Forecasts
Forex Guides
Economic Stats
Members
The Koala System

AUD/USD Weekly Forecast 2 Sep 19

In the previous AUD/USD weekly forecast, we saw an attempt by the bearish momentum to take 0.67. The currency pair also failed to regain the 0.68 region again. A prolonged situation where the AUD/USD continued to remain in the sub 0.68 might see traders switching positions towards the downside.

The week saw actions taken by both sides of the US China trade war. China is a major trading partner for Australia and hence such developments might result in significant impact to the Australian economy. The Commonwealth Bank of Australia expressed an opinion that the Australian Dollar would not recover by the end of the year. In the recent RBA meeting minutes, we noted possible references to accommodating measures such as quantitative easing.

Technical Analysis

Looking at the AUD/USD weekly chart above, the currency pair closed as a doji for the week. Having said so it is important to note that overall, the AUD/USD is drifting towards the downside and this week, it did not manage to reach 0.68.

If the bullish momentum returns, we will likely be looking at a test of 0.68. This is a significant sentiment and technical region that the AUD/USD has failed to hold for the past month.

The lower bollinger band remains an influential support and hence a bearish momentum will need to decisively breach it before moving towards the 0.66 region. 0.66 is an important sentiment and technical region too.

Building Approvals Slumped

The Building Approvals turned out much lower than expected. It was predicted to be flat but turn out to be -9.7%.  The construction of a building generates many economic activities. Jobs will be created for construction workers, the various sub contractors and services associated with new buildings such as power, water, furniture and so on. This dip will likely add to the sentiment of a challenged Australian economy. This will probably lead to further speculation and apprehension that the Reserve Bank of Australia may need to take further accommodating measures such as interest rate cut or quantitative easing. It is probable that the Australian dollar will face more downside pressure.

US China Trade War Woes Continue

The Australian Dollar dipped further towards the end of the week as risk appetite retreats. President Trump is expected to implement the new tariff of 15% on certain Chinese exports and the market is usually averse towards geo political situations. As risk aversion floods the market, traditional “safe” assets such as the US dollar will usually gain in value due to demand.

If the tariff does go into effect, we may see further downside pressure on the Australian Dollar next week. China is a significant trading partner of Australia and hence any complication may be unfavorable for the Australian economy.

The Week Ahead

We are expecting many high impact economic event including the US Non-Farm Payroll.

AUS Company Operating Profits
The earnings of businesses may provide insights into the state of the economy. For example dropping earnings suggest possible economic challenges.

AUS Retail Sales
Retail sales is a fundamental component of the economy. As consumers spend, it translates to revenue and flows up stream as salaries, wholesales purchase, production orders and so on.

AUS Current Account
As a measure of money, a rising surplus suggests that the local currency is in demand by foreign traders.

AUS Cash Rate
A high interest usually generates demand while a low interest may result in dumping of the currency for better yielding alternatives. Therefore the interest rate result usually has a significant impact, especially when it is an unexpected result.

AUS RBA Rate Statement
Interest rate related statements are given much attention by analysts and investors as it has a direct impact on the currency. Investors usually favor a currency with a higher interest rate and will analyse these statements thoroughly for insights on the interest rate policy.

USA ISM Manufacturing PMI
Purchasing Managers’ Index is a survey of purchasing managers and is important as the sentiment of purchasing managers is a leading indicator of economic health. A healthy sentiment suggests that an economy is moving along well while a cautious sentiment may see less business activities due to prudence.

USA FOMC Member Rosengren Speech
Speeches may reveal new insights to economic policies or contain a question and answer segment that at times go into unscripted topics resulting in unexpected developments and volatility.

AUS GDP
Gross domestic product is a measure of the monetary market value of all the goods and services produced. It is an overall measure of economic activity and health and thus wields influence on the home currency.

USA FOMC Member Williams Speech
USA FOMC Member Bullard Speech
USA FOMC Member Evans Speech
Speeches may reveal new insights to economic policies or contain a question and answer segment that at times go into unscripted topics resulting in unexpected developments and volatility.

AUS Trade Balance
Trade balance is a measurement on trade volume and net direction. Whether a country is net import or export is important. If more exportation is done, it is likely to be beneficial for the local currency as foreign companies usually buy with the local currency. This creates demand and adds bullish pressure.

USA ADP Non-Farm Employment Change
Employment is a fundamental component of the economy as it leads to consumer spending and hence retail sales. A low unemployment rate is an indicator of a healthy functioning economy.
ADP’s statistics is based on the payroll data of approximately 400,000 U.S. business clients. Therefore it is viewed by many as a possible early indication of the US Non-Farm Payroll result.

USA ISM Non-Manufacturing PMI
Purchasing Managers’ Index is a survey of purchasing managers and is important as the sentiment of purchasing managers is a leading indicator of economic health. A healthy sentiment suggests that an economy is moving along well while a cautious sentiment may see less business activities due to prudence.

USA Crude Oil Inventories
Movement of oil supply may bring insights to the level of general economic activities. For example, an increasing supply may suggest excessive production or diminishing demand. A reducing supply on the other hand may suggest an economic pick up.

USA Average Hourly Earnings
USA Non-Farm Employment Change
USA Unemployment Rate

Employment is a fundamental component of the economy as it leads to consumer spending and hence retail sales. A low unemployment rate is an indicator of a healthy functioning economy.

USA Fed Chair Powell Speech
Speeches may reveal new insights to economic policies or contain a question and answer segment that at times go into unscripted topics resulting in unexpected developments and volatility.

There are many more events and hence it is important to follow an economic calendar. By doing so, you can reduce the possibility of an unexpected development affecting your trading plan.

Members can log in to their dashboards for an economic calendar. The latest Major Currency Pairs analysis and Price Action Bias Signals are available too.

Have you checked out our mobile applications? Get important information such as economic fundamentals or gain access to our forecasts.

Traders should always practice proper money management and seek to understand the underlying tones for the market.

Join our Telegram channel for notifications of new forecasts and more!

Don't miss out! Get your FREE Stop Losing and Start Winning in Forex Checklist and be notified when new forecasts are released!
We think you may be interested in these articles.