AUDUSD Technical Analysis 2014, 03.08 - 10.08: Ranging to Reversal
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newdigital, 2014.08.02 10:26
Forex Weekly Outlook August 4-8The US dollar was the star during most of the week, although it lost some of its shine towards the end. Rate decisions in Australia, the UK, Japan and the Eurozone, Employment data, in Australia, Canada and US trade data are some of the highlight events on Forex calendar. Here is an outlook on the main market movers for this week.
The US dollar was on a roll in the past week: the excellent GDP report that showed 4% Q2 growth (annualized) and speculation about an upcoming rate hike (despite a not-too hawkish Fed) boosted the greenback. The below expectations Non-Farm Payrolls report took out some of the shine of the greenback, but the US economy continues doing well. In the euro-zone, inflation fell deeper, to 0.4%, and cast a dark cloud on not-too-shabby employment and consumption data. The pound continued falling on more weak data in what looks like a u-turn rather than a correction. Weak data in Japan helped USD/JPY move higher and weak Australian data finally sent the Aussie below 0.93. The kiwi and the loonie were not spared, but also managed to stage a recovery in an exciting week.
- Australian rate decision: Tuesday, 4:30. The Reserve Bank of Australia maintained rates at 2.5% on its last meeting in July, despite rumors of a possible rate cut. RBA Governor Glenn Stevens declared the currency was “overvalued” but kept monetary policy unchanged. Stevens noted the growth signs and the pickup in demand saying accommodative policy would continue to boost economic activity. It is unlikely that the RBA would step in again with further stimulus measures. No change in rates is expected this time.
- US ISM Non-Manufacturing PMI: Tuesday, 14:00. Service sector activity expanded slower than expected in June, reaching 56 after posting 56.3 in May, amid bleak economic outlook. Economists expected a smaller drop to 56.2. New Orders Index increased by 0.7 points to 61.2. Employment Index increased 2.0 points to 54.4. Overall, the non-Manufacturing sector reported growth in June. A rise to 56.6 is expected now.
- New Zealand employment data: Tuesday, 22:45. Unemployment in New Zealand remained unchanged at 6% in the first quarter, with an increase in labor force and the highest participation rate in New Zealand’s history. Economists expected the unemployment rate to fall to 5.8%. However, the participation rate edged up 0.4% to 69.3%, reaching a record high for New Zealand. Wages increased an annualized 1.6% (including overtime) in the March quarter, unchanged from the previous quarter. New Zealand job market is expected to rise by 0.7%, while the unemployment rate is predicted to tick down to 5.8%.
- US Trade Balance: Wednesday, 12:30. The U.S. trade deficit narrowed to $44.4 billion in May as U.S. exports expanded to an all-time high of $195.5 billion, while, imports declined slightly. The trade deficit narrowed 5.6% in May after hitting a two-year high of $47 billion in the prior month. The low trade deficit ensures better growth rate. The U.S. trade deficit is expected to shrink further to 44.2B this time.
- Australian employment data: Thursday, 1:30. Australia’s jobless rate increased to 6.0% in June following 5.9 registered in the previous month. However the labor force increased by 15,900, beating forecast for a 13,200 job addition. The number of full-time jobs declined by 3,800, and part-time employment edged up by 19,700. Australia’s participation rate climbed to 64.7% in June from 64.6% in May. Australia is expected to add 13,500 jobs, while the unemployment rate is expected to remain at 6%.
- UK rate decision: Thursday, 11:00. The Bank of England maintained its benchmark interest rates at a record low of 0.5% in July. However economic activity has greatly improved, bouncing back from a long period of stagnation, raising calls for a rate hike at the end of this year or in early 2015. BoE’s Quarterly Inflation Report will be released this month and may act as a catalyst for the more hawkish members of the committee to contemplate voting for a tightening. The BOE is not expected to change its monetary policy this time.
- Eurozone rate decision: Thursday, 11:45. The ECB kept rates on hold in July’s meeting after cutting them to boost economic growth. Mr. Draghi said interest rates will remain put for an “extended period of time in view of the current outlook for inflation“. Inflation remained at the “danger zone” below 1% in June, reaching 0.5%. However Markit’s survey shows a pickup in new orders suggesting economic activity will grow in the second half of the year. No change in rates is forecasted.
- US Unemployment Claims: Thursday, 12:20. The number of people seeking U.S. unemployment benefits edged up by 23,000 last week reaching 302,000. The reading was broadly in line with market forecast while remaining at pre-recession levels. The four-week average, a less volatile measure, fell 3,500 to 297,250, posing the lowest average since April 2006. Fewer layoffs and strong confidence in the US economic outlook strengthens the US labor market. The number of jobless claims is expected to rise to 305,000.
- Japan rate decision: Friday. The Bank of Japan decided to continue increasing monetary base at an annual pace of ¥60 trillion to ¥70 trillion and lowered its growth forecast for the fiscal year of 2014 to 1%. The pace of recovery was in line with forecasts, despite a decline in domestic demand following the consumption tax hike. The BOE forecasts economic growth will increase in the coming months. Rates are expected to remain unchanged.
- Canadian employment data: Friday, 12:30. Canadian workforce narrowed by 9,400 jobs in June after a 25,800 addition registered in the previous month. The unemployment rate increased to 7.1% following 7.0% in May. On a yearly base, Canada’s labor market increased 0.4%, the lowest growth rate since February 2010. Canada added 33,500 full-time jobs, while part-time jobs and positions held by youths aged 15-24 dropped 43,000. Youth unemployment remains a major problem. Canadian workforce is expected a job gain of 25,400, while the unemployment rate is expected to reach 7%.
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newdigital, 2014.08.04 09:16
2014-08-04 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Retail Sales]
- past data is -0.3%
- forecast data is 0.4%
- actual data is 0.6% according to the latest press release
if actual > forecast = good for currency (for AUD in our case)
[AUD - Retail Sales] = Change in the total value of sales at the retail level. It's the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
==========
Australia Retail Sales Rebound In June; Exceed Expectations
Australia's retail sales recovered more than expected in June, data from the Australian Bureau of Statistics showed Monday.
Retail turnover rebounded by a seasonally adjusted 0.6 percent month-on-month in June following the 0.3 percent decline in May. Economists had expected a 0.3 percent rebound in sales.
Sales of household goods grew the most, by 1.7 percent in June following the 0.2 percent increase in May.
Clothing, footwear and personal accessory sales recovered by 1.4 percent, after the 2.8 percent drop in May.
Other retail sales also rebounded in June, by 0.9 percent. This follows the 0.3 percent fall in May.
AUDUSD M5 : 16 pips range price movement by AUD - Retail Sales news event :
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newdigital, 2014.08.02 17:59
AUDUSD Fundamentals (based on dailyfx article)
Fundamental Forecast for Australian Dollar: Neutral- Australian Dollar May Rebound as Markets Retool Fed Policy Outlook
- Jobs Report May Overshadow RBA Rate Decision as Aussie Catalyst
The Australian Dollar faced heavy selling pressure last week, with
prices dropping through the bottom of a range that contained price
action since the beginning of June. The force behind the move lower
came from external factors: an impressively strong second-quarter US
GDP figure and an easing of the FOMC’s concern about persistently low
inflation hinted Janet Yellen and company may move swiftly to raise
rates after the QE3 asset purchase program is wound down in October.
The recovery may prove short-lived however as domestic factors return
to the spotlight. The RBA monetary policy announcement seemingly ought
to take top billing, but officials are unlikely to offer up anything
unheard of in recent months. Another restatement of the commitment to
hold rates unchanged for the foreseeable future may force a pause in
the Aussie’s recovery, but the likelihood of another strong push lower
will probably hinge on July’s employment figures. A net jobs gain of
13,200 is expected, marking a slowdown from the previous month’s 15,900
increase. Furthermore, Australian economic data has increasingly
underperformed relative to consensus forecasts since mid-April, opening
the door for a downside surprise. Such a result is likely to extend
the perceived length of the standstill on the monetary policy front,
undermining yield-based support for the Aussie and forcing prices lower
in earnest.
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newdigital, 2014.08.05 06:23
2014-08-05 01:45 gmt (or 03:45 mq mt5 time) | [cny - hsbc services pmi]
- past data is 53.1
- forecast data is n/a
- actual data is 50.0 according to the latest press release
if actual > forecast = good for currency (for aud in our case)
[cny - hsbc services pmi] = level of a diffusion index based on surveyed purchasing managers in the services industry. it's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy.
==========
china services pmi slides to flat in july
the services sector in china slipped to no change in july, the latest survey from markit economics revealed on tuesday in its latest performance of service index - which came in with a score of 50.0.
that's down from 53.1 in june.
a score below 50 signals contraction in a sector, while a reading above 50 means expansion.
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audusd m5 : 12 pips price movement by cny - hsbc services pmi news event
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newdigital, 2014.08.05 09:12
2014-08-05 04:30 GMT (or 06:30 MQ MT5 time) | [AUD - Cash Rate]
- past data is 2.50%
- forecast data is 2.50%
- actual data is 2.50% according to the latest press release
if actual > forecast = good for currency (for aud in our case)
[AUD - Cash Rate] = interest rate for overnight money market deposits. short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future
==========
Australia Maintains Record Low Interest RateThe Reserve Bank of Australia left its key interest rate unchanged once again at record-low as policymakers reiterated their thinking that the most prudent course is likely to be a period of stability in interest rates.
The monetary policy board governed by Glenn Stevens decided to keep the cash rate unchanged at 2.50 percent as widely expected. The rate has been at the current historic-low level since August 2013.
The RBA has reduced its benchmark rate by a cumulative 225 basis points since November 2011 to help the economy sustain the economic growth amid fading support from the mining boom.
Daniel Martin, an Asia economist at Capital Economics, said rate hikes are a long way off. If the RBA does make a change within the next six months, it is likely to be a rate cut.
AUDUSD M5 : 26 pips range price movement by AUD - Cash Rate news event :
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newdigital, 2014.08.03 21:01
AUD/USD weekly outlook: August 4 - 8The Australian dollar bounced off an eight-week low against its U.S. counterpart on Friday, as traders pared back their expectations for how soon the Federal Reserve will begin raising interest rates following the release of disappointing U.S. employment data.
AUD/USD hit a daily low of 0.9276 on Friday, the pair’s weakest level since June 5, before subsequently consolidating at 0.9314 by close of trade, up 0.22% for the day but still 0.86% lower for the week.
The pair is likely to find support at 0.9276, the low from August 1 and resistance at 0.9387, the high from July 30.
The U.S. Department of Labor said Friday that non-farm payrolls rose by a seasonally adjusted 209,000 in July, below expectations for an increase of 233,000.
The unemployment rate ticked up to 6.2% last month from 6.1% in June. Analysts had expected the jobless rate to hold steady at 6.1% in July.
The disappointing jobs report dampened optimism over the strength of the labor market and reduced expectations that the Federal Reserve will begin to raise rates sooner than previously thought.
The Aussie also found support after official data released Friday showed that China's manufacturing purchasing managers’ index rose to a two-year high of 51.7 in July from 51.0 in June, beating market expectations for a 51.4 reading.
Still, China's HSBC final manufacturing PMI for July ticked down to 51.7 from a preliminary reading of 52.0. Analysts had expected the index to remain unchanged.
The Asian nation is Australia’s largest trade partner.
The greenback had rallied earlier in the week, as strong economic data underlined the view that the recovery is gaining momentum. Official data on Wednesday showed that U.S. economy expanded at an annual rate of 4.0% in the three months to June, outstripping forecasts of 3.0%.
Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the Australian dollar in the week ending July 29.
Net longs totaled 39,606 contracts, up from net longs of 38,793 in the preceding week.
In the week ahead, investors will be looking ahead to Tuesday’s rate decision by the Reserve Bank of Australia, as well as highly-anticipated Australian July employment data scheduled for Thursday.
Monday, August 4
- Markets in Australia are to remain closed for a national holiday; however the country is still to release data on retail sales.
- Australia is to release data on the trade balance, the difference in value between imports and exports.
- The RBA is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the monetary policy decision.
- Later Tuesday, the U.S. is to publish data on factory orders, while the Institute of Supply Management is to release data on service sector growth.
- The U.S. is to publish data on the trade balance.
- Australia is to release data on the change in the number of people unemployed and the unemployment rate.
- The U.S. is to publish the weekly report on initial jobless claims.
- The RBA is to publish its monetary policy statement. Australia is also to release data on home loans.
- China is to release a report on its trade balance.
newdigital:
If not so we may see ranging market condition.
- Recommendation for short: watch D1 price for breaking 0.9278 support level on close bar for possible sell trade
- Recommendation to go long: n/a
- Trading Summary: ranging
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newdigital, 2014.08.07 09:50
2014-08-07 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Employment Change]
- past data is 14.9K
- forecast data is 12.0K
- actual data is -0.3K according to the latest press release
if actual > forecast = good for currency (for AUD in our case)
[AUD - Employment Change] = Change in the number of employed people during the previous month. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity
==========
Australia Jobless Rate Climbs To 6.4%
The unemployment rate in Australia was a seasonally adjusted 6.4 percent in July, the Australian Bureau of Statistics said on Thursday - touching a decade high.
The headline figure was well shy of expectations for 6.0 percent, which would have been unchanged from the June reading.
The Australian economy lost 300 jobs to 11,576,600 versus forecasts for an increase of 13,200 jobs after gaining 15,900 in the previous month.
Full-time employment increased 14,500 to 8,077,400 and part-time employment decreased 14,800 to 3,499,200.
But the participation rate inched higher to 64.8 percent, beating forecasts for 64.7 percent, which would have been unchanged.
Unemployment increased 43,700 to 789,000. The number of unemployed persons looking for full-time work increased 21,900 to 566,400 and the number of unemployed persons only looking for part-time work increased 21,800 to 222,600.
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AUDUSD M5 : 52 pips price movement by AUD - Employment Change news event
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newdigital, 2014.08.08 06:20
2014-08-08 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Home Loans]
- past data is -0.1%
- forecast data is 0.7%
- actual data is 0.2% according to the latest press release
if actual > forecast = good for currency (for AUD in our case)
[AUD - Home Loans] = Change in the number of new loans granted for owner-occupied homes. It's a leading indicator of demand in the housing market - most homes are financed, so it provides an excellent gauge of how many qualified buyers are entering the market
==========
Australia Home Loans Rise 0.2% In June
The total number of home loans in Australia was up a seasonally adjusted 0.2 percent on month in June, the Australian Bureau of Statistics said on Friday - standing at 52,153.
That was shy of forecasts for an increase of 0.6 percent following the downwardly revised 0.1 percent decline in May (originally called flat).
The value of loans added 1.8 percent on month to A$17.070 billion, following the 0.7 percent contraction in May.
Investment lending dipped 0.3 percent on month to A$10.678 billion after falling 0.9 percent in the previous month.
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AUDUSD M5 : 29 pips price movement by AUD - Home Loans news event
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D1 price was reversed from primary bullish to the primary bearish with the nearest support level as 0.9278.
W1 price is located inside Ichimoku cloud above Sinkou Span A line which is indicating the secondary ranging correction within primary bullish market condition.
H4 price is ranging between 0.9274 support and 0.9335 resistance levels with primary bearish.
If D1 price will break 0.9278 support level on close bar so the primary bearish will be continuing.
If not so we may see ranging market condition.
UPCOMING EVENTS (high/medium impacted news events which may be affected on AUDUSD price movement for this coming week)
2014-08-04 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Retail Sales]
2014-08-04 23:30 GMT (or 01:30 MQ MT5 time) | [AUD - AIG Services Index]
2014-08-05 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Trade Balance]
2014-08-05 01:45 GMT (or 03:45 MQ MT5 time) | [CNY - HSBC Services PMI]
2014-08-05 04:30 GMT (or 06:30 MQ MT5 time) | [AUD - Cash Rate]
2014-08-05 14:00 GMT (or 16:00 MQ MT5 time) | [USD - ISM Non-Manufacturing PMI]
2014-08-06 12:30 GMT (or 14:30 MQ MT5 time) | [USD - Trade Balance]
2014-08-06 23:30 GMT (or 01:30 MQ MT5 time) | [AUD - AIG Construction Index]
2014-08-07 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Employment Change]
2014-08-07 12:30 GMT (or 14:30 MQ MT5 time) | [USD - Unemployment Claims]
2014-08-08 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - RBA Monetary Policy Statement]
2014-08-08 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Home Loans]
Please note : some US (and CNY) high/medium impacted news events (incl speeches) are also affected on AUDUSD price movementSUMMARY : bearish
TREND : ranging
Intraday Chart