AUD / USD Forecast - January 16 - 20, 2012

The AUD rose over 100 pips against the USD, closing above the 1.03 level. The upcoming week is full of activity, with eight indicators being released. Here is an outlook for the Australian events, and an updated technical analysis for AUD/USD.

MI Inflation Gauge: Sunday, 23:30. The readings for the 3^rd quarter were all close to the zero level, representing basically no inflation. More of the same is likely for the January reading.

ANZ Job Advertisements: Monday, 00:30. Employment ads are a vital indicator of the need for new employees, which is a significant factor for economic growth. The indicator has risen over the past 3 readings, reaching the essential zero level in December. 

Home Loans: Monday, 00:30. This is one of the most vital indicators in the housing sector. The indicator dipped in December to 0.7%, but this was fairly better than the market foretold of 0.1%. The forecast for January is up a little to 1.0%.

Westpac Consumer Sentiment: Tuesday, 11:30. Consumer confidence indicator fell to -8.3%, its lowest reading since July, 2011. 

New Motor Vehicle Sales: Wednesday 00:30. This is one more important indicator of consumer spending and confidence in the economy. The indicator showed weak figures in the fourth quarter of 2011, with a December reading of -0.7%.

MI Inflation Expectations: Thursday 00:30. This indicator looks at the expectations among consumers as to inflation of goods and services. Slight change is predictable in the reading this month.

Employment Data: Thursday 00:30. The Employment Change indicator is pretty volatile, making correct market forecasts complicated. The reading plunged in December to -6.3K, shattering the markets, which had called for a reading of 10.3K. The market is yet again forecasting a reading of 10.3K. The Unemployment Rate indicator has been very stable at about 5%, and no change is expected for this month.

Import Prices: Friday 00:30. A raise in imports signals additional consumer expenditure and better confidence in the economy. The indicator has fallen in the past two readings, falling to the zero level in December. The market forecast for this month is a small increase to 0.6%.

* All the times are GMT.

AUD/USD Technical Analysis

Last week :
Opened at : 1.0199
Dropped to : 1.0145
Climbed to : 1.0378
Closed at : 1.0311

Technical levels from top to bottom:
1.0733 - Strong Resistance
1.0660 - Strong Resistance
1.0450 - Strong Resistance
1.0400 - Strong Resistance
1.0336 - Weak Resistance
1.0200 - Weak Support
1.0080 - Strong Support
0.9890 – Weak Support
0.9810 - Strong Support
0.9660 - Strong Support
0.9500 - Strong Support

Slightly bearish on AUD / USD

The US economy continues to gain steam, which be supposed to push AUD/USD downwards. On the other hand, the AUD has managed to hold its own against the USD in 2012, showing unexpected strength. This is doubtful to continue long-term, as economic fundamentals favor the US economy over that of Australia.