AUD/USD Weekly Forecast Jan. 16-20, 2012, Fundamental Analysis

AUD/USD Weekly Forecast Jan. 16-20, 2012, Fundamental Analysis
AUD/USD Weekly Forecast Jan. 16-20, 2012, Fundamental Analysis
The AUD/USD pair soared last week near its highest level in two months, where the Aussie used the US dollar confusion to record more gains despite the latest weak data from the Australian economy.

The US dollar lost some ground against the Aussie and other major currencies due to the instability in the economic sectors in the U.S., which helped the higher-yielding currencies to cover some of its previous losses.

On the other hand, the pessimistic data from the Australian economy did not affect the Aussie’s trading, as the Australian currency was oversold against the greenback and needed to correct its movements to the upside. Nevertheless, with renewed fears over the euro outlook and the debt crisis on Friday on downgrade fears the market reversed and risk aversion is likely to be again the dominant pressure on the pair.

The current week hold important data from the Australian economy, where the unemployment rate is expected steady at 5.3% and any change in the employment sector will be faced by a strong reaction from Aussie, as it could affect the next decision from the RBA.

Also the Chinese economy will release the GDP data for the fourth quarter during the week, where the growth data will have its toll on the AUD/USD pair since China is number one trade partner for Australia.

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

Monday January 16:

On Monday at 00:30 GMT, Australian will issue the Home Loans for November, where the previous reading was 0.7% and it’s expected to come at 1.0%.

Tuesday December 17:

The U.S. Empire Manufacturing for January will be released at 13:30 GMT, where the previous reading was 9.53 and expected to come at 10.50.

Wednesday December 18:

On Wednesday at 23:30 GMT (Tuesday), the Australian economy will release the Westpac Leading Index for November, where the prior reading was 0.1%.

At 13:30 GMT, the U.S. economy will release the Producer Price Index for December, where the prior reading was 0.3% and expected to come at 0.1%, on the other hand the annual Producer Price Index had a prior reading of 5.7% and it’s expected to come at 5.1%.

The Total Net TIC Flows for November will be released at 14:00 GMT, with a previous reading of -$48.8 billion, while the Net Long-term TIC Flows had a previous reading of $4.8 billion.

The U.S. Industrial Production for December will be released at 14:15 GMT, and expected at 0.5% after 0.2% drop. The Capacity Utilization for December had a prior reading of 77.8% with expectations to rise to 78.1%.

Thursday December 19:

On Thursday at 00:30 GMT, Australia will release the Employment Change for December where the prior reading was –6.3 thousand and it’s expected to come at 10.0 thousand.

On the other hand, the Unemployment Rate for December is expected to hold at 5.3%.

On Thursday at 13:30 GMT, the U.S. economy will release the Consumer Price Index for December, where the prior reading was 0.0% and it’s expected to come at 0.1%. The annual CPI had a prior reading of 3.4% and expected to come at 3.1%.

The Housing Starts for December will be released also at 13:30 GMT, where the previous reading was up by 9.3% at 685 thousand, and expected to remain unchanged at 685 thousand. The U.S. Building Permits are expected with 0.7% drop to 675 thousand from the prior reading of 681 thousand.

The weekly initial claims are also due at the same time, where the number of people filing for first-time claims for the state unemployment insurance increased to 399 thousand last week.

Friday December 20:

On Friday at 00:30 GMT, the Australian will release the Import Price Index for the fourth quarter, where its expected to come at 0.6% higher than the prior flat reading. The Export Price Index is expected to come at –2.0% after 4.0% rise.

The U.S. economy will issue the Existing Home Sales for December, where the previous was at 4.42 million and expected to rise 3.7% to 4.65 million.

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