Home AUD/USD Forecast June 13-17

AUD/USD  ended last week almost unchanged, closing at 0.7366. This week’s highlight is Unemployment Change. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

The Aussie gained ground after the RBA rate statement, as the RBA held rates but sounded less concerned about low inflation levels. In the US, Janet Yellen gave a cautious speech and didn’t mention a timetable regarding a rate hike. US employment numbers bounced back after the awful NFP report, as JOLT Job Openings and Unemployment Claims beat expectations.

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

AUDUSD_ Daily Chart June13-17

  1. Chinese Industrial Production: Sunday, 5:30. The Aussie is sensitive to key Chinese numbers, as the Asian giant is Australia’s number one trading partner. The indicator dropped to 6.0% in April, well short of the forecast of 6.5%. Little change is expected in the May report.
  2. MI Inflation Expectations: Tuesday, 1:00. This indicator is useful in tracking actual inflation trends. The indicator dropped to 3.2% in April, compared to 3.6% in the previous release.
  3. NAB Business Confidence: Tuesday, 1:30. Strong business confidence usually is critical for the economy, as it usually leads to increased hiring and spending. The indicator edged lower to 5 points in April, down from 6 points in the March release.
  4. Westpac Consumer Sentiment:  Wednesday, 00:30. This minor report measures consumer confidence, an important component of consumer spending. The indicator rebounded in May, posting a strong gain of 8.5%.
  5. Employment Change:  Thursday, 1:30.  This is one of the most important economic indicators, and an unexpected reading can have a sharp impact on the movement of AUD/USD. The indicator posted a respectable gain of 10.8 thousand in April, but this fell short of the forecast of 12.1 thousand. The markets are expecting a stronger May report, with an estimate of 15.1 thousand. The unemployment rate is expected to remain steady at 5.7%.

* All times are GMT

AUD/USD Technical Analysis

AUD/USD  opened the week at 0.7343 and touched a low of 0.7314, testing support at 0.7334  (discussed last week). AUD/USD then  changed directions and climbed to a high of 0.7504, breaking past resistance at 0.7334.  AUD/USD then retracted, closing the week at 0.7363.

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

Technical lines from top to bottom:

0.7798 was an important resistance line for much of June 2015.

0.7692 is protecting the 0.77 line.

0.7597 is the next line of resistance.

0.7438 was tested as AUD/USD posted strong gains before retracting.

0.7334 was a cap in December 2015.

0.7192 is providing strong support.

0.7105 has been a cushion since the end of February.

0.7002 is providing support just above the psychologically important level of 0.7000. It is the final support line for now.

I am neutral on AUD/USD

The Aussie has impressed with strong gains in June. Is it time for a downward correction? The Fed will keep the markets guessing about a rate hike, although a June move would be a huge surprise. US job numbers appear to have stabilized after a dismal NFP, and market sentiment towards the US economy remains positive.

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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.