Home AUD/USD Forecast September 16-20

AUD/USD  posted some strong gains, but gave most of those up closed the week with modest gains. The pair ended the week at 0.9243. This week’s key release is the RBA Monetary Policy Meeting Minutes.  Here is an outlook of the events and an updated technical analysis for AUD/USD.

It wasn’t a very good week for either the US  or Australian releases. Australia’s Employment Change slumped to a five-month low, while in the US, retail sales and consumer confidence looked sluggish.

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AUD/USD graph with support and resistance lines on it. Click to enlarge:   AUD USD Outlook Sep. 16-20th

  1. RBA Monetary Policy Meeting Minutes: Tuesday, 1:30. Analysts will be paying close attention to this release, which is the key event of the week. The minutes will provide details of the RBA’s last policy meeting, at which time the central bank held interest rates at 2.50%. A report which is more hawkish than expected is bullish for the Australian  dollar.
  2. New Motor Vehicle Sales:  Tuesday, 1:30.  New Motor Vehicle Sales measure  the change in the purchase of cars and trucks. The indicator provides an important snapshot of consumer confidence and spending, which are critical for economic growth.
  3. CB Leading Index: Wednesday, 00:00. This indicator is based on 7 economic indicators. The July reading of -0.2% was a disappointment, as it marked the indicator’s first decline this year. The markets are hoping for a gain in September.
  4. RBA Assistant Governor Malcolm Edey Speaks:  Wednesday, 1:30. Edey will address a financial forum in Sydney. Analysts will be looking for clues as to the RBA’s future monetary policy.
  5. RBA Bulletin:  Thursday, 1:30.  This is a minor event, as most of the information has been released previously. The markets will be focusing on the part of the bulletin which contains an analysis of current and future economic conditions.

* All times are GMT

AUD/USD Technical Analysis

AUD/USD  started the week at 0.9190 and dropped to a low of 0.9167, breaking  through support at 0.9180 (discussed last week).  The pair then climbed sharply, breaking past the 0.93 line and touching a high of 0.9354. AUD/USD  was unable to hold onto these gains and closed the week at 0.9243.

Live chart of AUD/USD:   [do action=”tradingviews” pair=”AUDUSD” interval=”60″/]

Technical lines from top to bottom:      

We start with resistance at 0.9670. This line was a cap for the pair in late May.

0.9556 has provided resistance since mid-June. At that time, AUD/USD went on a spiral that saw it drop below the 0.92 line.

0.9428 had  played a support  role  since late 2011, but was breached in June and has provided strong resistance since then.

0.9283  saw  a lot of action in  the months of June and  July, alternating between resistance and support roles. It starts off the week as weak resistance and could face strong pressure if the Aussie pushes higher.

0.9180  continues to provide support.  This line was breached early in the week, but AUD/USD  recovered and it continues in a support role.

0.9041  is the next support level. This line has seen activity in August and September, and is currently providing strong support.

The  round number of 0.90 is next.  This psychologically important  level  has some breathing room as the Aussie has posted strong gains since the beginning of the month.

0.8893 has been a steady support line since August 2010, as the Australian dollar put together a strong  rally which saw it  climb  above the 1.10 line.

The final support line for now is 0.8747. This line  has remained in place since July 2010.

I  am  bearish on AUD/USD.

The RBA has  indicated that it would like a lower Australian dollar, so we could be due for a correction to the currency’s  recent sharp gains.    Over in the US, speculation  about QE tapering continues, and uncertainty leading up to the FOMC Statement could lead investors to stick with the safe-haven US dollar.

The Aussie sometimes moves in tandem with gold. You can trade binary options on gold using this technical analysis.


Further reading:

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.