The AUD showed some movement at the end of 2011, dipping close to the parity level before rallying to end the year just shy of the 1.0200 level. The forthcoming week has four indicators to release. Here is an outlook for the Australian events, and an restructured technical analysis for Aussie.
The markets may have offer farewell to 2011, but the European debit crisis is still there, and continues to weighs heavily on risk currencies such as the AUD. Euro / Dollar ended the year 400 pips lesser, and if investors continue to collect to the US dollar for safety, the AUD could decline.
AIG Manufacturing Index: Monday, 22:30. With only one exclusion, the index
has been under 50 from August 2010. This shows that the manufacturing sector is
in poor form, and this situation seems position to carry on into 2012.
Commodity Prices: Tuesday, 5:30. Australia’s
export sector is very reliant on steady commodity prices, but the
indicator has been dipping steadily for 10 straight readings. With
a deep worldwide slowdown, this could well go on into 2012.
AIG Services Index: Wednesday, 22:30. The index has been below 50 for
the past two readings, indicating reduction in the services sector. The
index recorded its fourth successive drop in Decmber, which is undoubtedly a disturbing
downtrend.
Trade Balance: Friday, 00:30. Trade balance statistics have been downstairs for
the past three readings. From an October figure of 3.10B, which was the
high of the year 2011, the index has fallen sharply to just 1.68B in December.
The forecast for the January reading calls for an additional drop, down to
1.60B.
Technical Analysis
Aussie opened the week at 1.0143, and fell to
1.0044, before rallying to break the 1.02 level and mountaineering to
1.0268. The pair then gave back some of these gains, closing just
shy of the 1.02 level, at 1.0197.
Technical levels:
The level of 1.0733, is strong resistance. Next is the round number of 1.0500, which provided support in May and June, and is now a resistance. Below is 1.0450, which was tested in November and is a level of strong resistance. This is followed by the round number of 1.0400, which is also giving strong resistance. The next line of key resistance is at 1.0336. After helping as an significant line of resistance in December, the level of 1.0200 looks ready to drop very early in the New Year. The pair did fall to 1.0044 this week, but parity has not confirmed to be much more than a psychological barrier. Next is 0.9890, a weak support line. 0.9810 is now providing strong support to the pair. Strong support for the aussie can be seen at 0.9660, as well as the round number of 0.95, which was violated only once in 2011. The final support level for now is at 0.9376.
Still Neutral on AUD / USD
Economic indicators are undoubtedly stronger in the USA than in Australia, which would favor the USD against the AUD. However, the Aussie rose over parity this week, showing renewed strength and climbing all the way past the 1.02 level.
Tips for EUR/USD
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