AUD/USD posted slight gains last week, closing at 0.7455. There are five events this week. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
The US dollar was broadly lower as the Trump administration was racked by more scandals. Trump has been accused of interfering in an investigation by FBI director James Comey, raising suspicion of obstruction of justice by Trump. The US dollar fell on market concerns that growth-friendly policies such as tax reform and increased fiscal spending could be stalled. As well, US construction numbers were soft. In Australia, employment data sparkled, as employment change jumped and the unemployment rate dipped.
- May 25, 9:00: Technical levels to watch – last week of May 2017: The dollar dropped on Trump’s troubles but managed to recover, or at least correct. Some currency pairs have reached new highs...
- May 24, 20:01: FOMC Minutes leave hike door open but no smoking gun – USD falls: Most Fed officials saw a tightening likely appropriate “soon”. This can be seen as a hint towards a rate hike...
- May 23, 10:45: More reports about Trump’s obstruction of justice – USD to remain pressured: Less than a week has passed since the New York Times reported about the Comey memo, a report that sent...
- May 22, 12:44: Fading political risk, constructive on crude – MM #145: We start from the political storms that were only a storm in teacup for stocks. We then continue with oil...
- May 22, 0:38: Preview: Fed meeting minutes and fresh GDP data [Video]: Things are not looking that great in the US economy and the dollar begins letting it go. However, the main...
- May 22, 0:00: AUD/USD: balance tilted to the downside [Video]: The Australian dollar moved with iron ore prices, and this meant a downfall. The pair has more room to the...
AUD/USD daily graph with support and resistance lines on it. Click to enlarge:
- CB Leading Index: Monday, 14:30. This minor indicator is based on 7 economic indicators. The index has been steady, with two straight gains of 0.4%.
- RBA Assistant Guy Debelle Speaks: Monday, 17:30. Debelle will deliver remarks at an event in Basel. The markets will be listening closely for any clues regarding future monetary policy.
- MI Leading Index: Wednesday, 00:30. This minor index has been subdued in recent months, with a small gain of 0.1% in March. Will we see another gain in the April release?
- Construction Work Done: Wednesday, 1:30. The indicator continues to post declines, pointing to contraction in the construction sector. However, the decline in Q4 was just 0.2%, much better than the Q3 reading of -4.9%.
- RBA Assistant Governor Guy Debelle Speaks: Thursday, 8:00. Debelle will speak at an event in London. A speech which is more hawkish than expected is bullish for the Australian dollar.
AUD/USD Technical Analysis
AUD/USD opened the week at 0.7393 and quickly climbed to a low of 0.7455. The pair then reversed directions and climbed to a high of 0.7470, breaking above resistance at 0.7429 (discussed last week). The pair closed the week at 0.7455.
Technical lines from top to bottom
0.7835 was the high point in April 2016.
0.7749 was a cap in March.
0.7605 is next.
0.7513 has held in resistance since early May.
0.7429 has switched to a support role following gains by AUD/USD last week. It is a weak line.
0.7319 is the low point in May.
0.7223 is the next support line.
0.7105 has held since March 2016.
0.6998 is the final support level for now.
I am neutral on AUD/USD
The political turmoil in Washington has soured investors on the dollar, but minor currencies like the Aussie are unlikely to gain ground as investors have less appetite for risk.
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