Home AUD/USD Forecast Mar. 16-20

The Australian dollar continued its losing ways, dropping about 100 points last week. AUD/USD closed at 0.7622.  There are  six events this week.  Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

In the US, unemployment claims were sharp, but inflation and consumer confidence numbers missed expectations. Australian employment numbers met expectations.

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AUD/USD graph with support and resistance lines on it. Click to enlarge:

AUDUSD_Forecast Mar.16-20

  1. RBA Assistant Governor Guy Debelle Speaks: Sunday, 22:00. Debelle will speak at an event in Sydney. A speech which is more hawkish than expected is bullish for the Australian dollar.
  2. New Motor Vehicle Sales: Monday, 00:30. This indicator is an important gauge of consumer confidence, as an increase in the purchase of big-ticket items points to an optimistic consumer. The indicator disappointed in January, posting a decrease of 1.5%.
  3. Monetary Policy Meeting Minutes: Tuesday, 00:30. The minutes will be under close scrutiny, as the RBA surprised the markets earlier this month when it did not cut interest rates. Any hint of a rate cut could push the Australian dollar to lower levels.
  4. MI Leading Index: Tuesday, 23:30. This index is a minor event, as most of the data has already been released. The indicator has not shown much movement and posted a small gain of 0.1% in January.
  5. RBA Bulletin: Thursday, 00:30. The bulletin contains analysis of current and future economic conditions. As a minor event, it is unlikely to have much impact on the movement of AUD/USD.
  6. RBA Governor Glenn Stevens Speaks: Friday, 2:10. Stevens will speak at event in Melbourne. The markets will be looking for hints as to the RBA’s future monetary policy, and AUD/USD could respond with some volatility to Stevens’ remarks.

* All times are GMT.

AUD/USD Technical Analysis

AUD/USD started the week at 0.7721 and  dropped to a low  of 0.7560.  The pair then reversed directions and  climbed  to a  high  of 0.7740, as resistance held firm at 0.7799 (discussed last week).  AUD/USD closed the week at 0.7722.

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

Technical lines from top to bottom:

We  start with resistance at 0.8313.  This line  has held firm since mid-December.

0.8150 is the next resistance line.

0.8077 was an important resistance line in January.

0.7978 was an important cap in January 2007.

0.7799 held firm as the pair showed some strength late in the week.

0.7692 was an important support level in early 2007. AUD/USD then  recorded  a rally that saw the pair push above the 0.88 level.

0.7601 is the next support level.

0.7403 has held firm since May 2009. At that time, the Aussie was in the midst of a rally which saw it climb above the 0.94 line.

The final support line for now is 0.7283.

I  am  bearish on AUD/USD.

The Aussie continues to lose ground as the greenback shows no signs of letting up from its recent broad gains. The markets will   be keeping close tabs on the RBA minutes, and if the central bank sounds negative about the Australian economy, we could see the Aussie continue to head south.

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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.