AUD/USD Forecast January 30, 2012, Technical Analysis

AUD/USD rose again on Friday as the Dollar continues to get sold off. The bad GDP numbers out of the United States certainly did nothing to inspire confidence in the economy, and as a result, traders went to other countries to look for yield. The Aussie has been strong lately, and has even broken out of a massive triangle that measures for a move up to the 1.12 level. The pair could pullback in the near term, and if it does – we would be buying those dips. We will not consider shorting this pair until we close well below the 1.04 level. 

AUD/USD Forecast January 30, 2012, Technical Analysis
AUD/USD Forecast January 30, 2012, Technical Analysis

AUD/USD Forecast for the Week of January 30, 2012, Technical Analysis

AUD/USD had a strong week as traders continue to pile into the Aussie. The Dollar got sold off after the Federal Reserve announced an extension of their ultra low interest rate policy on Thursday which absolutely pummeled the value of the Greenback against almost everything. The triangle on the daily chart suggests a move to 1.12, and with the easy money coming out of the United States, this is no longer such a wild thought. The 1.07 level is just above, but that resistance should give way. We are buying the pullbacks in this pair as long as we are above the 1.04 level.

AUD/USD Forecast for the Week of January 30, 2012, Technical Analysis
AUD/USD Forecast for the Week of January 30, 2012, Technical Analysis

AUD/USD Fundamental Analysis Jan. 30, 2012 Forecast

Economic Events: (GMT)

Close of Asian Markets

There are no economic events  or reports due in Australia today.

13:30     USD       Core PCE Price Index (MoM)

13:30     USD      Personal Spending (MoM)

The Core Personal Consumption spending (PCE) Price Index measures the changes in the price of goods and services purchased by consumers for the purpose of consumption, excluding food and energy. Prices are weighted according to total expenditure per item. It measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation. 

Personal Spending measures the change in the inflation-adjusted value of all spending by consumers. Consumer spending accounts for a majority of overall economic activity. However, this report tends to have a mild impact, as government data on retail sales is released about two weeks earlier. 

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

 21:45    NZD      Building Consents (MoM)

Building Consents (also known as Building Permits) measures the change in the number of new building consents issued by the government. Building consents are a key indicator of demand in the housing market.

A higher than expected reading should be taken as positive/bullish for the NZD, while a lower than expected reading should be taken as negative/bearish for the NZD.

 23:30    JPY        Unemployment Rate     

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month. The data tends to have a muted impact relative to employment data from other countries because the Japanese economy is more reliant on the industrial sector than personal spending.

A higher than expected reading should be taken as negative/bearish for the JPY, while a lower than expected reading should be taken as positive/bullish for the JPY. 

 23:50    JPY        Industrial Production (MoM)

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

A higher than expected reading should be taken as positive/bullish for the JPY, while a lower than expected reading should be taken as negative/bearish for the JPY.

Analysis and Recommendation:

AUD/USD  was trading at 1.0620 

Open     1.0633   High       1.0640   Low        1.0593

The Aussie was down against the U.S. Dollar on Friday. The USD picked up a bit of steam overnight.

The pair will likely find support at 1.0429, and resistance at 1.0688.

The Australian Dollar was down against the Euro and the Japanese Yen also.

 

Scheduled Sovereign Bond Sales

Jan 30  10:10  Italy   BTP/CCTeu auction

Jan 30  10:10  Norway  Nok 4.0bn 5.0% May 2015 bond

Jan 30  11:00  Belgium  OLO Auction

Jan 30  12:00  Norway  Details bond auction on Feb 06

Jan 31  10:30  Belgium  Auctions 3 & 6M T-bills

Jan 31  15:30  UK  Details gilt auction on Feb 07

Feb 01  10:10  Sweden  Auctions T-bills

Feb 01  10:30  Germany  Eur 5.0bn 2.0% Jan 2022 Bund

Feb 01  10:30  Portugal  Eur 0.75-1.0bn 3M T-bill

Feb 01  10.30  UK  Auctions 5.0% 2025 conventional Gilt

Feb 01  15:30  Sweden  Details nominal bond auction on Feb 08

Feb 01  16:00  US

Announces details of 3Y Notes on Feb 07, 10Y Notes on Feb

08 & 30Y Bonds on Feb 09

Feb 02  09:50  France  OAT Auction

Feb 02  10.30  UK  Auctions 0.125% 2029

AUD/USD Forecast January 27, 2012, Technical Analysis

 

The AUD/USD pair surged again on Thursday as the “risk on” trade continues. The fact that the Federal Reserve is promising to keep rates ultra low until the end of 2014 continues to put in a bid for commodities, and as the Aussie dollar is a commodity currency it makes a lot of sense that this pair finally broke out.

The triangle that is on the chart clearly had us going higher once it was broken to the upside, and it was perfectly formed at the 1.04 level – always  a clean situation in which to make your trading assessment. The pair action broke out before the Federal Reserve said it was going to keep rates low, and once they did – it only rose further. However, the candlestick for Thursday is a shooting star, and this shows that the pair is likely to fall in the short term.

The 1.07 area was mentioned in previous videos as potential resistance areas, and the top of the Thursday range showed this to be true. However, with the underlying fundamentals favoring the inflation trade – this pair should only be bought. Of course, the chart can do whatever it wants, so we have to wait to see if the “line in the sand” gets crossed. For us, it is the 1.04 level. A daily close below that has us rethinking the whole situation with the pair.

In the meantime, we are hoping to see supportive candles at either 1.05 or 1.04 in order to buy from. The 1.04 area should be very strong, but in these types of breakouts, you often won’t get back to the original breakout. This is why we mention the 1.05 level. However, with the strength in this market, we are not willing to sell this pair at the moment. The buying of Aussie on the dips is the way we are moving forward this year.

The gold markets will also be a tell as well in this market. As long as the gold markets rise, this pair will as well. The pair could become a longer-term trade as well, as the measurement of the triangle does suggest that the pair will go to 1.12 sooner or later. With that, we are looking forward to a long standing trade – assuming we are above 1.04 in the mean time. However, all things look good presently, and we are much more comfortable buying.

AUD/USD Forecast January 27, 2012, Technical Analysis
AUD/USD Forecast January 27, 2012, Technical Analysis

US Markets Up USD Down

The greenback continued to drop against most major currencies today continuing losses after a two major U.S. economic reports showed jobless claims and durable-goods orders jumped. One positive and the other negative.

The move downward spiral comes the day after the Federal Reserve said interest rates may remain at current levels until late 2014, reducing the appeal of the USD to international investors, regardless of the positive comments about growth and the economy.

The dollar index dropped to 79.248, and is well below its 80.131 level ahead of the Fed’s policy announcement.

In a news conference, Chairman Ben Bernanke said expanding its balance sheet remains an option and the central bank stands ready to ease further if the outlook worsens. Bernanke said it’s too early to say strong growth is here to stay. As for the bonds the Fed already holds, he said sales of those have been pushed back to 2015.

The two reports released in the US today, showed new applications for unemployment climbed sharply last week. Jobless claims climbed by 21,000 to a seasonally adjusted 377,000 in the week ended Jan. 21, the Labor Department said Thursday. Claims from two weeks ago were revised up by 4,000.

The number of claims varies in January due to holiday temporary hiring’s despite government efforts to adjust for seasonal factors.

The markets pay more attention to the four-week average which showed claims fell slightly, down 2,500 to 377,500.

The second report release was on durable goods, where stronger orders for airplanes and machinery translated into a better-than-expected 3.0% increase in durable-goods orders in December.

As investors look closely through the recent data for any sign of improvement, the manufacturing sector remains a decidedly bright spot for the U.S. economy.

Durable goods are defined as big-ticket items such as cars, planes, appliances, furniture and computers designed to last at least three years…

The Fed’s move Wednesday and subsequent remarks by Federal Reserve Chairman Ben Bernanke served to spur risk appetite, lifting commodities and equities while the dollar weakened. The increase in durable goods supports a strong view of US growth. US markets have climbed on the news.

The FOMC Statement Heard Around The Globe

On Wednesday afternoon, in the US or in late evening in Europe, the Federal Reserve Open Market Committee made their most recent statement and comments on the US economy and their forecast for interest rates in the US.

Most foreign exchange analysts, traders and professionals pay close attention to this statement, they read and interpret every nuance of the presentation, to understand exactly what the US Fed is trying to tell the public, but they also try to figure out what they are thinking and what they might be doing in the near future. Newscasters, Reports, Market Analysts, Economist and Brokers all spend have their own interpretation of the words that make up the carefully crafted statement.

Wikipedia defines and explains  The Federal Open Market Committee (FOMC), as a committee within the Federal Reserve System, is charged under United States law with overseeing the nation’s open market operations (i.e., the Fed’s buying and selling of United States Treasury securities). It is the Federal Reserve committee that makes key decisions about interest rates and the growth of the United States money supply. It is the principal organ of United States national monetary policy. The Committee sets monetary policy by specifying the short-term objective for the Fed’s open market operations, which is currently a target level for the federal funds rate (the rate that commercial banks charge between themselves for overnight loans).

The FOMC also directs operations undertaken by the Federal Reserve System in foreign exchange markets, although any intervention in foreign exchange markets is coordinated with the U.S. Treasury, which has responsibility for formulating U.S. policies regarding the exchange value of the dollar.

The FOMC by law are required to meet a minimum of 4 times yearly, but in actually they meet between 5-8 times per year.

“Attendance at meetings is restricted because of the confidential nature of the information discussed and is limited to Committee members, nonmember Reserve Bank presidents, staff officers, the Manager of the System Open Market Account, and a small number of Board and Reserve Bank staff”

At the conclusion of each meeting, a consensus is reached by the board members and a directive is issued to the Federal Reserve Bank of New York. This directive serves as guidance to the Manager in terms of the every day-to-day open market operations. The directive states the FOMC’s objectives for long-run growth of certain key monetary and credit aggregates. It also sets forth operating guidelines for the degree of ease or restraint to be sought in reserve conditions and expectations with regard to short-term rates of growth in the monetary aggregates, along with their views on the economy in general.

On January 25, 2012 the FOMC meet and released their statement.

On the whole, they believed the economy was on an upswing, although they were still worried about the employment and housing situation. These were to be expected.

The surprise was their directives on interest rates. The Fed stated that they would hold interest rates at the current level until late 2014. Previously the Fed Reserve had stated they would hold the current rates through 2013.

This simple statement causes shockwaves in the global markets within minutes.

The USD dropped, gold soared rising over 35.00 per ounce and the euro surged. Currencies around the world skyrocketed against the dollar, while the US markets improved. If ever the Fed Reserve Committee wanted to shake the global markets in one short quick statement markets around the globe reacted.

AUD/USD Forecast January 26, 2012, Technical Analysis

AUD/USD continues to rise as the Wednesday session saw the Federal Reserve promise ultra-low rates until at least the end of 2014. The higher yielding and commodity sensitive Aussie was a perfect choice for longs as the market will almost always run to it when the “risk on” trade starts back up.

The gold markets rose, and the triangle that we have been talking about is very much in effect at the moment. The projected target of 1.12 based upon the triangle’s measurement doesn’t seem like such a stretch now that the Fed has promised a weak currency out of America. We are buying this pair only, and like using dips as entry points.

AUD/USD Forecast January 26, 2012, Technical Analysis
AUD/USD Forecast January 26, 2012, Technical Analysis

AUD/USD Fundamental Analysis Jan. 27, 2012 Forecast

Economic Events: (GMT)

Close of Asian Markets

There are no economic events  or reports due in Australia today.

08:30     USD     GDP Price Index (QoQ)     2.0%     2.6%

08:30     USD     GDP (QoQ)     3.0%     1.8%

The GDP Price Index measures the annualized change in the price of all goods and services included in gross domestic product.It is the broadest inflationary indicator.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

 09:55    USD     Michigan Consumer Sentiment Index     74.2     74.0

The University of Michigan Consumer Sentiment Index rates the relative level of current and future economic conditions. There are two versions of this data released two weeks apart, preliminary and revised. The preliminary data tends to have a greater impact. The reading is compiled from a survey of around 500 consumers.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

Analysis and Recommendation:

AUD/USD was trading at 1.0605

The dollar weakened on FOMC statements against all its trading partners. In early Asian markets the USD continued to show weakness until the end of the session when the dollar improved slightly.

The AUD opened at 1.0597 moving up to 1.0615 before settling in near 1.06 for the day.

The USD was up in the US session until the Fed comments, driving the USD straight down. The Fed said it would hold interest rates until sometime in 2014. Stock markets soared and the currency fell. The yen was also weaked by reports showing an annual trade deficit in 2011, for the first time since 1980. This is the  point at which Japan’s savings turn around in terms of momentum has long been seen as the time to sell the Japanese yen.

Weak demand for Japanese goods and services abroad coupled with a stronger yen were among the problems causing the trade gap. You also have to keep in mind the Tsunami and Earthquake that devistated a lot of Japans manufacturing area and lost exports.

The World Economic Forum continues its meeting in Davos, Switzerland, and markets will await comments from policymakers or financial and corporate leaders on the U.S. and European economies. Angela Merkel gave the opening keynote address, admitting that the austerity programs and bailouts in Europe had failed, and preparing the markets for a Greek default.

Markets in Hong Kong, Taipei and Shanghai, among others, remained closed for the Lunar New Year holidays.

Upcoming Govt Bond Sales Dates

Jan 27  10:10  Italy   BOT auction

AUD/USD Fundamental Analysis Jan. 26, 2012 Forecast

Economic Events: (GMT)

Close of Asian Markets

13:30     USD     Core Durable Goods Orders (MoM)     0.9%     0.3%

13:30     USD     Durable Goods Orders (MoM)     2.0%     3.7%

Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, excluding transportation items. Because aircraft orders are very volatile, the core number gives a better gauge of ordering trends. A higher reading indicates increased manufacturing activity.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

 13:30    USD     Initial Jobless Claims     370K     352K

 13:30    USD     Continuing Jobless Claimsv     3432K

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance.

A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.

15:00    USD     New Home Sales     320K     315K

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

Analysis and Recommendation:

AUD/USD was trading at 1.0526 up from the opening at 1.0494. The Australian CPI came in unexpected flat, adding to the hopes of a rate cut at the RBA meeting. The thought of a rate cut gave the Aussie some added leverage, pushing it up in today’s session.  CPI was unexpectedly flat in the fourth quarter, confounding expectations for a 0.2% rise, after a 0.6% rise the previous quarter. The report also showed CPI rose more-than-expected in the fourth quarter, up 0.6% after a 0.4% rise the previous quarter.

The duo was likely to find support at 1.0427.

The pair will respond to the FOMC statements due out Wednesday afternoon in the USA.

Upcoming Govt Bond Sales Dates

Jan 26  10:10  Italy   Auctions CTZ/BTPei

Jan 26  18:00  US  Auctions 7Y Notes

Jan 27  10:10  Italy   BOT auction

AUD/USD Forecast January 25, 2012, Technical Analysis

AUD/USD fell for the Tuesday session, but managed to bounce from the 1.04 level, confirming former resistance as support. This level was the top of a triangle we have been watching lately, and the retesting of it as support is normal. In fact, this is a very positive turn of events for the Aussie.

The triangle measures all the way to the 1.12 level, and because of this, we are willing to buy on dips as long as we are above 1.04. The pair yields positive swap, and this pair will make an attractive investment for investors that are searching for yield in a low-yield environment for trustworthy bonds. We are buying dips on the shorter time frames, and a break of the top of Tuesday’s candle.

AUD/USD Forecast January 25, 2012, Technical Analysis
AUD/USD Forecast January 25, 2012, Technical Analysis

AUD/USD Fundamental Analysis Jan. 25 , 2012 Forecast

Economic Events: (GMT)

Close of Asian Markets

00:30     AUD      CPI (QoQ)                          0.2%                      0.6%

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

 00:30    AUD      Trimmed Mean CPI (QoQ)           0.6%                      0.3%

The Trimmed Mean Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers, excluding the most volatile 30% of items. This data helps illustrate underlying inflation trends.

A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

05:00    JPY        BoJ Monthly Report

The Bank of Japan’s (BoJ) monthly report contains the statistical data that policymakers evaluate when setting interest rates. The report also provides detailed analysis of current and future economic conditions from the bank’s perspective.

20:00     NZD       Interest Rate Decision                  2.50%                   2.50%

 20:00    NZD       RBNZ Rate Statement

The Reserve Bank of New Zealand (RBNZ) governor decides where to set the rate after consulting senior bank staff and external advisers. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

The Reserve Bank of New Zealand’s rate statement is the primary tool the panel uses to communicate with investors about monetary policy. It contains the outcome of the vote on interest rates, discusses the economic outlook and offers clues on the outcome of future votes.

A higher than expected rate is positive/bullish for the NZD, while a lower than expected rate is negative/bearish for the NZD.

23:00     KRW      South Korean GDP (QoQ)              0.4%                     0.8%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

A higher than expected reading should be taken as positive/bullish for the KRW, while a lower than expected reading should be taken as negative/bearish for the KRW.

Analysis and Recommendation:

AUD/USD was trading at 1.0502. Today several factors came into play. The CP Leading Index came in under forecast, weakening the Aussie and the USD picked up some strenght on continued profit taking on the sale of the euro.

The Greek Crisis which is the center of everyones thoughts is still not resolved and is driving gold to record levels, closing last night at 1677.00 up 12.80. which nudges the AUD.

The pair begin the day by falling and then rebounded dropping as low as 1.0484.

Trading is also low thoughout Asia as it is still the Lunar New Year.

The pair will be reactionary responding to news throughout the day. There are several economic reports due in Aussie Land. If these come in under forecast also we can expect a farther drop in the AU dollar.

Upcoming Govt Bond Sales Dates

Jan 25  10:10  Sweden  Nominal bond auction

Jan 25  10:30  Germany  Eur 3.0bn 3.25% Jul 2042 Bund

Jan 25  16:30  Italy   Details BTP/CCTeu on Jan 30

Jan 25  18:00  US  Auctions 5Y Notes

Jan 26  10:10  Italy   Auctions CTZ/BTPei

Jan 26  18:00  US  Auctions 7Y Notes

Jan 27  10:10  Italy   BOT auction

AUD/USD Forecast January 24, 2012, Technical Analysis

AUD/USD rose quite nicely on Monday as traders not only went for commodity currencies, but risk overall. The gold markets did well, and this is normally good for the Aussie. The pair has broken above the all-important 1.04 to 1.05 area, and we think that the next leg of a bullish move could be starting at this point. Because of this, we like buying the Aussie on dips as long as we can stay above 1.04 in this pair. Selling isn’t an option until we close sub-1.04 as we see this as the most important area currently.

AUD/USD Forecast January 24, 2012, Technical Analysis
AUD/USD Forecast January 24, 2012, Technical Analysis

AUD/USD Forecast Jan. 24, 2012, Fundamental Analysis

AUD/USD Forecast Jan. 24, 2012, Fundamental Analysis
AUD/USD Forecast Jan. 24, 2012, Fundamental Analysis
The AUD/USD pair advanced with the beginning of the week, where the U.S. dollar s still losing the advantage against aussie on eased fears over the outlook, nevertheless, the volatility is ongoing as investors are waiting for the developments from Europe and the Greek talks with lenders which any setback will trigger a strong risk aversion wave that will pressure aussie south.

Eyes turn now to Consumer price inflation after the market discarded the reported decline in producer prices today. The Australian CPI is expected to ease during the fourth quarter, which will reduce inflation pressure on the RBA and open the way for more interest rate stability during the upcoming period.

On the other hand, the Australian dollar was able to keep its gains against the dollar due to the current risk appetite in the financial market, while the interest rate expectations for the RBA could ease the sharp incline for the Aussie if the decline inflation and more weakness in the economy materialize.

On Tuesday at 23:00 GMT (Monday), Australia will release the Conference Board Leading Index for November, where the prior reading was 0.6%.

At 15:00 GMT, the U.S. economy will issue the Richmond Fed Manufacturing Index for January, where it’s expected at 5.0 from the previous reading of 3.0.

Greece Conflict Effects Asia

Asian markets moved very little during Monday’s trading session.  Australian share markets lost 0.1% to 4233.50 after gaining all year, Australia is actually up over 4% for the New Year, making quiet gains. Most of the markets just seemed to drift today. Many are closed for the Lunar New Year including Shanghai, Hong Kong and Seoul.

The Nikkei rose 0.2% in a quiet trading session. Asian markets got what little life they exhibited today from the bounce in US markets on Friday.

With little in the way of economic news and data out today and the lower volume due to the holiday, the markets were lax.

All eyes and ears were waiting for news on the Greece situation. As of this morning, there has been no verifiable agreement reached between the Greek government and the IIF, representing the banks and major creditors. The original deadline to reach an agreement to avoid default was this past Friday, when no deal was reached both parties stated that they were going to continue talks over the weekend via phone. At this moment, there have been lost of conflicting reports and rumors, but no hard news on a final deal.

This morning’s deadline was set to present the final deal to the EU and ECB at their meeting today.

Reuters reported last evening “Greece and private creditors neared a debt swap deal which would prevent Athens from bankruptcy and have investors lose up to 70 percent of the loans they have given to the country. But many details were still unresolved and the plan must be approved by the International Monetary Fund and others.

Euro zone finance ministers will decide on Monday what terms of a Greek debt restructuring they are ready to accept as part of a second bailout package for Athens.”

In Monday’s Asian session, most of the currencies including the yen, aussie and the kiwi remained in tight ranges, just sitting and waiting.

Last week we saw the euro pick up some strength and rise almost back to the all important 1.30 level, making it as high as 1.2986 before losing the battle. On Friday as investors grew weary and amongst some profits taking the euro declined and the USD picked up steam. Many investors ran for the safety of gold pushing gold up by 10.00 on the close of the week end at 1664.50.

Today we might expect statements from the EU, the ECB and the IMF but it does not look like a deal will be struck without some incentives added, perhaps a Greek default is possible.

AUD/USD Fundamental Analysis Jan. 24, 2012 Forecast

Economic Events: (GMT)

Close of Asian Markets

23:30 AUD MI Leading Index (MoM)

The Westpac/Melbourne Institute (MI) Leading Index is a composite index based on nine economic indicators, which is designed to predict the direction of the economy.The data is compiled from economic indicators related to consumer confidence, housing, stock market prices, money supply, and interest rate spreads. The report tends to have a muted impact because most of the indicators used in the calculation are released previously.

A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

 Analysis and Recommendation:

AUD/USD was trading at 1.0486 the exact middle point between the open and high.

The Australian Dollar was lower against the U.S. Dollar on today, following the rise of the US dollar on Friday. There is little in the way of economic data due in the early part of the week to effect the AUD. While Gold is trading up 2% last week off a 10.00 rise on Friday. The pair is expected to stay in this range, waiting for an outcome on Greece and statements today from the EU and ECB after meetings this afternoon.

Upcoming Govt Bond Sales Dates

Jan 23  12:00  Norway  Details bond auction on Jan 30

Jan 24  09:30  Netherlands Eur 1.5-2.5bn Jan 2013 & Jan 2042 DSL

Jan 24  09:30  Spain  Auctions 3 & 6M T-bills

Jan 24  16:30  Italy   Details CTZ/BTPei on Jan 26 & BOT on Jan 27 &

Jan 24  18:00  US  Auctions 2Y Notes

Jan 25  10:10  Sweden  Nominal bond auction

Jan 25  10:30  Germany  Eur 3.0bn 3.25% Jul 2042 Bund

Jan 25  16:30  Italy   Details BTP/CCTeu on Jan 30

Jan 25  18:00  US  Auctions 5Y Notes

Jan 26  10:10  Italy   Auctions CTZ/BTPei

Jan 26  18:00  US  Auctions 7Y Notes

Jan 27  10:10  Italy   BOT auction

AUD/USD Forecast January 23, 2012, Technical Analysis

The AUD/USD pair rose on Friday and even broke above the 1.04 level that we have been watching for a couple of weeks. The reason this area is so interesting is that the level is the top of a massive triangle that formed over the last month and a half in this market. The breakout is significant as it shows a real break of resistance in this market.

The triangle from the top to the bottom measures 800 pips, and as a result the projected move up now that we have broken out of this triangle would match that. The breakout point being 1.04 has this pair running towards the 1.12 level, which would be a new high in this pair.

The area saw a lot of consolidation over the last couple of sessions, and this shows a real building of pressure in the markets over the last week. The 1.07 level would be considered to be pressure to the downside, and the resistance could cause a bit of a pullback. Knowing this ahead of time however allows us to be prepared to deal with it going forward.

The breaking of the Friday range would be the “all clear” signal to buy, and we would expect the 1.04 area to act as support at that point in time. In fact, if we close on the daily chart below it – we would be concerned. But as long as we are above it, there is no reason to sell currently.

The Aussies will get a boost by the potential easing of credit and liquidity in China as they are the favorite “general store” of the Chinese. The boom that could be coming in commodities could certainly continue to push the value of the Aussie dollar higher for much longer than many people expect. Gold looks like it is ready to break out as well, and this will often be followed by the AUD/USD pair too. We are buying a break of the Friday highs, and won’t sell until we close well below the 1.04 level.

AUD/USD Forecast January 23, 2012, Technical Analysis
AUD/USD Forecast January 23, 2012, Technical Analysis

AUD/USD Forecast for the Week of January 23, 2012, Technical Analysis

AUD/USD rose during the previous week, and managed to break above the 1.04 level. The pair looks very strong at this point as the market closed the week at the very top of the range. The fact that the market closed well above the 1.04 level shows that the strength is without a doubt to the upside in this pair.

The breaking of the top of the week’s range would be a massive bullish signal in this market. We are willing to buy if that happens going forward. Also, daily candles that show support on pullbacks can also be bought as long as we are north of 1.04 going forward. A close on the weekly below that level would be bearish to say the least.

AUD/USD Forecast for the Week of January 23, 2012, Technical Analysis
AUD/USD Forecast for the Week of January 23, 2012, Technical Analysis

AUD/USD Weekly Fundamental Analysis Jan. 23-27, 2012, Forecast

Economic Events: (GMT)

Please review the daily forecast for explainations and expected results

Jan. 23

00:30 AUD PPI (QoQ)

Jan. 24

15:00 USD CB Consumer Confidence

Jan. 25

00:30 AUD CPI (QoQ)

00:30 AUD Trimmed Mean CPI (QoQ)

15:00  USD Pending Home Sales (MoM)

19:15 USD Interest Rate Decision

19:15 USD FOMC Statement

Jan. 26

13:30  USD Core Durable Goods Orders (MoM)

13:30 USD  Durable Goods Orders (MoM)

13:30 USD Initial Jobless Claims

13:30  USD Continuing Jobless Claims

15:00 USD New Home Sales

Jan. 27

13:30 USD GDP Price Index (QoQ)

13:30 USD GDP (QoQ)

14:55 USD Michigan Consumer Sentiment Index

Rule:

The Australian dollar still isn’t in its good old days, but the performance is definitely improving. Resistance lines tend to work in a smoother manner than support lines, but they also work well. The pair move well together, not much volatility, but easy to chart and easy to trade with low risk factors

Weekly Analysis and Recommendation:

The AUD/USD ended the week at 1.0486.

The aussie is pushing as hard as it can but just doesn’t seem to be getting anywhere. This week, the import price index advanced 2.5% (QoQ) in three months to December, while the export price index fell 1.5% (QoQ).Meanwhile in China, the HSBC Manufacturing Purchasing Managers Index rose marginally to 48.8 in January, compared to 48.7 in December. The December jobs report which  missed estimates surprising the  markets and the reaction was to sell AUD/USD but the Aussie dollar recovered quickly.  Closer analysis revealed most losses in the part-time jobs sector and strong growth in full-time jobs which is the preferred scenario.

The demand for home loans in Australia increased for the fifth straight month in November while building approvals are still relatively sluggish. Consumer sentiment is still down. The Reserve Bank of Australia is expected to offer more rate cuts over the next 12 months are still priced in and the expectation for February is high.

This upcoming week will be all about the euro and the greenback.. On the topside 1.0480 is still the level, so it seems that the pair will be trading in a tight range or dropping slowly as the USD gains strenght this week. There is little in the way of economic data due that would effects the Australian currency.

The USD was up and down all week, with positive jobs reports and negative housing data, but moved up against all currencies when the euro reached an unexpected high and traders began selling it off to take profits, pushing the dollar up on Friday.

The entire week seemed to be focused on Greece and the negotiations with the IIF representatives as deadlines approached. The were rumors flying in every direction, moving the markets but at the close of day Friday no deal had been reached and the IIF representatives packed up and went home stating the negotiations would continue over the week by phone.

Baring an unusual events or news to weaken the dollar, it is highly likely the pair will fall.

Upcoming Govt Bond Sales Dates

Jan 23  10:10  Norway  Nok 6.0bn 4.25% May 2017 bond

Jan 23  10:10  Slovakia  Auctions Apr 2014 bond

Jan 23  10:30  Germany  Eur 3.0bn Jan 2013 Bubill

Jan 23  12:00  Norway  Details bond auction on Jan 30

Jan 24  09:30  Netherlands Eur 1.5-2.5bn Jan 2013 & Jan 2042 DSL

Jan 24  09:30  Spain  Auctions 3 & 6M T-bills

Jan 24  16:30  Italy   Details CTZ/BTPei on Jan 26 & BOT on Jan 27 &

Jan 24  18:00  US  Auctions 2Y Notes

Jan 25  10:10  Sweden  Nominal bond auction

Jan 25  10:30  Germany  Eur 3.0bn 3.25% Jul 2042 Bund

Jan 25  16:30  Italy   Details BTP/CCTeu on Jan 30

Jan 25  18:00  US  Auctions 5Y Notes

Jan 26  10:10  Italy   Auctions CTZ/BTPei

Jan 26  18:00  US  Auctions 7Y Notes

AUD/USD Forecast Jan. 23, 2012, Fundamental Analysis

AUD/USD Forecast Jan. 23, 2012, Fundamental Analysis
AUD/USD Forecast Jan. 23, 2012, Fundamental Analysis
The AUD/USD pair continued its upside movement for the second week, where the Aussie was able to record more gains against greenback as the risk appetite returns to the financial market.

Safe haven currencies such as greenback lost momentum against other major currencies, as signs of recovery in the U.S. economy and eased EU debt crisis woes opened the way for the risk appetite to return to the markets.

Expectations refer to further increase for the AUD/USD pair over the short-term, while any surprise from the RBA or deceleration in the optimism over Europe or the progress will be enough to change the pair’s movements over the short-term and end the risk rally.

On Monday at 00:30 GMT the Australian economy will released the Producer Price Index for the fourth quarter, where it’s expected at 0.4% from the previous reading of 0.6%, while the annual reading is expected to come at 3.0% from the previous of 2.7%.

AUD/USD Weekly Forecast Jan. 23-27, 2012, Fundamental Analysis

AUD/USD Weekly Forecast Jan. 23-27, 2012, Fundamental Analysis
AUD/USD Weekly Forecast Jan. 23-27, 2012, Fundamental Analysis
The AUD/USD pair ended last week at its highest level in two months, after the U.S. dollar lost ground against other majors on the return of the risk appetite to the financial market.

The Australian dollar was one of the best performers against the dollar during the last period, even with the release of some disappointing data from Australian and especially the labor data last week.

However the latest data from the U.S. economy were able to restore confidence among investors, which increased demand for higher yielding assets such as the Aussie.

The Federal Reserve Bank will announce its FOMC decision, with expectations of further stability in the bank’s monetary policy especially after the unexpected performance of the manufacturing sector in addition to the stable inflation pressures.

While the Reserve Bank of Australia will face more pressure due to the current slowdown in some sectors, in addition to the negative impact from the EU debt crisis.

Expectations refer to further increase for the AUD/USD pair over the short-term, while any surprise from the RBA or deceleration in the optimism over Europe or the progress will be enough to change the pair’s movements over the short-term and end the risk rally.

Major highlights for this week that will affect the AUD/USD pair’s trading:

Monday January 23:

On Monday at 00:30 GMT the Australian economy will released the Producer Price Index for the fourth quarter, where it’s expected at 0.4% from the previous reading of 0.6%, while the annual reading is expected to come at 3.0% from the previous of 2.7%.

Tuesday January 24:

On Tuesday at 23:00 GMT (Monday), Australia will release the Conference Board Leading Index for November, where the prior reading was 0.6%.

At 15:00 GMT, the U.S. economy will issue the Richmond Fed Manufacturing Index for January, where it’s expected at 5.0 from the previous reading of 3.0.

Wednesday January 25:

On Wednesday at 23:30 GMT (Tuesday), the Australian economy will release the Westpac Leading Index for November with a previous reading of 0.1%.

At 00:30 GMT the Consumer Prices Index for the fourth quarter will be released, where the previous reading was 0.6% and expected to slow to 0.2%. The annual reading is expected to also slow to 3.3% from the prior 3.5%.

The U.S. economy will report the House Price Index for November which had a previous reading of –0.2%. On the other hand, the Pending Home Sales for December is expected with 1.0% rise slowing from the previous month’s surge of 7.3%.

At 17:30 GMT, the Federal Reserve Bank will announce its Open Market Committee monetary decision, where it’s expected that the central bank will keep its interest rate near zero and the monetary policy unchanged.

Thursday January 26:

On Thursday at 13:30 GMT, the U.S. economy will release the Durable Goods Orders for December, where it’s expected at 2.0% from the prior reading of 3.8%. While the Durables Exclude Transportation had a previous reading of 0.3% expected at 1.0%.

At 13:30 GMT, the U.S. economy will release the weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance dropped to 352 thousand last week.

The U.S. Leading Indicators for December will be released at 15:00 GMT, with a previous reading of 0.5% and expected to come at 0.7%.

On the other hand, the New Home Sales for December is expected to come at 1.6% in line with the prior reading.

Friday January 27:

On Friday, the U.S. economy will release the annualized Gross Domestic Product for the fourth quarter at 13:30 GMT, where the U.S. economy is expected to have expanded at a stronger pace of 3.0% from the previous 1.8%.

The Core Personal Consumption Expenditure for the fourth quarter is expected to come at 0.9% from the previous 2.1%, while the fourth quarter Personal Consumption is expected to come at 2.3% from the previous 1.7%.

The University of Michigan Confidence for January will be released at 14:55 GMT, with a previous reading of 74 and expected to be revised slightly to 73.9.