Browsing: AUD/USD Forecast

AUD/USD technical analysis ► review of the major events that will move the Australian Dollar (Aussie) during the upcoming week.

AUD/USD showed some volatility during the week, but showed little change at the end of the week. The pair closed at 0.7337. The upcoming week is very quiet, with just two events. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

The Chinese yuan’s devaluation initially hurt the Aussie, and so did the weak data coming out of Australia’s No. 1 trade partner. However, the situation improved when the crisis moved to hit the US. The Fed continues to remain mum about a rate hike, so the guessing game on the part of the markets continues. Retail Sales were strong, but employment and consumer confidence numbers were slightly lower than expected. In Australia, Business Confidence fell sharply.

Updates:

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

AUD_USD_Forecast.Aug17-21

  1. Monetary Policy Meeting Minutes: Tuesday, 1:30. The RBA will release the minutes of its last policy meeting, which took place earlier in the month. At that time, the RBA left interest rates at 2.00%, and no surprises are expected in the minutes.
  2. MI Leading Index: Wednesday, 00:30. The index is based on 9 economic indicators, but is considered a minor event since most of the data has already been released. The indicator showed little change in June, with a flat reading of 0.0%.

* All times are GMT.

AUD/USD Technical Analysis

AUD/USD opened the week at 0.7397 and quickly touched a high of 0.7440. The pair showed volatility during the week and fell as low as 0.7213, testing support at 0.7266 (discussed last week). AUD/USD closed the week at 0.7357.

Live chart of AUD/USD:


Technical lines from top to bottom:

We begin with resistance at 0.7886, which was last breached in late May.

0.7798 was an important resistance level for much of June.

0.7692 remains a strong resistance line.

0.7597 was an important support level in June.

0.7438 marked the start of a recent greenback rally, which saw the pair dip below the 0.73 line.

0.7266 continues to be busy and was tested again this week. It is currently an immediate line of support.

0.7113 has held firm since April 2009.

0.7011 was a key support level in March 2006. It is protecting the symbolic line of 0.70.

0.6931 is the final support line for now.

I am bullish on USD/AUD

Monetary divergence continues to weigh on the Aussie, as the Fed contemplates the timing of a rate hike while Australian rates remain at low levels. With no major data out of Australia this week, US numbers will have a greater impact on the movement of AUD/USD.

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