The Australian dollar traded lower against the US dollar this past week, but I think the pair is soon going to create a bottom and trade higher again. There is a bullish hidden divergence on the daily time frame, which adds value to our bullish bias in the short term.
The pair has a strong up-move trend line on the 4 hour chart. There is also a support zone at 0.9220/00 levels. If the pair falls around the mentioned support zone and trend line, makes a stop and forms a bullish divergence, then we can enter into a buy trade. Remember, the highlighted support area is also around the 200 moving average on the daily timeframe.
Initial target should be around the daily 20 moving average, and final target could be around the last high. Stop should be placed below the 0.9130 level.
Major events scheduled in the upcoming week
This past week nothing major happened, as most of the major currency pairs traded in a range for almost the whole week. EURUSD was the worst performer, as despite of positive Euro zone manufacturing and services PMI the pair was unable to trade higher. The pair traded in a tight 50 pips range throughout the week. One of the best performing pairs was the GBPUSD, which climbed higher towards the 1.6820 level after the positive UK retail sales data. Some pairs like AUDUSD traded lower, as the economic data for Australia came as a disappointment.
Let us look at all major events lined up in the upcoming week.
Sunday – Japan’s retail sales data.
Monday – US pending home sales, New Zealand imports, exports and trade balance data.
Tuesday – German Gfk consumer climate, UK GDP, CB consumer confidence and Japan’s industrial production data.
Wednesday – German retail sales, German unemployment data, Euro zone inflation data, US ADP nonfarm employment change, Canadian GDP, FOMC interest rate decision and Chinese manufacturing PMI.
Thursday – UK manufacturing PMI, US initial jobless claims and US ISM manufacturing PMI.
Friday –German manufacturing PMI, Spanish manufacturing PMI, French manufacturing PMI, Italian manufacturing PMI, Euro zone manufacturing PMI, UK construction PMI, Euro zone unemployment rate, US Nonfarm payrolls and unemployment rate.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, EURGBP, USDJPY, USDCAD, EURCAD, NZDUSD, EURAUD and INDICES.
Get it HERE: Vladimir’s Markets Forecast
Happy trading friends!
