AUD/USD daily graph with support and resistance lines on it. Click to enlarge:
- NAB Business Confidence: Tuesday, 1:30. Business confidence has been weak, with two straight releases of zero. Will we see any change in May?
- Westpac Consumer Sentiment: Wednesday, 0:30. Consumer confidence slowed to 0.6% in May, after a strong gain of 1.9% in the previous month. The markets are hoping for a rebound in the June release.
- MI Inflation Expectations: Thursday, 1:00. Inflation expectations often translate into actual inflation, making this Melbourne Institute indicator an important event. The indicator has been trending lower, and the 3.2% gain in April was the weakest reading since November 2016. Will the downward trend continue?
- Employment Data: Thursday, 1:30. The economy created 28.4 thousand jobs in April, after a gain of 25.7 thousand a month earlier. Both readings easily beat the estimate of 15.2 thousand. The estimate for May stands at 16.0 thousand. The unemployment rate rose to 5.2% in April, above the estimate of 5.0%. This was the highest reading since August. Unemployment is forecast to drop to 5.1% in May.
AUD/USD Technical Analysis
Technical lines from top to bottom:
The round number of 0.74 was the high point reached at the wake of December. This is followed by 0.7340, which the pair breached in late November.
0.7240 separated ranges in September and in October.
0.7165 (mentioned last week) has held in resistance since early April.
0.7085 was a low point in September.
0.6988 remained relevant during the week. It marked the low point in April.
0.6825 supported the pair in late 2016 and early 2017.
0.6744 was a low point in January.
0.6686 was a cap back in January 2000.
0.6547 was an important resistance line back in December 2008.
I remain bearish on AUD/USD
The slowdown in China continues to dampen demand for Australian exports, and there is no end in sight to the bitter U.S.-China trade war. Trade tensions have weighed on risk appetite, and the threat of U.S. tariffs on Mexico could raise risk apprehension even further and hurt risk currencies like the Australian dollar.
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