In the previous weekly and midweek reviews, we noted that the AUD/USD was approaching a significant resistance region that featured previous rejections. Should this be so again, we might see an opportunity for downside momentum.
Looking at the AUD/USD weekly chart above we note that the currency pair was also flat for the week. As mentioned in our midweek update, it did attempt to test the 0.71 and failed.
The subsequent easing brought the currency pair back below 0.71. This is inline with the Price Action Bias Signals for AUD/USD. At the beginning of the week, we updated the signal from slightly bearish to neutral. While we are definitely pleased 🙂 with the performance of the signal so far, we will like to gently remind again that nothing in forex is 100%. The Price Action Bias Signals analysis only serves as an indication of possibility. Members should take advantage of this proprietary feature and log in to your dashboards when the week starts to see the latest updates.
In the week ahead, we expect the lower and middle bollinger bands to function as immediate support and resistance. This is along with the sentiment regions of 0.7 and 0.71.
In the latest release from the Reserve Bank of Australia, it was mentioned that economic risks from the housing market has increased. In the Housing Price Index released early week, it came in worst than expected at -2.4% instead of the estimated -1.9%. Having said so the RBA does not see it as a systemic issue at the moment. This cautious tone did bring increased speculation on rate cuts. More analysts see that happening in the mid term and especially if job data continues to disappoint.
Australian Jobs Lacking
The unemployment rate came out better than expected and it slipped from 5% to 4.9%. Many people might have seen it to be a possible development but upon closer look at the actual jobs data, things are different. It came in at 4600 instead of the expected 14800.
Employment is a fundamental component of an economy. If the figures show a slow down, the consequences will flow downstream. Negative sentiment towards the Australian dollar likely increased.
Next week brings many scheduled speeches by members of both the US Federal Reserve and Reserve Bank of Australia. In such events, questions posed may go off script and reveal new insights to policies. This may result in increased volatility.
The US is also scheduled to release the latest survey on Consumer Confidence and the Gross Domestic Product data among many of the other releases by both countries. It is always prudent to follow an economic calendar and members can log in to their dashboards for one. As always, do practice proper money management.