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5 Aug 2013
AUD/USD enters heavy data week oversold and with the world leaning against it
FXstreet.com (Barcelona) - A major week of US data last week bashed the AUD/USD even on Friday when the DXY pulled back off of resistance. This week the stage is Australia’s – will it help or further crush the AUD/USD?
The AUD/USD’s fate this week? More of the same or a reprieve for the cross?
After FOMC actions / words, strong GDP, ISM Manufacturing Data and lower jobless claims, the AUD/USD was in deep trouble as traders were betting that the Fed was – despite their statement Wednesday – going to have to start their “tapering” activity due to an improving US economy. Friday’s slightly weaker non-farm payrolls data took the pressure off of rates and allowed the DXY to reverse sharply to the downside. Despite the weak DXY, though, the AUD/USD failed to lift substantially – highlighting just how weak the Aussie Dollar is versus just about every other currency.
Late Sunday / early Monday, traders were forced to react to news out of Australia this weekend that they will be holding their national elections on September 7th. The initial reaction early Monday was for the AUD/USD to gap up, but that rally quickly faded on weaker-than-expected retail sales out of Australia. The cross is currently at 0.8866- down significantly from the intra-session peak of 0.8921 and from Friday’s close of 0.8901.
With a very light US economic calendar this week, AUD/USD traders will focus instead on Australian and Chinese data – which will include:
• Australia performance of services index, house price index and trade balance late Monday / early Tuesday
• Construction performance, home loan data and a speech from an RBA governor later on Tuesday
• The monthly employment report on Wednesday
• Chinese CPI, PPI, retail sales and trade balance on Thursday, and
• Chinese industrial production early Friday
Will the data flow help the Aussie Dollar stabilize? Only time will tell - but technicians say the charts may be hinting at a temporary reprieve for AUD/USD sometime soon.
Technical outlook for AUD/USD
Technicians are still short-term bearish, but are eyeing a Fibonacci projection down at 0.8812 as a point where a fairly substantial bounce could occur in AUD/USD. Below that level no additional projections come into play until 0.8683 – which is horizontal line support on the weekly chart. Short-term resistance now comes in at Friday’s high at 0.8969 and is followed up by the 7/12 close at 0.9048.
The AUD/USD’s fate this week? More of the same or a reprieve for the cross?
After FOMC actions / words, strong GDP, ISM Manufacturing Data and lower jobless claims, the AUD/USD was in deep trouble as traders were betting that the Fed was – despite their statement Wednesday – going to have to start their “tapering” activity due to an improving US economy. Friday’s slightly weaker non-farm payrolls data took the pressure off of rates and allowed the DXY to reverse sharply to the downside. Despite the weak DXY, though, the AUD/USD failed to lift substantially – highlighting just how weak the Aussie Dollar is versus just about every other currency.
Late Sunday / early Monday, traders were forced to react to news out of Australia this weekend that they will be holding their national elections on September 7th. The initial reaction early Monday was for the AUD/USD to gap up, but that rally quickly faded on weaker-than-expected retail sales out of Australia. The cross is currently at 0.8866- down significantly from the intra-session peak of 0.8921 and from Friday’s close of 0.8901.
With a very light US economic calendar this week, AUD/USD traders will focus instead on Australian and Chinese data – which will include:
• Australia performance of services index, house price index and trade balance late Monday / early Tuesday
• Construction performance, home loan data and a speech from an RBA governor later on Tuesday
• The monthly employment report on Wednesday
• Chinese CPI, PPI, retail sales and trade balance on Thursday, and
• Chinese industrial production early Friday
Will the data flow help the Aussie Dollar stabilize? Only time will tell - but technicians say the charts may be hinting at a temporary reprieve for AUD/USD sometime soon.
Technical outlook for AUD/USD
Technicians are still short-term bearish, but are eyeing a Fibonacci projection down at 0.8812 as a point where a fairly substantial bounce could occur in AUD/USD. Below that level no additional projections come into play until 0.8683 – which is horizontal line support on the weekly chart. Short-term resistance now comes in at Friday’s high at 0.8969 and is followed up by the 7/12 close at 0.9048.