The Australian dollar traded lower against the US dollar, and might be heading towards the last swing low. However, there are many signs emerging of a bottom in the short term. We need more confirmation before we can consider a buy position. If we get a confirmation of strength in the Australian dollar, then we can plan for a buy trade moving ahead.
There is an important bearish trend line forming on the 4 hour chart of the AUDUSD pair. There is also a resistance around the 0.8780-0.8800 area. If the pair surges higher, breaks the mentioned resistance confluence area and then make a correction to retest the broken resistance area, then we can enter into a buy trade. Remember, we need not to rush into a trade as the pair might continue heading lower.
Initial target should be around the 0.8920 level, and final target could be around the 0.9000 level. Stop should be placed below the last low created.
Major events scheduled in the upcoming week
The US dollar was the key driver during this past week, as it literally dominated the currencies such as the Euro, British pound, New Zealand dollar and the Australian dollar. The economic releases were on the positive side, and ignited a rally in the US dollar. The US new home sales figures were the highlight of this week, as it registered a massive increase of 18% in August. The EURUSD pair fell below the 1.2750 support area and traded close to the 1.2650 level. The AUSUSD pair also lost a lot of ground along with the NZDUSD pair. The Japanese yen too suffered heavy losses during this past week, especially against the US dollar.
Let us look at all major events lined up in the upcoming week.
Sunday – No economic release.
Monday – German CPI, US pending home sales data, Japanese industrial production data and Chinese HSBC manufacturing PMI.
Tuesday – German retail sales, German unemployment data, UK GDP data, Euro zone CPI, Canadian GDP, CB consumer confidence, Australia’s retail sales and Chinese manufacturing PMI.
Wednesday –German manufacturing PMI, Italian manufacturing PMI, French manufacturing PMI, Euro zone manufacturing PMI, US ADP nonfarm employment change, US ISM manufacturing PMI and Australia’s trade balance data.
Thursday – US construction PMI, ECB interest rate decision and US initial jobless claims.
Friday –German services PMI, Italian services PMI, Spanish services PMI, Euro zone services PMI, Euro zone retail sales, US non-manufacturing PMI, US nonfarm payrolls data and US unemployment rate.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GBPCHF, EURGBP, USDJPY, EURJPY, GBPJPY, AUDUSD, NZDUSD, AUDNZD, EURAUD, USDCAD and AUDCAD.
Get it HERE: Vladimir’s Markets Forecast
Happy trading friends!
