment numbers, as well as 4 other indicators. Here’s an outlook for the events in Australia and an updated technical analysis for AUD/USD, with a look upwards.

AUD/USD chart with support and resistance lines marked on it. Click to enlarge: Further reading:

Aussie Forecast

Building Approvals and Retail Sales were excellent surprises, that took the Aussie beyond resistance lines. For a rate hike, jobs and prices need to rise. We’ll know more this week:

  1. MI Inflation Gauge: Published on Sunday at 23:30 GMT. The Melbourne Institute has a good measure of inflation, and it precedes the government’s release: the figure is published monthly rather than quarterly. After dipping in October, this indicator rose by 0.3% last month. A stable rise in prices is expected this time as well.
  2. ANZ Job Advertisements: Published on Monday at 00:30 GMT. This unofficial measure of the number of advertised jobs will have a significant impact, as it serves as a warm-up towards the official employment numbers later in the week. This figure goes up and down. Two months ago, this indicator fell by 1.7%, only to leap by 5.2% last month. A more steady growth is predicted this time.
  3. Home Loans: Published on Tuesday at 00:30 GMT. Most purchases of homes are made through loans. Similar to other indicators this week, this one hasn’t been two stable. Last month’s fall of 1.4% was better than expected, but it also saw a downwards revision of the previous month’s rise. Despite the good Building Approvals last week, home loans aren’t expected to return to growth – a drop of 0.4% is predicted.
  4. NAB Business Confidence: Published on Tuesday at 00:30 GMT, and somewhat overshadowed by the home loans. National Bank Australia has shown improving business conditions in the past 6 months, reaching a score of 19 last month, the highest in 3 years. The strong score in this survey of 350 businesses is expected to stay almost unchanged this month.
  5. Employment data: Published on Thursday at 00:30 GMT. This is by far the most important event of the week. Australia saw three strong months of growth in jobs: 40,600, 24,500 and 31,200 last month. These results exceeded expectations each time, and psuhed the Aussie higher. Strong Australian employment is one of the key drivers towards an additional rate hike. Together with the Employment Change, Australia’s Unemployment Rate will be released. In the past 7 months, the Australian rate has been either 5.7% or 5.8%. In most cases, economists expected it to rise higher, as high as 6%. Last month saw a drop to 5.7%. The unemployment rate is predicted to rise to 5.8% and Employment Change to show a rise of 10.2K jobs.

AUD/USD Technical Analysis

After settling above the important 0.8950 line, the Aussie was quick to break the 0.9090 as well and used this as a support line. It eventually broke the 0.9210 line and even managed to close above it, at 0.9246.

0.9210 changed its role and is now a minor support line. Below, 0.9090 is a more significant line that the Aussie floated above. Further below, 0.8950 is an important support line, which worked as both support and resistance many times.

Further below, I’ve added 0.8735 on last week’s lines. This was the bottom during the holidays. Looking even lower, the area of 0.8477 to 0.8520 is important. After struggling to break 0.8477 on the way up, the Aussie settled above 0.8520 before continuing upwards.

Looking up, the next resistance line is major: 0.9322 was tested many times in the past, and only breached once. The peak for 2009 was at 0.9405, which is only a minor resistance line.

Even higher, the round number of 0.95 is the next resistance line – it served as such in 2008. Parity is still too far…

I remain neutral on Aussie for another week.

Australia’s high interest rate is a significant advantage, now that the risk factor doesn’t dominate the markets anymore. The reason for being neutral is the disappointing Q3 GDP. Strong employment figures, as seen last month, are necessary for the bulls to rage.

Further reading:

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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.