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AUD/USD Forecast July 7-11

AUD/USD Forecast, Minors, Weekly Forex Forecasts | Written By Kenny Fisher |

Created: Jul 6, 2014 13:49 GMT

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AUD/USD showed some movement in both directions but ended the week with

slight losses. The pair closed the week at 0.9352. The upcoming week is highlighted

by NAB Business Confidence and Employment Change. Here is an outlook on the

major market-movers and an updated technical analysis for AUD/USD.

US employment numbers sparkled last week, led by Nonfarm Payrolls, which hit 288

thousand. As well, the Unemployment Rate dipped to 6.1%. In Australia, Building

Approvals looked sharp but Retail Sales posted a decline.

Updates:

Jul 7, 11:08: 5 Most Predictable Currency Pairs – Q3 2014: Currency pairs are

not born equal and do not follow the same technical behavior. The better ones

will enjoy a...

Jul 7, 10:53: Dollar improvement: The rise in the dollar over the past few

sessions has coincided with a rise in bond yields, with the...

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

enlarge:

1. AIG Construction Index: Sunday, 23:30. This minor event is unlikely to have

much impact on the movement of AUD/USD. The index has posted readings

below the 50-point level all year, indicative of ongoing contraction in the

construction industry.

2. ANZ Job Advertisements: Monday, 1:30. This indicator is an important gauge

of activity on the employment front. Last month, the indicator posted a sharp

decline of 5.6%, its worst showing in three years.

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3. NAB Business Confidence: Tuesday, 1:30. This is the first key event of the

week. Business Confidence has been rising, and climbed to 7 points in the May

release. Will the upswing continue in this week’s release?

4. Westpac Consumer Sentiment: Wednesday, 00:30. Analysts closely follow

this indicator, as increased consumer confidence usually translates into stronger

consumer spending. After a steep slide in May, the indicator bounced back last

month will a small gain.

5. MI Inflation Expectations: Thursday, 1:00. Inflation expectations are often an

accurate prediction of actual inflation, so traders should keep an eye on this

release. The indicator posted a strong reading last month, with a gain of 4.0%.

6. Employment Change: Thursday, 1:30. Employment Change is one of the most

important economic indicators, and an unexpected reading can quickly affect the

movement of AUD/USD. Last month, the indicator posted its first decline since

January, coming in at -4.8 thousand. This was well off the estimate of 10.3

thousand. The markets are expecting a strong turnaround in the upcoming

release, with an estimate of 12.3 thousand. The Unemployment Rate is expected

to edge up to 5.9% from its current rate of 5.8%.

7. Home Loans: Friday, 1:30. Home Loans is a useful gauge of activity in the

housing market as well as the level of consumer confidence. The indicator has

not impressed, posting only one gain in 2014. Last month’s reading of 0.0% was

short of expectations, and the markets are expecting another weak reading in

June, with the estimate standing at -0.4%.

*All times are GMT.

AUD/USD Technical Analysis

AUD/USD opened the week at 0.9414 and quickly hit a high of 0.9505 as resistance

held at 0.9526 (discussed last week). The pair then reversed directions, dropping to a

low of 0.9328 and closing at 0.9352.

Live chart of AUD/USD:

Technical lines from top to bottom:

We start with resistance at 0.9910, which has remained firm since last May.

0.9757 marked the start of a rally by the US dollar back in October 2013, which saw the

pair drop as low as 0.8650.

This is followed by the round number of 0.9700, which has held firm since October

2013.

0.9526 provided key resistance in November 2013 and has remained intact since that

time.

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0.9442 was briefly breached but recovered and is a weak resistance line. This line

marked the high point of the pair in November, which saw the Aussie go on a sharp

slide and drop below the 0.89 line.

0.9368 was also breached as the pair lost ground before recovering. It has reverted to a

resistance role and is a weak line.

0.9282 has weakened in support. There is strong support at 0.9175.

The round number of 0.9000 is a key psychological level. It has remained intact since

early March.

The final support line for now is 0.8891. AUD/USD broke above this line in February,

and has posted strong gains since then.

I am bullish on AUD/USD.

The US dollar could ride positive sentiment after an excellent Nonfarm Payrolls. In

Australia, the RBA held rates and continues to try and talk down the Aussie, whose high

value is hurting the already weak export sector.

About 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.