The Australian dollar advanced nicely as trade came back to fashion once again. The upcoming week features the RBA minutes, Australian jobs and the Chinese GDP. Here are the highlights of the week and an updated technical analysis for AUD/USD.
Australia needs flowing trade to flourish. After China and the US moved from trade wars to pleasantries, the Trump Administration is also considering a return to the Trans-Pacific Partnership that Australia is part of. This pushed up the risk-on Aussie. In Australia, RBA Governor Lowe said rates will likely remain unchanged for quite some time, repeating his previous positions. In the US, the Fed meeting minutes showed confidence about the economy and about the inflation target. And indeed, core inflation really advanced to 2.1%. Concerns about Syria weighed on markets. However, after the airstrikes and the lack of any follow-up, the mood will likely be positive again.
AUD/USD daily graph with support and resistance lines on it. Click to enlarge:
*All times are GMT
AUD/USD Technical Analysis
Aussie/USD made a sharp move to the upside and challenged the 0.7780 level (mentioned last week) before closing lower.
Technical lines from top to bottom:
0.8050 capped the pair in August and also temporarily in January, on its way up. 0.7990 was the high point in February and protects the 0.80 level.
0.7890 worked as support in February and resistance in October. 0.7810 was a swing high in mid-April.
0.7730 capped the pair in early April. 0.7675 served as a line of support in mid-March.
Lower, 0.7640 was a trough in late Marc. The last line to watch is the round 0.75 level which is where the began its ascent in December.
I am bearish on AUD/USD
While the Aussie may start the week with a relief rally, the rally is stretched and a not-too-great jobs report could weigh. In addition, the recent rise in US inflation is not priced into the Aussie.
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